International Women's Day: what's the PRI and its signatories doing to advance gender equality?
March 08, 2017
Gender equality matters. Despite this, girls and women have equal access to education in only 25 countries and women continue to fall behind their male peers, both in securing leadership roles and compensation. In fact, a 2015 MSCI study found that only 18.1% of all directorships among MSCI World Index companies were held by women, falling to 8.4% among companies in the MSCI Emerging Markets Index.
And according to the World Economic Forum’s Global Gender Gap Index 2016, only 59% of the economic participation and opportunity gap between men and women has been closed. The recent SSE report on gender equality also estimates that at the current rate of progress, the gender pay gap will not close for more than 100 years, and the global average of women on boards will not reach 30% for another 10 years.
Gender on the investment agenda
This is bad news for business. That’s because several reports in the past few years show the positive correlation between more women on boards and better financial performance. For example:
• A 2013 Harvard University study found that the return on equity and net profit margin of companies with at least three female directors was significantly stronger than companies with no women on the board.
• A 2014 Credit Suisse study found a positive correlation between female directors and better corporate performance at 3,000 companies.
• A 2016 Peterson Institute survey of nearly 22,000 found a positive link between more female directors and corporate performance.
But this highlights an opportunity for investors. The McKinsey Global Institute found that if women were to participate in the economy in exactly the same way as men, it could add $28 trillion to annual global GDP by 2025.
It also found that if countries were to match the gender equality progress of the ‘best performing’ country in their region, annual global GDP could be lifted by as much as $12 trillion.
What is the PRI doing to advance gender equality?
So, what is PRI and its signatories doing to advance gender equality?
• The Sustainable Stock Exchange (SSE) Initiative has published a new report looking at how stock exchanges can advance gender equality. The report examines the state of gender equality, with a focused analysis on stock exchange practice in 13 markets, including Australia, Hong Kong, India, South Africa and the US. It also provides recommendations to exchanges on how they can advance gender equality.
• In recognition of the influence of stock exchanges to advance gender equality issues, 43 exchanges will be “ringing the bell for gender equality” as markets open around the world today. PRI Managing Director Fiona Reynolds rang the closing bell at the NYSE on Monday.
• Our events policy states that we won’t participate in any male-only panels.
• We will be supporting 10 female mentees through the 30% club mentoring programme, a cross-industry mentoring scheme designed to support women who aspire to senior management.
• On the investor side, there have been 81 diversity-related initiatives through the PRI’s Collaboration Platform, 51 of which are currently ongoing. One of these initiatives is the Thirty Percent Coalition which has been ongoing for over five years. The Coalition has more than 80 members, representing over $3 trillion in assets under management and engages S&P 500 and Russell 1000 companies who previously had no women on their boards. As of late 2016, the Coalition commended more than 100 companies who had added a woman to the Board of Directors following efforts from the group.
Signatories wanting to get involved can look at diversity-related engagements on the PRI website, or contact firstname.lastname@example.org to launch their own initiative.