Last month, you heard from Mellody Hobson about the launch of Ariel Alternatives and Project Black, our most recent move toward fulfilling our commitment to battling economic inequality in the U.S. Our core values, rooted in closing the racial wealth gap, have not changed in our firm’s 38-year history.

Today, Ariel Investments is pleased to share a new piece of thought leadership from my team: the environmental, social and governance (ESG) practice. The article, which I co-authored with my colleague, ESG Research Analyst Leah Yablonka, was just published this morning by The University of Chicago’s Chicago Booth Review: Racial Inequality is a Business Risk. The full white paper which inspired this article can also be found on our website.

This essay outlines:

• Why long-term investors and corporate leaders should view addressing economic inequality and improving diversity as critical forms of risk management.
  
• How being a successful long-term investor requires a comprehensive view of the risks that threaten a company’s growth and viability, both at the macro and the micro levels.

At Ariel Investments, we believe there is overwhelming evidence that economic inequality—particularly the wealth gap between Black and white Americans—poses a major threat to U.S. corporations at both levels. This body of work is a product of my team’s career experience across Corporate America, the public sector, and academia. Leah and I are currently sharing our expertise on this topic with students at the University of Chicago Harris School of Public Policy, where we teach an Intro to ESG and Impact Investing course.

Thank you, as always, for reading our letters and staying connected to all things Ariel.

Click here to learn more about Ariel’s ESG Policy, and here to read today’s full white paper.