Accelerating Gender-diversity is Profitable

 

During the month of November, organizations in Canada like WXN and Women of Influence, celebrate the career accomplishments of women.  The subject of gender diversity and women in the workplace is active around the dinner table, but not only that, the subject of has been influencing the markets and investment decisions made by Canadians.

How is the subject of gender-diversity impacting the market?

  • The gender gap is costing the global economy. 28 Trillion dollars could be added the global annual GDP by 2025 if full gender equality is achieved in the workforce.
  • A recent study found that Empowering women would boost economic growth by up to 20%, (Citigroup says)
  • And we’re starting to see financial products pick up on this trend – Canada just got its first ETF that tracks large-cap North American companies most committed to gender diversity, it’s called HERS, and it only invests in the companies ranked highest based on things like parental leave, flexible schedules, female representation at the management, executive and board level, etc.

Why is gender-diversity important?

  • With 2018 around the corner, its insane to think that we are still a staggering 118 years away from closing the gender gap in work, health, education and politics.  I don’t want to wait another century before I see equal opportunities for men and women.
  • Companies that support women are forward thinking, and forward-thinking companies make more money. And they are helping us reach gender parity faster.
    • The proof is in the pudding: companies with boards that have a higher than average percentage of women outperform those with fewer than average by 36%.

How do you find gender-diverse companies – the best players, and also the worst?

  • Investors are looking more and more for these types of socially responsible investing screens, and now there are easy ways to include them in your portfolio.
  • Equileap, for example is a European non-profit that ranks the world’s largest companies on ALL gender-diversity practices. They evaluate the largest 3000 companies and rank the top 1000.  You could invest in these individual companies.
  • Or, you can take a broad bet on the benefits of gender diversity and invest in the ranking as a bundle. HERS, for example, a Canadian ETF listed on the TSX, actually includes the top 150 North American companies based on Equileap’s rankings.  Exposure to mega-market cap companies AND putting your money behind the benefits of a diverse workplace.

There are a lot of “gimmicky” investments out there. Is this trend in gender-diverse investing here to stay?

  • It has a proven, long-term investment thesis so it’s no gimmick. Gender diversity is good governance, which is part of socially responsible investing, and that is definitely here to stay.