5 Ideas for Investors Who Want to Invest in Gender Equality
As responsible investors who care about women and gender equality, where should we focus the most attention? Are there further ways that investors and the industry-at-large could be more intentional in “divesting from the patriarchy,” and becoming better allies of women in our struggle for equality and liberation? What opportunities excite us the most if the desire is to make a bigger impact on women’s issues?
Women’s participation in the labor force has not recovered since the start of the COVID-19 pandemic, which has translated into lost wages and greater economic insecurity for families across the country and the world. Women experienced a lot of setbacks from the pandemic. According to this American Progress report, “the risk of mothers leaving the labor force and reducing work hours in order to assume caretaking responsibilities amounts to $64.5 billion per year in lost wages and economic activity.”
Gender lens funds have been around for a few decades, but despite money flow to these funds, the strong shareholder activism taking place within these funds, and many publicly traded companies actively making changes in their organizations to address things like pay disparities across gender, we still have not seen a big societal shift towards a healthier culture where we value a woman’s time and talent as much as a man’s, and where power and resources aren’t so concentrated in the hands of a few. Workplace culture shows all signs are pointing toward inclusion as being a best practice and an indication of better financial performance.
It is positive to see more attention from wealthy investors who can afford the risk of investing in women-led companies and startups through venture capital, angel investing, and private equity funds but money is still not flowing equitably to these founders. At the same time, the emphasis on maximizing returns may be at odds with an investor’s desire to invest in less-extractive ways which truly help communities build wealth.
Here are five ways to invest in gender equality:
- Choose investments that promote racial justice and income equality.
Women’s liberation is an intersectional fight! As investors, if we are more open and willing to move our capital to make an impact on multiple overlapping issues of discrimination, it may help investors feel less overwhelmed on how to actually engage in gender-lens investing. This may be especially helpful for investors who are skeptical about moving the needle on gender inequality solely through the public markets. By choosing investments that promote progress on social issues like racial justice and income equality, you can make a very real impact for women and other marginalized communities.
- Choose female advisors to manage your money.
There are many more women in positions of authority managing money these days, a big improvement to a white-male dominated industry. It is not hard to find highly capable female financial advisors and women fund managers across the public and private investment landscape. I feel very blessed to be able to work “in the trenches” every day with a slew of smart female colleagues who provide excellent advice to their clients and help them successfully achieve their goals, while challenging industry norms in both subtle and innovative ways. My female colleagues are more likely to refer a client who would be a good fit for my practice, take time to seek or share knowledge, improve internal communication and practices, and call for more collaboration in the field. This is the type of networking that our male colleagues have been doing all these years! So when women control capital, not only will the money flow to the right places, but it is helping to break the glass ceiling for more women and people of color to succeed within the field of finance.
- Invest in alternatives to Capitalism to further help change the investing landscape – like cooperative business models, microfinance institutions, and companies and fund managers that support and advocate for pay equity, unions, and workers’ rights.
There are opportunities to invest in gender issues in different asset classes. In the public markets, it is truly frustrating to see funds that focus on owning companies with a female CEO or more gender diversity in the C-Suite, yet the company is not being responsible from an environmental sustainability standpoint. The opportunities within the public markets are really not all that different than they were a decade or two ago. If we really wish to move the needle for women’s equality and freedom on a macro level, then investing in alternatives to capitalism is a good idea!
According to a study by Trillium Asset Management, “On average, non-unionized working women earn 78 cents to every dollar paid to non-unionized working men. Women who work in unionized workplaces, however, earn 94 cents for every dollar paid to unionized men. A research study by ADP from 2019 showed that the entire finance sector has one of the largest gender pay gaps of any industry sector, much of it due to the ways in which men move faster up the career ladder in finance than women. The problem isn’t just in the U.S., it’s worldwide. Men still make up a majority of the senior-level positions in the finance industry. Let’s stop the exploitation of women’s labor. We want our whole damn dollar!
- Donate to Women of Color-led Organizations that are Organizing for Policy Change.
The pandemic has exposed inequitable social policy issues that affect women’s economic and human rights. Organizing for pay equity, support for caregiving, paid family and medical leave, childcare for all), better workplace-family universal healthcare, reproductive freedom, are all issues that impact women. When we donate to important causes, how much is going toward women of color leadership?
- Spend more time listening to women.
Listen to the experiences of women and people of other gender identities and learn how patriarchy is affecting them. Listening leads to learning how to change behaviors.
Overall we hope that this article will help more investors understand that there are still ways in which we can leverage our investments to level the playing field. When we pay more attention to our investments and engage with our wealth, we can all be part of the solution toward a more equitable future.