#IWD2022: Robeco explains how investors can break down gender bias

  • Systematic gender bias and pandemic stress have negatively impacted working women, as #IWD2022 reminds us

  • Women generate substantial value for companies, countries and society

  • Investing and engaging with a gender perspective targets biases, stress and inequalities, says Robeco

Today we get in touch with our inner female power as we celebrate International Women’s Day here on IFA Magazine. It is a day when, all over the world, people seek to highlight the achievements of women in the economic, social, political and cultural fields. The theme of this year’s IWD campaign is #breakthebias, something Robeco has gone into in detail as explained in the article below:

As Robeco reminds us today, before the pandemic, it was prejudice and glass ceilings; today, pandemic-induced exhaustion, burnout and unemployment present additional hurdles for working women.

The burdens and prejudices that working women face have intensified, as have their contributions to business and society. The world needs companies that address long-standing sources of bias in business, but also step up to confront new forces that impede the advancement of women and reduce workforce diversity. .

Obstacles and prejudices

The pandemic has been a formidable force that has laid bare women’s struggles to successfully manage the demands of professional work and personal life. Yet before the pandemic, women were already suffering under the force of systematic workplace biases that made them worse in terms of pay and promotion. A recent survey found that 85% of both men and women agreed that it was easier for men to rise to leadership positions than for equally qualified women – opinions that were confirmed in the data.

In the United States and many developed countries, women make up half of the total workforce, but are vastly underrepresented in management and leadership positions. A recent study of critical US industries found that women hold only a quarter of the total number of leadership positions and just 6% of CEO positions.

A plethora of workforce studies point to the biases that hinder women’s advancement. Unspoken misconceptions include a tendency to think that women prioritize family over career as well as the perception that men make more effective leaders. Global statistics show a similar trend.

“A recent survey found that 85% of men and women agreed that it was easier for men to advance to leadership positions than for equally qualified women.”

The price of a pandemic

Besides the high cost of prejudice, the pandemic has also had a disproportionate impact on women. Overall, women suffered a job loss of 5% compared to 3% for men. In Europe, wage losses during the pandemic were 8.1% for women compared to 5.4% for men. As the pandemic drags on, the gap between female and male burnout levels has doubled. In the United States, if the unemployment figures counted the nearly two million women who have left the labor force since February 2020, the unemployment rate for women would have been 6.8% at the end of September 2021.

Although employment has since rebounded, this has not been enough to offset gender losses over the long term. According to estimates by the World Economic Forum, the gender gap has increased by 36 years, more than a generation.

Social, financial and environmental gains

The benefits of attracting, retaining and promoting women in labor markets are manifold. Women gain purpose and autonomy for themselves, as well as income and stability for their families. At the macro level, studies show that closing the gender gap in labor force participation adds to national GDP – up to 80% in some cases. Globally, McKinsey has predicted that promoting gender equality could increase GDP by $13 trillion by 2030.

The benefits also accrue to businesses. Mixed companies that actively seek diversity in policies and practices are linked to lower levels of staff turnover and higher levels of employee satisfaction and engagement. In addition to social metrics, women-led businesses achieve better financial metrics, including higher earnings (EBIT), higher returns on equity (ROE), and higher stock prices. And the more diversity is pervasive within an organization, the stronger the relationship with financial performance.

“Women-led businesses achieve higher earnings (EBIT), higher returns on equity (ROE), and higher stock prices.”

In addition, women at the top help protect both internal corporate climates and external climates. A McKinsey study conducted during the pandemic found that female managers cared more about the well-being of their subordinates than male managers at the same level. And a Bloomberg New Energy Finance analysis of more than 11,700 companies demonstrated a positive correlation between a critical mass of women on the board and climate governance and innovation.

Gender investment and engagement

Gains in the socio-economic and environmental spheres have made retaining and promoting women in the workplace a strategic imperative for many countries and companies. Likewise, the increase in gender-focused investment flows means that it is an increasingly critical objective for investors. Gender-Lens Investment (GLI) portfolios base investments on specific gender-promoting criteria such as equal pay, representation rates, retention rates, and flexible working policies. GLI’s assets have grown nearly fivefold since 2018, reaching nearly $12 billion in 2021.

“Increased flows into gender-focused investing mean it is increasingly a critical focus of investors.”

“Evidence shows that women bring more innovation, more creativity, more thoughtful decision-making, all of which combine to improve the bottom line,” says Audrey Kaplan, co-portfolio manager of Robeco’s GLI fund. “For our own investments, we consider workforce diversity among a universe of other diversity and inclusion factors when selecting companies to invest in.”

The benefits of having diversity and inclusion (D&I) in a company’s DNA has made it a key part of Robeco’s active ownership team. This year marks the launch of the team’s dedicated D&I engagement program which builds on previous work in the field. The program will encourage company management to make progress on equal rights and opportunities for all employees, with particular emphasis on the participation of women in senior management and on boards of directors.

While government regulations and policies will always be important, these are just some of the ways investors can also help break down old biases and build back better for a new generation of workers.

[i] “Women in Leadership, Why It Matters.” US-based survey by the Rockefeller Foundation. https://www.rockefellerfoundation.org/wp-content/uploads/Women-in-Leadership-Why-It-Matters.pdf

[ii] “The female C-Suite ranks are growing – quite a bit.” (2019). A Korn Ferry Management Consulting survey of US industries including consumer goods, retail, energy, finance, healthcare, services and IT.

[iii] “Women at work in G20 countries: political action since 2020.” OECD/ILO. Revised June 2021.

[iv] ILO Global Wage Report 2020-21.

[v] Report on women at work. 2021. McKinsey and Co. / Lean In Org. Burnout levels measured between the 2020 and 2021 surveys.

[vi] National Women’s Law Center (USA), September 2021 fact sheet. https://nwlc.org/wp-content/uploads/2021/09/Aug-Jobs-Day.pdf

[vii] World Economic Forum Gender Gap Report. 2021.

[viii] Boston Consulting Group. Gender equality. Infographics. https://www.bcg.com/capabilities/diversity-inclusion/gender-equality

[ix] COVID-19 and gender equality: countering the regressive effects. 2020. McKinsey and Co.

[x] Catalyst.org., Organizational Studies (2019). “Not Just Good for Her: A Time-Based Analysis of the Dynamic Relationship Between Female Representation and Collective Employee Turnover.”

[xi] Catalyst. Academic research demonstrating that inclusive workplaces maximize talent and productivity.

https://www.catalyst.org/research/why-diversity-and-inclusion-matter/. Accessed February 2021.

[xii] “Gender diversity improves ROE, reduces risk.” (2018). Bank of America/Merrill Lynch Research. Morgan Stanley Research, 2019. Credit Suisse 3000 Report (2021).

[xiii] Credit Suisse 3000 Report (2021). RobecoSAM Gender Research Report, 2020. https://www.robeco.com/en/insights/2020/04/how-a-better-gender-balance-boosts-profits.htmlrobecosam study link)

[xiv] Report on women at work. 2021. McKinsey and Co. / Lean In Org.

[xv] “More women on boards means better climate policy, says BNEF.” December 2020. Bloomberg Green.

[xvi]As of September 30, 2021.

[xvii] “Gender Lens Investing in Numbers.” https://www.gendersmartinvesting.com/gender-lens-investing-in-numbers. Last accessed February 2022. Citing Parallelle, Veris Wealth Partners and P&I/Crain Investments research. Veris Wealth Report. “Bending the Arc of Finance for women and girls.” 2018: GLI AUM 2.4 billion in December 2018.