Two of the nation’s largest black investment banks, Siebert Williams Shank & Co. (SWS) and Loop Capital Markets, are teaming up with five of Wall Street’s biggest state and local government bond buyers to lay down questions to potential clients about racial equity.

Municipal Underwriters SWS and Loop Capital are working with BlackRock Inc., Goldman Sachs Asset Management, Lord, Abbott & Co., Morgan Stanley Investment Management and Vanguard Group Inc. on a groundbreaking nationwide partnership in their business.

Siebert Williams Shank was the senior director of $ 328.5 million broadcasts for the New York State Dormitory Authority for its university system serving 220,000 students.

Chairman and CEO of SWS Suzanne shank Recount BLACK COMPANY via email that investors have long focused on ESG policies and disclosure in the corporate sector. Now they are turning their attention to the $ 3.8 trillion municipal bond market. The questions aim to provide investors with essential information about the efforts of government entities to promote equality.

“As MWBE’s first municipal finance company in over two decades, it was imperative for Siebert to join this partnership engaged in such an important social initiative,” said Shank.

Warren “Bo” Daniels Jr, The head of the public finance division, Loop Capital, said in a press release: “Loop Capital is delighted to be part of such an important and meaningful project. We believe that a framework that provides interaction between issuers and investors is a positive development to achieve greater transparency. “

Over time, Shanks says information related to these topics is expected to play a bigger role in buyers’ investment decisions.

the survey, Known as the Municipal Issuers Racial Equity and Inclusion Commitment Framework, seeks answers to how cities are focusing on racial inequalities across America. It is now complete and can be viewed on the website of JUST Capital, a non-profit organization that collaborated on the investigation.

The new effort comes as a focus on racial equality and social conscience issues following the murder of George floyd and subsequent national events of Black Lives Matter. Investors are putting more emphasis on social awareness with an increase in issuance of ESG bonds, specifically social bonds.

Shank says that the fact that some of the largest municipal bond investors are asking for transparency about the racial and social policies of municipal issuers demonstrates the importance of these issues to the investment community. Existing and potential clients will be invited to complete the questionnaire before setting up bond transactions.

“The voluntary responses to the framework provide an opportunity for government entities to increase communication with buyers of their bonds and strengthen those relationships,” she said.

SWS and Loop Capital are committed to presenting the framework to municipal issues when entering markets. Shank explained that since issuers’ bonds are regularly traded in the secondary market, this information can help buyers make investment decisions driven by an inclusion-oriented business.

Moreover, the increase in income or profits were not the main motives that led to the new initiative.

“We didn’t partner with the alliance to gain more business,” Shank said. Rather, we wanted to ensure that our clients were fully aware that investors are looking for greater transparency with respect to social and equity issues and might decide at some point to make investment decisions based on the policies of a municipality.