It's Time to Invest in Her - 2019 the Year of Investing in Women

Dec 10, 2018 10:05 AM ET
Article

by Joe Keefe President and CEO, Pax World Funds

We are in a moment. The moment of Time’s Up and #MeToo. The moment of women’s marches. The moment of Harvey Weinstein and Justice Kavanaugh. The moment when more women than ever before have been elected to public office. It’s also the moment when investors have an historic opportunity to become a powerful force for advancing gender equality across the globe.

We need to build on the tumult of the last 12 months and make 2019 the year when corporations and financial markets turn decisively against gender discrimination and inequality, declaring quite simply that it is no longer acceptable. We need to make 2019 the year of investing in women.

I’m convinced that we can persuade corporations and financial markets to take this leap. First, because the data is overwhelming: Where women are better represented in corporate leadership, businesses simply perform better. Gender diverse teams deliver better results than homogeneous ones. Case closed. Full stop.

Also, there is powerful evidence that women, millennials and others want to invest in companies with gender-diverse leadership. When it comes to unequal pay, or non-diverse leadership teams, or discrimination and violence against women, growing numbers of investors want their money to be part of the solution rather than part of the problem.

There is also a strong risk argument for gender lens investing (GLI). First, there is research suggesting that women sometimes approach risk differently than men and that gender diverse leadership teams can help companies lower risk. But just as importantly, there is Investing 101 and the core principle that investment portfolios must be diversified — that overweighting certain asset classes or other factors (equities vs. fixed income, domestic vs. foreign stocks, developed vs. emerging markets, large cap vs. small cap, one region/sector vs. others, etc.) creates greater risk. If so, and given overwhelming evidence of the performance advantages associated with gender-diverse leadership teams, why would anyone want to overweight their investment portfolio toward men?

It’s time to put the diversity in diversification. Gender lens investing is simply smart investing.

It’s also time to recognize that gender inequality — where half the human race is subjected to systematic discrimination, oppression and violence — is the great human rights issue of our time. We are not simply talking about women being underrepresented on boards or earning roughly 20 percent less than men. We are talking about honor killings and genital mutilation and trafficking in young girls. We are talking about legal and de facto discrimination, about gender-based violence, about human rights abuses in supply chains. We are talking about our daughters, our partners, our mothers, our sisters.

Corporations and financial markets are supposed to work for them, too. It is time they did.

As engaged investors, we need to persuade the companies in our investment portfolios to say loudly and clearly: We will no longer tolerate gender inequality — on our boards, in our executive suites, in our workplaces or in our supply chains. Case closed. Full stop.

This is the task before us — for 2019 and beyond. Our industry cannot even begin to talk about investing in the transition to a more sustainable global economy unless gender equality is a core component of that transition.

Not incidentally, eradicating gender inequality could help unleash perhaps the greatest period of economic growth in the history of the planet. Research suggests that if women participated in the economy to the same degree as men, it would add $28 trillion to global gross domestic product by 2025 — equaling the combined output of the United States and China, the two largest economies in the world, every single year.

The smartest companies understand this. They understand that gender diversity is key to other critical business challenges: talent acquisition, workplace culture, the need for innovation. Moreover, companies with more gender diverse leadership teams are more likely to enjoy collateral or derivative benefits in connection with the same: pay equity, parental leave and other improved benefits, plus lower levels of discrimination.

The sustainable investing/ESG industry is where gender lens investing was invented....

READ Joe Keefe's full article and Bio here -  https://greenmoneyjournal.com/its-time-to-invest-in-her  

 

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Cliff Feigenbaum, founder and managing editor
GreenMoney Journal and GreenMoney.com
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