What are the benefits of sustainable investing?
Deirdre Cooper, co-manager of the Ninety One Global Environment fund, gives us a quick overview of...
Gender equality. We protest for equal rights, hold global events such as International Women’s Day, we mark Equal Pay Day… the list goes on. Yet progress in this area is perpetually under target. Women continue to live in a world designed for, and run by, men.
True sustainability can only be achieved through long-term investments in areas such as environmental and economic capital. But importantly, investment in human capital is also required. At present, the female half of the world’s human capital is undervalued and underutilised. But better use of the world’s female population could increase economic growth, reduce poverty, enhance societal well-being, and help ensure sustainable development in all countries.
“Gender equality is more than a goal in itself. It is a precondition for meeting a challenge of reducing poverty, promoting sustainable development and building good governance.” — Kofi Annan, former Secretary-General of the United Nations (1997-2006)
The UN’s SDG #5 is to achieve gender equality and empower all women and girls. Globally, we aim to end all forms of discrimination against all women and girls. This encompasses hard to talk about areas like violence against women; exploitation; harmful practices such as child, early and forced marriage; and female genital mutilation. It means recognising the value of unpaid care and domestic work and policies that promote shared responsibility in a household. It’s universal access to sexual and reproductive health and reproductive rights. That’s just to name a few.
Unfortunately, the UN has reported that the pandemic is clawing back limited progress in the past 25 years on expanding women’s rights and opportunities, including for economic participation and political voice. Violence against women has been intensified and nearly 1 in 3 women have been subjected to physical and/or sexual violence at least once since the age of 15, usually by an intimate partner*. Child marriage, which had been on the decline, is expected to increase, putting up to 10 million more girls at risk of becoming child brides by 2030**.
On average, pre-pandemic, women spent about 2.5 times* as many hours on unpaid domestic work and care work as men. This rose to 3.2 times* as many hours, as women were expected to take on the burden of additional child care and household work during the pandemic – an added burden of unpaid domestic work that squeezes women out of the labour force. Why? Because unpaid work can cut into their work hours or stretch them too thin making them less willing, or able, to take on more responsibility at work or apply for a promotion.
Women’s contributions to the pandemic has been profound. Did you know, for example, that Hungarian biochemist Katalin Kariko’s worked on mRNA that led to two vaccines? These contributions occurred despite the fact that women comprise less than a third of all researchers globally. Gender gaps among researchers may partly reflect women’s lower presence in STEM fields (science, technology, engineering and maths), where just over a third of graduates are female.
Girls and women are still systematically moved away from science and maths throughout their education, limiting their access, preparation and opportunities to go into these fields as adults. The gender gaps are particularly high in some of the fastest-growing and highest-paid jobs of the future, like computer science and engineering (SDG 9). Giving women equal opportunities to pursue — and thrive in — STEM careers helps narrow the gender pay gap, enhances women’s economic security, ensures a diverse and talented STEM workforce and prevents biases in these fields and the products and services they produce.
Despite the key role of women as frontline workers, care providers, and as managers and leaders of recovery efforts, they remain underrepresented in leadership positions. Globally, women comprise over 75% of the health workforce, yet they make up only 28% of health executives**. Thus, women’s rights and priorities are often not explicitly addressed in response and recovery measures.
The last couple of years have only served to increase the gender pay gap. Not only have women been more likely than men to lose their job or be put on furlough, but research shows that they have also been taking on a bigger share of childcare and household duties in lockdown.
The gender pay gap holds women back from building long term wealth and financial independence. Experts have predicted that the economic fallout of the past couple of years could delay the closing of the gender pay gap by as much as 30 years. Not only this but missed pension payments could also leave women substantially worse off in retirement too.
So, ladies, let’s start by asking for a pay rise, or you may consider job hopping. A 2014 Forbes report says that staying with the same employer for over two years on average will make you earn less over your lifetime by about 50% or more***. Forbes says this estimate is in fact conservative. Loyalty doesn’t always pay.
Gender equality is an area where active engagement with companies can push for better. A good example of collective action is the 30% Club campaign, which targets increased diversity at board and senior management levels. In part two of our Women’s Day podcast special we cover this initiative more in depth.
Research shows that companies with more women in executive leadership positions are more profitable^. But as Deirdre Cooper, co-manager of Ninety One Global Environment, points out in the podcast, this gender diversity is important from the ground floor through to the executives to help close the gender pay gap. EdenTree, whose CEO and co-manager of the EdenTree Responsible & Sustainable UK Equity fund is Sue Round, has had gender diversity at the heart of its engagement strategy for some time.
Globally, just 1 in 10 fund managers is female. I’m happy to say that 21% of funds on FundCalibre have listed female managers with 17% as equal co-managers or lead managers on the fund.
Gender is one area where the Sustainable Development Goals overlap in every area, so much so that the UN reports on each target from a universal and gender-based point of view. However, two goals stand out: climate change and poverty.
Figures indicate 80% of people displaced by climate change (SDG 13) and climate-related disasters are women and girls^^, while 70% of the 1.3 billion people living in conditions of poverty are women^^^ (SDG 1). Women predominate in the world’s food production, but they own less than 10% of the land.^^^ Women’s ownership or control of land is critical to economic empowerment. Studies show that if women had equal access to land, poverty and food insecurity would be significantly reduced around the world.
It is crucial that sustainability and gender equality efforts globally go hand-in-hand.
*Source: UN Sustainable Development Goals, 2021 Report
**Source: UN gender snapshot report 2021
***Source: Forbes, 22 June2014
^Source: Diversity wins: how inclusion matters, McKinsey, May 2020
^^Source: UN News, Women bear the brunt of the climate crisis, Nov 2021
^^^Source: UN, Women…in the shadow of climate change