In spite of all the efforts of the last century or so, gender equality still remains a goal rather than a reality. Around the world, women and girls are disadvantaged by the inequalities in our society. The position today is undoubtedly better than it was for previous generations, especially in the developed world. But we still have a long way to go. The UN published a Policy Brief in April 2020 entitled ‘The Impact of COVID-19 on Women‘. In the opening paragraph, the UN outlines the impact of the pandemic: The year 2020, marking the twenty-fifth anniversary of the Beijing Platform for Action, was intended to be ground-breaking for gender equality. Instead, with the spread of the COVID-19 pandemic even the limited gains made in the past decades are at risk of being rolled back. The pandemic is deepening pre-existing inequalities, exposing vulnerabilities in social, political and economic systems which are in turn amplifying the impacts of the pandemic.
Gender equality has a knock on effect on so many of the other sustainable development goals. Ensuring a fair and equal approach in business and investment, therefore, is essential for a truly sustainable future. Its worth outlining the underlying targets for the Gender Equality SDG:
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End all discrimination against women and girls everywhere.
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Eliminate all violence, trafficking, sexual and other forms of exploitation.
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Stop all harmful practices such as forced marriage and female genital mutilation.
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Recognise and value the contribution of women in unpaid care and domestic work and promote shared responsibility as nationally appropriate.
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Make sure women are equally involved at all levels in political, economic and public life.
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Ensure that access to sexual and reproductive health and rights are universally accessible.
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Undertake reform measures to make sure women have equal rights to economic resources, natural resources, property etc. in accordance with national laws.
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Promote the empowerment of women through technology, information and communications technology.
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Create sound policies and enforceable legislation to promote gender equality and the empowerment of women and girls at all levels.
ESG Investment
Numerous studies have confirmed that investing in firms with good adherence to gender equality is not just ethically desirable, but studies confirm that companies with women occupying executive positions or several board spots outperform their less gender diverse counterparts.
The Market Potential of Gender Equality
Over a five-year period (2011–2016) for example, U.S. companies that began the period with at least three women on the board experienced median gains in return on equity (ROE) of 10 percentage points and earnings per share (EPS) of 37%. Companies without a female director as of 2011 experienced median changes of -1 percentage point in ROE and -8% in EPS over the study period. no doubt there were other factors at play, but at the very least this stat helps to present the positive impact a gender-diverse senior management team can make.
The Lyxor Global Gender Equality UCITS ETF (ELLE) tracks 150 companies across the globe that score highly for equality using criteria such as gender balance at top levels, equal pay and diversity-friendly corporate policies. This was launched following the success of State Street Global Advisors’ SPDR SSGA Diversity Index ETF (SHE) in the US.
The ethical importance of gender equality is obviously well established. But it is now becoming increasingly clear that doing the right thing in this area can also bring good returns on investment.
Of course, the ‘G’ in ESG definitely involves taking gender equality into account. Companies and stakeholders working for gender equality can implement a range of governance practices and policies that can help ensure balance and fairness in the workplace.
Metrics such as births per woman, women in parliament, and women in the labour force can help shed light on the role of women at the sovereign state level. Rates of pay, career progress statistics, and representation at different levels within a corporation are obviously also important things to look at. The atmosphere and ethos within a company are also crucial to making everyone feel valued, and to allow everyone to contribute to the best of their ability.
Increasingly, corporations are under pressure from investors, and from the public to ensure that there is true gender equality within their organisational structures and that their board and management structures are representative of that equality. Those who do not take steps to improve their ESG scores relative to gender equality will lag behind, and no doubt risk reputational damage.