Tuesday, January 31, 2023

Corbin’s Courtney Birnbaum on sustainability: 5 takeaways

Courtney Birnbaum, director of sustainability at women-led investment firm Corbin Capital Partners, discussed their approach to diversity and ESG on episode seven on the AFI podcast. Find five key takeaways from the interview below.

This image has an empty alt attribute; its file name is spotify-podcast-badge-blk-grn-165x40-1.png

1. It is about engagement — not “pushing”

“Whether it’s diversity or our ESG integration programme, we never want to feel like we’re pushing anyone,” said Birnbaum. “Our efforts are focused on engagement, serving as a resource and encouraging progress, rather than pushing or demanding specific actions.”

As a women-led investment firm, where almost half of the partners are either women or come from backgrounds that are under-represented in asset management, Corbin has a unique position from which to help.

2. Managers have reacted positively to the process

Birnbaum says the managers Corbin invests with are “by and large energised by diversity” and welcome the help to improve their processes and retention.

“Managers are pleasantly surprised that we are not looking to score them, but engage and measure momentum of change over time.”

3. Retention is as important as recruitment

“Without thinking about retention, a lot of this won’t make a difference.”

Last year Corbin shared a DE&I resource guide with their underlying managers with thoughts on how to improve processes. Birnbaum said there has been improvement when it comes to recruitment, but holding onto staff from diverse backgrounds is just as important. Inclusion is critical.

“Groups are starting to measure themselves on this and hold themselves more accountable,” she added.

She has noticed firms take a more “creative” approach over the course of her career in terms of widening access to the industry and hiring from under-represented groups.

4. ESG framework offers route through “Wild West”

“ESG has become the wild west of product proliferation,” says Birnbaum, with approaches ranging from the superficial to truly robust.

In a similar way to its efforts on diversity, Corbin has an ESG framework it uses to help managers with their process and manage momentum of change from their baseline.

5. ESG is good investment, not politics

ESG investing has become an unlikely political football in the US this year. Birnbaum said it was important that ESG terminology, which can be confusing, and its actual function was explained properly.

“ESG is really about incorporating these material environmental, social and governance factors into your investing process, as opposed to just throwing out the word. It is not about politics or imposing our ethical considerations.

“Terms such as ESG and impact investing are often used interchangeably, but they’re not interchangeable,” she added. Whereas ESG is part of the traditional investing process — the hunt for risk-adjusted returns — impact investing “goes a step further,” she said, and seeks better environmental or social outcomes.