Financial firms looking to help manage the city’s $8.5 billion portfolio are now required to demonstrate commitment to diversity hiring and social responsibility under a newly launched scorecard system.
That scorecard resulted in 40 percent of the asset management firms that contracted with the City Treasurer’s office last year being dropped.
The mandate comes as a new report by the Knight Foundation calls for greater diversity in the $69 trillion U.S. asset management industry.
The study released last week found women-and minority-owned firms manage just 1.3 percent of the nation’s asset portfolios — representing just 8.6 percent of contracted firms — despite performance that statistically matches the industry as a whole.
“It’s important when we’re talking about investing taxpayers’ money, that these firms are being held accountable,” said City Treasurer Melissa Conyears-Ervin, who on Tuesday will announce the 33 firms on the city’s 2020 Broker Dealer List, unveiling the new scorecard.
There were 54 firms on the 2019 list, 37 percent of them MWVD firms — owned by minorities, women, veterans and the disabled. This year, 42 percent are MWVD firms.
“At the end of the day, it’s important to taxpayers that firms we do business with care about diversity and inclusion, as well as corporate social responsibility,” Conyears-Ervin said.
“We need to make certain that we are doing business with organizations that reflect all of Chicago. That’s…
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