Over three days of conference events at IPEM 2020 in Cannes this week, one topic of conversation has dominated: the private equity industry’s responsibility to shift its approach to gender diversity.

On Day One, Eurazeo chief executive Virginie Morgon told delegates that, with women making up just 6 percent of PE decision-makers per Harvard Business School data, the industry shouldn’t be proud of what it’s achieved so far. When it comes to the staggeringly low ratio of private equity-backed, women-led business in the US and Europe – 2.2 percent – well, “it has to be a joke”.

“It’s a disgrace. We have to face it. We have to make some changes.”

In France, Eurazeo’s home base and the setting for the conference, the ratios are similar: women-led companies in French GPs’ portfolios from 2006-11 accounted for just 5 percent, according to data from Women Equity Partners. Its latest survey in 2018 shows there has been no change over time, said Dunya Bouhacene, a partner at the firm, at IPEM’s women in private equity panel on Wednesday.

As these stats make clear, talk is all very well, but is it actually converting into action?

There are some signs that transparency and disclosure around gender diversity is moving up the agenda for industry associations.

Last year the UK government launched the Women in Finance Charter, which requires financial services firms with more than 250 employees to report gender diversity figures. At IPEM, France Invest revealed that in the next couple of weeks it will sign a charter on gender diversity, which will require its LP and GP members to measure diversity in their teams and track improvements in addressing diversity issues.

At IPEM’s women in private equity panel, female senior executives from OMERS, Pantheon and Amundi said there are encouraging signs the industry is moving in the right direction. Progress, however, is slow.

“Without senior engagement in the industry, nothing really happens,” said Pantheon’s head of European investment Helen Steers. “And because all seniors are men, then without male engagement nothing will happen.”

While the limited partner community has made positive noises about promoting diversity and inclusion at their fund managers, they have yet to step the pressure up to a level that would galvanise widespread action.

For instance, Chris Schelling, director of private equity at Texas Municipal Retirement System, told PEI the $30 billion pension fund was thinking about incorporating diversity and climate change in its due diligence and risk assessment when backing GPs, while another senior executive of a US public pension said he “doesn’t think the pension has any diversity criteria” in selecting GPs.

One US-headquartered fund of funds manager we spoke to has a “tracking exercise” – a ratio of the “diverse” employees over the total – in its due diligence questionnaire. The firm does not force diversity on its GPs, nor does it have a mandatory quota, but “encourages” its managers to keep a record of diversity, a partner at the firm tells us.

“It’s non-invasive, non-prescriptive, but it’s bringing awareness to us as investors and to the GP. It’s demonstrating to them that we do care about it.”

What’s more, while 78 percent of respondents to PEI’s LP Perspectives 2020 survey indicated that diversity and inclusion forms either a major or a minor part of their due diligence process, 54 percent said they do not actively engage their fund managers to promote gender diversity and inclusion.

It’s encouraging to hear leaders like Morgon make a case for greater diversity within the industry and its portfolio companies, but will fund managers heed the call?

Write to the author: carmela.m@peimedia.com