Trends of the market: diversity and climate change.
As the world evolves , financial institutions have to evelve as well. Most importantly they have to reconsider their strategies towards benefiting society in order for profit to come along. Some important issues that they have to consider are inclusion and climate change.
First of all, the Canadian Government has adopted the Canada Business Corporations Act (CBCA) diversity requirements for FRFIs and this year has started consultation on potential financial sector corporate governance reforms, including measures to improve diversity at federally regulated financial firms. Although certain corporations currently have to adhere to requirements set by the Canadian Securities Administrators (CSA) in accordance with provincial securities law, there are no particular diversity disclosure requirements in federal financial sector laws. Others must adhere to guidelines that were just added to the Canada Business Corporations.
The results about diversity in the financial workplace, especially in directory posititons prove that there is space for imporvement. Some financial sectors are more progressive than others. Regarding gender diversity, the boards of directors of Canada’s six largest banks constitute, on average, 43% women (2022), ahead of the goal set. At the same time in the Private Equity sector only 9% of the partners were women, and on the Venture Capital sector only 19.4% were women. Regarding ethnic and minority diversity there has been a 67% increase in the Private Equity sector from 6 to 10%. Bank of Canada has established a two year plan for enhancing Equity, Diversity and Inclusion, as it is clear that the financial services sector has a long way to go to step up diversity, equity, and inclusion.