Accelerating SDG 5 through Gender Lens Investing- insights from investors

Published on 30 August 2023

We are not investing in women with a political agenda or motivation; but rather doing this on a “pure return” perspective” - Eva Halvarsson, CEO of Andra Ap-fonden (AP2) from Sweden, one of northern Europe’s largest pension fund.

Setting the scene – we need to speed up to achieve SDG 5 by 2030

The second edition of WEPs deep-dive series highlighted the role of investors on advancing gender equality in the private sector. In her opening remarks, Anna Falth, Global Head of WEPs Secretariat at UN Women, emphasized the role of investors in advancing gender equality. She explained that the current speed will not enable SDG 5 to be achieved by 2030, and how WEPs team has been working to advance gender equality in the private sector. She highlighted the role of investors and need for transparent data to track results - “Recent years, investors have started to invest with gender lens for better return on investment and as a risk mitigation strategy. The WEPs framework provide investors and investees with blueprint for gender equality in the workplace, marketplace, and community.”

Measuring Gender Power within companies

Katharina Hopener and Andreas Hoepner from ExecuShe introduced their Gender Engagement benchmark report that shows how gender equality could be tracked in a company’s operation and beyond. Their research findings provided valuable insights into gender power calculations. The monetary weight of power held by female executives was proportionally lower compared to their male counterparts, particularly when it came to voting power. This disparity was attributed to traditional positions held by women executives.

Additionally, ExecuShe's Gender Engagement Benchmark Report showcased the impact of engagement on gender return and the advancement of SDG 5. The report emphasized a crucial comparison between targeted and non-targeted companies by the French Insurance, taking into account Gender Diversity and the Gender Power Gap metrics. The engagement appears to have been effective prior to Covid-19 and has been unexpectedly negative since the onset of Covid-19. Remarkably, non-targeted companies showed improving performance over time in terms of both Gender Diversity and the Gender Power Gap. However, engaged companies exhibited a decline in performance concerning SDG 5.

The impact of Gender Equality on Investment

As an investor, John Streur, CEO of Calvert Research and Management, reiterated the importance of data, similar to the findings of ExecuShe. As an investor, John encouraged companies to be more transparent on the information about their demographic within the company. " As an investor to know if a company is truly working on diversity, gender equality and women’s empowerment, we need more data. We want to see information about gender pay gap throughout the organization. In addition, or ultimately, we want to see who has what job at what level. Many companies are already disclosing their internal policies and procedures, but we want to see if it’s happening beyond the policy level”. He also added that adding more women to the board and executive ranks are important, and other intersectional lens shall be applied when doing so.

Why do you care about gender equality as an investor?

“Companies that focus on gender equality is a better investment” was the first thing Eva Halvarsson, CEO of Andra Ap-fonden (AP2) said. She explained different quantitative approach that was developed to measure sustainability and the engagement of women. “For over 20 years, AP2 has been tracking the data on women as we want to drive change with facts. For instance, in Sweden, Women in board figure has increased from 6 to 27% from 2003 to 2023 in publicly listed companies. We have also found positive correlation between having women in nomination committee and women on board”.

“We are not investing in women with political motive but rather, doing this on a “pure return” perspective” said Eva when she was explaining the three different investment styles of over 42 billion USD that AP2 manages. According to Eva, AP2 invests with three different approaches depending on different asset classes. The first approach is qualitative, and when AP2 invests with this approach, they look at the proportion of women in the company, as companies that have more women has demonstrated better return over the years. The second approach is fundamental investing, and this is when AP2 invests in fewer companies with very close relationship. AP2 participates in continues dialogue with the investee, take part in nomination committee for the board, and votes “no” to the boards without women. Lastly, when they are investing in private asset, they focus on the due diligence. They require companies to work on diversity within the company with policies and guidelines to improve gender parity at all level. Eva added that while AP2 has different ways to invest, they apply different ways to integrate diversity always.

How is a WEPs signatory responding to the increased attention from the investors?

Maria Pilar Rojas, Corporate culture diversity and inclusion leader at REPSOL was certain that RESPOL will eventually get to the “gender parity” and gender equality, but the pace is the issue. The company wants to accelerate the pace, and she acknowledged the important role that the investors are playing to drive this transformation. As a WEPs signatory, REPSOL works beyond compliance to respond to investors’ requests. “We share information on DEI, including gender pay gap in our integrative management report and webpage. We have programs to raise awareness and highlight REPSOL’s commitment to ESG and achievements.” Said Maria. Her company’s goal is to achieve gender parity in recruiting through implementation of gender-neutral recruitment policies; and to increase the representation of women in the leadership positions through targeted development programs and opportunities.

Call for transparent data tracking

The message from the panelists were clear. We need more data. We need more gender-disaggregated data, and it should be shared transparently. Collecting data on such indicators would be an opportunity for companies to reflect on their current policies and practices, and help them to understand where they need to work on next. Transparently sharing data would support investors to make informed-decision to invest in companies that are working on advancing gender equality and supporting women to thrive in the workplace and beyond.



You can watch the recording of the webinar here.