As a global asset management company, we consider transparency a critical component of doing the right thing. We strive to be an industry leader in financial reporting and bring this same mindset to corporate social responsibility (CSR). While some firms remain cautious about making voluntary disclosures they consider "non-financial," Legg Mason considers them "pre-financial," and we believe that making them ultimately contributes to the bottom line. We openly share our key metrics and invite constituents to judge us, not just on our guiding principles, but our actions and our record, as well.
We recognize our commitment to CSR also as a competitive requirement — a key driver of success in today's global marketplace. There are competitive advantages to offering ESG investment products and to achieving leadership in CSR reporting. In general, companies that meet high environmental, social and governance standards face less regulatory risk and may be exposed to less reputational risk than those with lower standards.
Additionally, CSR is increasingly relevant to our key constituents, and sharing our results builds credibility and inspires their confidence in us. Investors want to know that we "walk the talk" of ESG investing by applying these principles to our own investments. Clients want to expand their investment options and mitigate volatility. Employees care about diversity of thought and environmental stewardship, and take pride in our performance. And communities seek reliable business partners that are committed to making a difference.
We continually scrutinize our CSR program to find ways to improve our performance and in FY2016, we made notable progress in several important areas. To address growing global demand for ESG products, Legg Mason Executive Committee members CFO Pete Nachtwey and Head of Business Development Tom Hoops convened all ESG leads from across the company to form an ESG Working Group to discuss how to advance ESG awareness and support related new product development.
We also added ESG expertise and capability through equity investments in two established investment firms — Clarion Partners and Australia-based RARE Infrastructure. Both Clarion and RARE — along with Western Asset — joined the list of Legg Mason Affiliates that are Principles for Responsible Investment (PRI) signatories.
In FY2016, our executive leadership team formally recognized diversity and inclusion as a critical strategic priority and we created a new Executive Diversity Council (EDC), sponsored by Tom Hoops, to continue the evolution of diversity and inclusion across Legg Mason. Building upon the terrific work of many deeply committed individuals across the firm over the past 10 years, the EDC will develop and promote firm-wide policies to promote awareness and address identified diversity gaps.
Legg Mason and our Affiliates also improve lives by making strategic investments in the communities where we live and work. In our home office city of Baltimore, we are especially pleased to have joined hands with other corporate leaders to support BLocal, an initiative to stimulate economic inclusion by building, buying and hiring local resources. This initiative is especially significant and impactful following the unrest of April 2015. Having outlined our commitment, we established a cross-functional working group to monitor our progress and explore opportunities to expand this engagement.
As an extension of this commitment to Baltimore, Legg Mason became the first corporate partner to hire a Baltimore Corps Fellow to help guide and expand our community outreach initiatives in underserved Baltimore neighborhoods. This Fellow will assist us in building partnerships with community stakeholders to build a better Baltimore for the long term.
As Legg Mason's formal CSR program enters its ninth year, I'm gratified to see that our commitment to such principles as workplace diversity and inclusion, environmental stewardship and community engagement have become central tenets of our culture and consistent with our mission.
This commitment begins with the personal engagement of our top executives and builds through our many employees who embrace sustainability initiatives and community service. It is also reflected in the substantial investments that the Legg Mason Charitable Foundation makes in youth education.
Together with our Affiliates, Legg Mason is committed to this important work. And we are excited by what we can do to improve lives — and positively impact the world around us.
Joseph A. Sullivan, Chairman and CEO