Many large businesses are undertaking initiatives that have a huge positive impact on refugees, setting them apart as more likely to have stronger financial performance, according to Sindhu Janakiram (pictured), co-founder and CEO at Refugee Integration Insights (RII).
However, he added, there is a problem: “Nobody is talking about it.”
“There are hundreds of thousands of companies with refugee initiatives. Nobody’s collecting data and nobody’s structuring that data into information that can be useful for our mission… to channel capital and resources towards refugees,” he said.
Janakiram has set out to address this and allow the private market to move capital to initiatives that benefit refugees.
In its research, RII has found many large multinationals in particular “have these incredible refugee policies that nobody’s talking about,” Janakiram explained.
RII has gathered data on 1,851 companies from a parent universe of the S&P 500, the Stoxx 600 and the ISS ESG Screened Developed Markets Index and compiled an index of the top 50 on refugee integration.
Performance and impact
The index outperforms the S&P 500 and the Stoxx 600 and has what Janakiram describes as “tremendous” impact performance.
“Just our top 50 companies have hired 11,000 refugees have supported 2000 refugee entrepreneurs and have educated or trained 100,000 refugees to the tune of almost $200m of funding for these initiatives,” he said.
The co-CEO has huge enthusiasm for the positive impact behind these figures and how investors could be using data on corporate’s refugee integration. However, he is careful not to mix causation and correlation – he has observed those businesses undertaking such initiatives simply tend to perform better. Looking at the private sector more broadly, he said he sees refugee integration adding value in three main ways:
- helping a company’s diversity and inclusion performance
- helping companies with their talent retainment
- helping them with their reputation
Integration score
RII looked at how companies were supporting the economic integration of refugees and were able to group the activities in to different areas. They found businesses were hiring refugees, supporting refugee entrepreneurs and supporting skills development and training of refugees.
“Those form the basis of our scorecard which we call the refugee lens scorecard,” explained Janakiram. He said these activities support the economic integration of refugees much more than a donation to a refugee charity, for example.
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How companies fare in terms of the direct provision of products and services that support refugees and philanthropy are also measured for RII’s scorecard. In total, the group looks at 39 metrics sorted in to tiers that are weighted according to impact.
This is gathered from what is available publicly although, Janakiram said, and RII would eventually like to gather the data via a survey.
A group called Upwardly Global provides one private source of data to RII. The non-profit works to help refugees build their career in the US, and is able to share how many people large corporations have hired through Upwardly Global’s programme.
Megatrends
Janakiram is confident there will be an increasing need for initiatives that integrate refugees due to “megatrends” like climate change and inequality leading to a predicted one billion displaced people by the year 2050.
“The number of refugees that were displaced doubled from 2010 to 2020.
“And now, as of last year’s statistics, there’s about 86m people around the world that are displaced, many of them being refugees. And a refugee is simply someone who’s forced to cross a border for safety,” he said.
Janakiram cited a report from the Institute of Economics and Peace that says one billion people could be displaced by 2050.
With this in mind, he emphasised the necessity for integration: “So once someone becomes a refugee, what’s the best possible thing you can do for them? What the UNHCR (United Nations High Commissioner for Refugees) and all the other subject matter experts in the refugee space say is the best thing to do for refugees is to economically integrate them. Integrate them otherwise – socially, in the community and everything – but economically integrating them to get them back on their own two feet is good for the refugee and restores their livelihood, their dignity.
“This is good for the community because the UNHCR says refugees when… they are resettled become what are called net positive contributors after eight years.”
Refugee lens index
As yet, RII is still in talks with asset managers, including Morgan Stanley, about developing a product that makes use of the refugee lens index. Janakiram and fellow co-founder and board director, Ignacio Paullier, have kept in contact with Morgan Stanley since winning the global 2020 Kellogg-Morgan Stanley Sustainable Investing Challenge with their product Refugee ETF. This went on to become RII and its data set, refugee lens scorecard and refugee lens index.
Janakiram said although he is very aware clients are not knocking down advisers doors for refugee integration products, it will stand out in an ESG space he said has become “saturated” and “commodified” with everyone “racing on price.”
Whereas he said he has been heartened by feedback on the index and is confident, “this could be refreshing. This could be something new that is meaningful, that could perk up the ears of some clients.”
