Opinion | Gender Equality: Towards Truly Gender-Equal Investment
Just as sustainable investment has been with climate change, taking gender-equal investment seriously could help reduce inequalities between men and women, argues Tatiana Jama. To achieve this, the same regulatory frameworks need to be put in place, starting with a social taxonomy.
“We know an extremely effective way to combat these inequalities, which is the promotion of economic equality, allowing women to access leadership positions and capital.” (Shutterstock)
Paris, 2015. We are on the verge of a historic global summit. Henriette de Castries, president of the French insurance leader, alerted by scientists’ revelations about the disastrous consequences of gender inequalities on the economy and social climate, takes the stage and speaks up: “A world with only 2% of women entrepreneurs is not insurable!” she declares firmly, before announcing the gradual exclusion of investment portfolios from companies whose boards are not gender-balanced.
Many will recognize here an event that actually took place, except for a few details: Henriette was Henri, and gender inequalities were climate change. This event, occurring in a context of rising concerns about climate issues, marks the historic moment when the financial sector pivoted. Moving away from neutrality, breaking free from Adam Smith’s invisible hand, he will gradually assert its responsibility towards its stakeholders in the transition to a more sustainable and, above all, carbon-light economy.
Taking Impact into Account
It is by addressing the climate issue that sustainable investment took off. Over the past decade, this niche practice has grown to such an extent that it now challenges the “business as usual” approach worldwide. In addition to the traditional risk/return duo, sustainable investment proposes to substitute a risk/return/impact trio, with a voluntary, additional, and measurable vision of impact. In doing so, it positions climate as the pioneering issue of environmental impact investment, and the environmental aspect as the driver of the ESG triptych.
So why climate? Three reasons: the issue is recognized by scientists as an absolute urgency. It is universal. It comes with a unit of measurement, a tonne of carbon. In the wake of climate change, other environmental issues have emerged since, such as biodiversity protection or combating deforestation. But all struggle to deploy on the same scale, mainly due to the difficulty of finding effective measurement units.
Sustainable investment is currently heavily dominated by environmental themes, especially climate. Yet the major challenges we face are also social issues. While these seem to be well taken into account in a “risk” vision of investment, i.e., in analyses seeking to identify and limit risks, they occupy only a very limited place in the “opportunity” approach, namely the search for solutions that are both profitable and beneficial to society. There are very few thematic sustainable funds dedicated to social issues. Among the reasons cited? The difficulty in finding measures, or the lack of profitability of solutions.
Promotion of Economic Equality
Among social issues, there is one that equals climate in terms of potential. This is gender equality. Indeed, reducing gender inequalities is recognized as an urgent and priority battle. The issue is universal. It comes with a measure unit understood by all, the gender ratio. Finally, we know an extremely effective way to combat these inequalities, which is the promotion of economic equality, allowing women to access leadership positions and capital.
The battle for economic equality could be the theme that scales up social impact investment, just as the fight against climate change has boosted environmental impact investment. However, we need to provide the means for this to happen. To do this, the same regulatory frameworks need to be put in place, starting with a social taxonomy. We need to allocate the same levels of public funding, nationally, within Europe, and internationally. Finally, investors need to demonstrate the same level of ambition for gender-conscious investment as they do for climate, in order to finance and grow companies created or led by gender-balanced teams.
France has been a pioneer in establishing a framework favoring gender equality with the Copé-Zimmerman and Rixain laws. It is a pioneer in gender-equal investment with the creation of the first European fund in this field, the SistaFund. Let us build on this capacity for innovation and give ourselves the means to become real pioneers in gender-equal investment as we have been in climate investment.
Tatiana Jama is an entrepreneur and co-founder of the Sistafund investment fund.
