Forbes: The Role Of Systemic Stewardship In Addressing Income Inequality

Income inequality needs to be dealt with in a similar manner as climate change because they are both systemic problems. Income inequality affects companies in every industry and all asset classes, harming long-term valuation creation and hindering investors’ returns. Like climate change, this problem transcends portfolios, and creates a ripe opportunity for investors, and the broader financial community, to engage at a systemic level to solve…

As the Predistribution Initiative argued in the report ESG 2.0, allocations “…to higher risk asset classes has also meant increased global debt burdens, corporate and fund manager consolidation, and risk across capital structures, resulting in fragility for companies, the real economy, and the stability of financial markets.” It’s the investor’s job to leverage the functional capabilities of each asset class and consider its shortfalls to best address the issue of income inequality.