Case study by Resource Management Service
Resource Management Service, LLC (RMS) is a global forest investment organisation, with US$4.25bn in assets under management and 2.3 million acres of productive forestland under management in the United States and Brazil.1 We believe robust ESG performance strengthens our ability to innovate and to generate risk-adjusted long-term investment performance for investors while also reducing the risk profiles of the forest assets under our stewardship.
Why promote diversity
Sustainable forestry certification has been a consistent means of enabling responsible investment in the sector since the 1990s, and all the leading certification programmes feature a robust treatment of issues critical for environmental sustainability. To varying degrees, they also address elements of social sustainability. Nevertheless, we have recognised the need to strengthen practice in this area to help the forestry profession evolve and ultimately to create value for our investors.
One social area on which we have focused is that of workforce diversity in the forestry sector. In 2019, we completed our first Materiality Assessment, through which investors, employees and key stakeholders indicated the strategic importance of building greater diversity, equity and inclusion within our workforce, among other ESG priorities. Significant research underlines the link between diversity and company performance, demonstrating how workforce diversity drives creativity and innovation by bringing together a greater variety of perspectives and experiences, resulting in improved profitability and sustained long-term value creation.2.3.4
How we open access to higher education
For that reason, we have developed two initiatives that seek to address barriers to workforce diversity in the sector. Through the initiatives, we work with partner universities to recruit and retain more students from communities that are underrepresented in the forestry sector. For example, female, black and Hispanic forestry practitioners are significantly underrepresented in the membership in the Society of American Foresters, the professional organisation for foresters in the United States, making up 10%, 0.42% and 3.9%, respectively, of its members.5 This stems primarily from the historic inability of colleges and universities to recruit minorities and women to undergraduate natural resource degree programmes.6
Our approach has been to target the two most significant influences on the development of careers in forestry for students – exposure to the outdoors and an ability to access the financial resources necessary to pursue higher education. By providing scholarships, other funding and paid internships at RMS, our programmes aim to support universities’ efforts to recruit and retain these students and to create a pipeline of talent from which we and other forest investment organisations can draw in the future to meet our hiring needs.
We have also recognised that the issues that we are attempting to address through this process are long-term in nature, and may have multiple impacts, whether on our own financial and operational performance, on the students themselves or on broader social and cultural norms in relation to the forestry sector. The overall objectives and key performance indicators (KPIs) developed for the programmes are therefore themselves long-term, with progress measured over periods of five years or longer, rather than always on an annual basis.
Example: the RMS Scholarship Program and the RMS Forester of the Future Fund
We have developed two programmes to drive greater diversity in the forestry sector: the RMS Scholarship Program, launched in 2018; and the RMS Forester of the Future Fund, established in 2019. Through both programmes, we provide financial support and internship opportunities to students from under-represented communities to pursue an undergraduate education in a forestry-related field at eight of the leading universities in the United States with natural resource programmes. The universities selected as initial partners have proven track records in producing high-quality applied forestry or forestry-focused business graduates, and they also have a strong desire to improve workforce diversity to better reflect a more diverse society.
The RMS Forester of the Future Fund also features a deeper engagement with one of our partner universities, North Carolina State University (NC State), to drive innovation in recruitment practices. NC State provides natural resource curriculum support to the faculties and students of historically black colleges and universities (HBCUs), which generally lack accredited forestry degree programmes. We support this effort by providing funding for students transferring from HBCUs to NC State to complete their undergraduate or graduate training in forestry and NC State’s other nationally accredited natural resource degree programmes. This is a key step in broadening the talent pool, as graduation from an accredited programme is required for employment by most companies in the sector.
To date, 75% of participants in the RMS Scholarship Program have been women, and 17% are black. Moreover, 33% of participants in the Scholarship Program have subsequently taken full-time employment within the forestry investment industry.
However, establishing these programmes is only the first step in the process. Our hope is that the real impact of our efforts will be to drive cultural change in recruitment and retention of diverse candidates into the forestry profession, and in turn support better financial returns for its investors. The KPIs developed for the programmes reflect those long-term objectives, and also highlight the need for continuing collaboration and close partnerships with universities and other players in the forestry sector.
Specific metrics that we are monitoring include:
- the percentage of graduates from the schools that come from underrepresented groups, evaluated over five-year intervals;
- the percentage of RMS Forestry Scholarship recipients and Forester of the Future Fund participants who complete an internship with RMS, and, ultimately, accept a full-time position with the firm;
- the percentage of recipients and participants who accept employment with another forestry or forest investment firm;
- the number of previous recipients or participants remaining engaged with their undergraduate forestry and natural resource programmes to mentor future students, sharing their experiences and guidance.
The most challenging KPI to develop is one that quantifies the specific contribution of increased diversity within RMS and the forest investment sector to long-term, improved outcomes for investors. There are potential measures that may offer some understanding of correlation, but not causation. One such measure might be comparing return performance relative to industry investment performance indexes as a firm’s level of diversity increases. This is an area for continued research and development for us.
1 Assets and forestland under management as of 31 December, 2019.
2 Hansen et al (2016). “Does gender diversity in forest sector companies matter?” Canadian Journal of Forest Research, 46: 1255-1263.
3 Gompers, Paul and Kovvali, Silpa. “The Other Diversity Dividend”. Harvard Business Review, July-August 2018.
4 Catalyst, “Why Diversity and Inclusion Matter: Quick Take”, webpage dated 1 August 2018, accessed 3 June 2020.
5 Onokpise et al, (2002). Recruiting, Retaining, and Educating Minorities in Natural Resources and Forestry: Florida A&M University-University of Florida 2+2 Joint Degree Program in Natural Resources. Proceedings of the Symposium on the Tenth Anniversary of the 2+2 Joint Degree Program in Forestry and Natural Resource Conservation, Tallahassee Florida, September 2002.
6 For instance, students self-identifying as non-white comprise only 12% and women only 18% of enrolments in forestry-related undergraduate programmes.