DEI AND RACIAL JUSTICE IN INVESTMENTS

WHEREAS, diversity, equity and inclusion (DEI) are core values of the American Federation of Teachers, and the AFT is committed to leading the fight for racial justice; and 

WHEREAS, DEI refers to policies and programs that promote the representation and participation of historically underrepresented groups, including but not limited to people of color, women, LGBTQIA+ individuals, veterans and disabled individuals; and 

WHEREAS, diversity of identity and thought enrich our schools, workplaces and communities; and diverse identities, experiences, skills and abilities bring value and benefit to society as a whole; and 

WHEREAS, of the $69.1 trillion global financial assets under management across mutual funds, hedge funds, real estate and private equity, fewer than 1.3 percent[1] are managed by women and people of color; and

WHEREAS, as of 2021, only 17.5 percent of directors[2] among Fortune 500 companies were people of color, and only 26.5 percent were women; and 

WHEREAS, diversity, equity and inclusion are integral to achieving good governance of pension fund boards; and

WHEREAS, empirical evidence demonstrates that diversity, equity and inclusion yield better overall business performance, including stronger investment returns, increased investment in research and development, as well as talent recruitment and retention; and

WHEREAS, the governance and performance benefits of diversity to corporate boards also apply to pension fund boards, many of which do not accurately reflect the diversity of AFT’s membership; and

WHEREAS, corporate America and the finance sector have contributed to systemic racism; driving racial wealth inequality; targeting minority communities with unhealthy and predatory products and services; and failing to hire, promote and fairly compensate people of color; and 

WHEREAS, AFT members’ pension funds are invested in corporations and asset managers that perpetuate and profit from systemic racism; and 

WHEREAS, pension fund trustees have a fiduciary duty to assess and address investment risks across all asset classes, including risks posed by lack of diversity and racial inequity:

RESOLVED, that the American Federation of Teachers will work with public pension funds, state treasurers, policymakers and advocacy organizations to promote diversity, equity and inclusion among asset managers, corporate leadership and boards of directors through engagement and shareholder activism; and

RESOLVED, that the AFT will work with affiliates to identify, recruit, train and support diverse candidates for pension boards; and

RESOLVED, that the AFT pension Trustee Council will work within its role as fiduciaries and investors to determine the risk posed to our pension funds by lack of diversity and systemic racism, and to raise concerns as investors and shareholders when appropriate; and

RESOLVED, that the AFT will support efforts to hold asset managers and corporations accountable for achieving diversity, equity and inclusion goals, including fostering a pipeline for diverse hiring and leadership, and training programs to expand opportunities for diverse employees; and

RESOLVED, that the AFT pension Trustee Council will support AFT affiliates and trustees in urging pension fund staff to develop and adopt investment policies that integrate consideration of diversity factors, including, but not limited to, the selection, evaluation and monitoring of investment managers, consultants, contractors and service providers, and to integrate racial justice into investment decision-making, consistent with fiduciary duty.