Globally, women hold 6.7% of board chair positions and only 5% of CEO positions*

Women are often underrepresented in leadership positions and face pay gaps and other forms of discrimination. 

As investors, it can be important to consider gender equality when making investment decisions. 

In this blog, we'll discuss:

1. Gender lens investing 

2. Gender ETFs 

3. UN SDGs 

4. Challenges and future of gender equality investing.

Quick Summary

- Gender lens investing aims to promote gender equality and enhance decision-making

- Strategies include investing in companies with diverse leadership or those that prioritize gender equality in their policies and practices

- Gender ETFs provide a diversified portfolio of investments while supporting sustainable development and promoting gender equality

- Investors can use UN SDG revenue alignment to assess the extent to which their investments support gender equality objectives

- Challenges include the limited availability of data on gender diversity in companies

What is Gender Lens Investing

Gender lens investing refers to investment strategies that incorporate gender-based considerations with the aim of promoting gender equality and enhancing investment decision-making.

Some common strategies include investing in companies with diverse leadership or those that prioritize gender equality in their policies and practices. 

Each company's approach is likely to differ from others and there’s no one size fits all metric. So it can be useful to look deeper into companies' data to get a clearer picture of how much they emphasise gender lens investing.

But you might commonly see percentages of each gender in various leadership positions. 

That’s certainly not the end all be all of gender equality, but it’s some of the more widely available data.

Gender Equality ETFs

Investing in gender ETFs is like investing in a basket of stocks that prioritize gender diversity in their leadership and workforce.

Gender ETFs can provide investors with a diversified portfolio of investments whilst potentially generating financial returns and supporting sustainable development.

That means you could be investing in a wide range of industries with a single investment.

Gender ETFs typically provide exposure to companies which score highly for gender equality using indicators such as:

✔️Gender balance

✔️Fair compensation

✔️Equality policies

✔️Transparency

UN SDGs and Investing in Gender

UN Sustainable Development Goals are 17 global goals adopted by the UN in 2015. They are a blueprint for achieving a sustainable future, and they cover a range of issues, including gender equality.

4 SDGs related to gender equality are:

SDG 5: Gender Equality

SDG 8: Decent Work and Economic Growth

SDG 10: Reduced Inequalities

SDG 17: Partnerships for the Goals

Investors can assess their investments in gender lens ETFs to determine the extent to which they support gender equality objectives. One approach is to examine the UN SDG revenue alignment of the companies included in the ETF.

UN SDG revenue alignment is used to determine the percentage of a company's revenue that is derived from products or services that support specific SDGs. For example, a company that provides training and development opportunities for its female employees may have high revenue alignment with SDG 8: Decent Work and Economic Growth.

By investing in gender ETFs with robust UN SDG revenue alignment, investors may potentially generate financial returns while contributing to the attainment of gender-related SDGs and promoting sustainable development.

Challenges Facing Gender Equality Investing and ETFs

Despite the potential benefits of gender equality investing, there are several challenges facing the industry. One challenge is the lack of standardized definitions and metrics for measuring gender diversity and equality in companies. 

Additionally, there is limited availability of data on gender diversity in companies, which makes it difficult for investors to accurately assess the gender diversity of companies they're investing in. 

Don’t expect to be able to get every detailed piece of information you want immediately, we’re a long way from that yet.

The Future of Gender Equality Investing and ETFs:

Despite these challenges, there have been recent developments in gender equality investing and ETFs. 

Some companies are increasing their focus on gender diversity and equity, and there is growing interest from investors in promoting gender equality. 

However, there are still potential growth opportunities and challenges for the industry. Investors have a role to play in promoting gender equality in the investment industry by considering companies with diverse leadership and advocating for change.

Gender Equality ETFs at GOODFOLIO

By investing with a gender lens, investors can make a positive impact on the future of society while potentially generating financial returns. 

GOODFOLIO is an investing platform designed for conscious investors. Funds go through a screening process and are categorised by sustainability themes including Gender Equality ETFs and Water ETFs.

That also includes:

1. Fast sign up - typically onboard in less than 10 minutes‍

2. Themes - funds are categorised by sustainability themes

3. Screened ETFs - funds are screened to meet our transparency and sustainability information standards

4. Impact reporting - up to date reports including UN SDG revenue alignment

5. Cutting edge tools -  ETF comparison tools based on impact, risk and returns

6. Sustainable ISA - create a new ISA or transfer your existing one with our help

7. Great customer support - we are always here to help!

Join the future of investing and start your free GOODFOLIO account today!

As with all investing, your capital is at risk.

Source: IFC