2 Comments 2 Commentsby Andrea Malcolm
Dr Ayesha Scott, senior finance lecturer at Auckland University of Technology, says the aim of gender lens investing is to not only make a financial return but also to improve the lives of women. It goes beyond counting female representation on boards to include the number of female managers, leaders, and employees; the existence of policies and/or products a company provides to address the gender pay gap and other inequities their female employees face; and it encourages investing in women-owned enterprises.
Investing with a gender lens means identifying those companies empowering female employees, embracing diversity, and making themselves attractive to a large customer base - and investing in them. The problem is, a lack of investment portfolios or funds that invest in companies that do right by women.
Earlier this year Pathfinder added an ‘orange bond’, aimed at raising women’s capital rights in developing countries, to its KiwiSaver fixed interest allocation but the gender focus makes it an outlier in the market. Scott says one explanation for the lack of products is that identifying gender-friendly companies isn’t easy and this is where the ESG rating agencies have a role to play.
“Everyday investors do, in theory, have access to these markets and products but it is far from mainstream. The overarching point is that if we simply collected data on gender issues from companies who are already reporting on a whole range of ESG issues, that data would be available for every day investors to sift through if they are so inclined. Not everyone is going to want to invest with a gender lens but without the data available it becomes difficult for an investor to find.”
She says from an investor perspective, the question of whether they want such data is often asked and rarely included in investor surveys. The amount of literature on gender lens investing is small and it’s difficult to get beyond the number of women on boards.
“With ESG ratings you can get very granular scores and data on a whole range of things for companies globally but when it comes to issues of gender data is few and far between. The rating agencies say they collect data on material issues that are related to the risk and return of the companies they are rating; that implies that gender issues and gender equity are not as important to risk and return. It would be much easier to find data on palm oil or carbon emissions.”
Scott says while gender is not more important than any other [ESG] issue, it is interesting that if she were to call any fund manager in New Zealand about gender in portfolio, she would be unlikely to receive a satisfactory response. “I might get pointed in the direction of a responsible investing document or the ESG policies and decision making process but until this data is available it's going to be very difficult for them to answer. And so it is a little bit of a chicken and egg problem. In my opinion it is a material issue. We know women are important, that equality is a goal, and that we're not there yet. And so I think it is not much to ask that we answer these questions.
“I would challenge our fund managers to start thinking about gender and gender issues in their ordinary ESG work when researching their companies. The industry will start asking these questions and wanting this data if investors and financial advisors start demanding it. That sounds like strong language but this is the point that we’re at. It’s International Women’s Day this week and I can’t easily see whether the companies I’m invested in are doing good for women.”
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if someone is willing to pay me, i can assure you that can do more than that.
dr aysesha scott is absolutely correct. investors at the best possible return on their investment. personally, i don't even bother to look at the fee, i only look at the net return after fees and tax.