When Responsible Finance Rhymes with World Women's Day
Few international days are as well known, celebrated and historically marked as International Women's Day. In some countries it is even a national holiday. It was at the turn of the 19th century that this day began to be noticed, particularly at the instigation of Russian women who demanded more rights, peace and justice in the aftermath of the First World War. The United Nations set this day as 8 March in 1975.
Gender equality and the empowerment of women became one of the sustainable development goals of the United Nations in 2015.
Progress has been made around the world towards this goal. For example, in Asia, the marriage of young girls has declined by 40% since 2000 and in Morocco, the female school enrolment rate is now over 85%(1).
Ensuring women's equal access to education, health care, decent work and representation in political and economic decision-making processes promotes sustainable economies and benefits societies. The United Nations consider that one dollar invested in programmes to improve income-generating activities for women generates seven dollars of growth.
While all countries around the world are struggling to contain the spread and consequences of the COVID-19 epidemic, lessons learned from similar circumstances show that women are singularly affected, and in many ways are harder hit. There is a risk of increased gender inequalities during and after the pandemic and a loss of decades of gains in human capital accumulation, economic empowerment and women's decision-making and action capacity(2).
In our developed economies, where the issue of girls' education is less acute, the focus is more on equal pay and equal access to positions of responsibility. Although the principle that men and women should receive equal pay for equal work has been enshrined in the European treaties since 1957, in many countries, we are still not on target.
Nevertheless, we note that the companies in which women are most highly represented have significant financial and even stock market performances(3).
Sources: McKinsey & Company(4)
An increasing number of socially responsible investors include among their selection criteria the indicator of the number of women in management bodies and on boards of directors.
At the same time, financial products are being developed from the criterium of gender equality in companies, such as "gender parity" ETFs(5). They are based on the index constructed by the research organisation Equileap, made up of 150 equally weighted companies from around the world with the best score in terms of gender equality.
On the occasion of Women's Rights Day, why not consider investing in this type of ETF, according to your investor profile, to support the cause of women? Your Private Banker is at your disposal for any further information.
(1) According to the World Bank report on education, released in 2018: http://www.worldbank.org/en/publication/wdr2018
(2) “Diversity Wins”, Mckinsey & Company, May 2020. Difference between the probability of financial outperformance and the national industry median of the five-year average EBIT margin using the full company data set each year
(3) According to the Institut Montaigne study, released in July 2019 (French only): https://www.institutmontaigne.org/ressources/pdfs/publications/agir-pour-la-parite-performance-la-cle-note.pdf
(4) « Genre et égalité hommes-femmes Vue d’ensemble », article by the World Bank, released on April 10, 2020: https://www.banquemondiale.org/fr/topic/gender/overview#1
(5) ETF (Exchange Traded Funds) or tracker means a financial instrument listed on a stock exchange that allows the real time tracking of a stock market index. These funds present a risk of partial or total capital loss.
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