Gender Lens Is Emerging as a Fundamental ESG Screen
By Jennifer Coombs, College for Financial Planning and the Chartered SRI Counselor designation program
Contrary to the anticipation of some market skeptics, the popularity of the use of environmental, social, and governance (ESG) screens for investments has continued to surge over 2021. The use of ESG integration has been touted by many Wall Street firms as a useful method for identifying risk factors that would otherwise be overlooked by traditional investment analysis, as well as optimizing investment returns in times of economic uncertainty. However, in the absence of oversight from the Securities and Exchange Commission, as well as general international standards for identifying optimal ESG screens, investment firms are now faced with addressing accusations of “greenwashing” (giving the impression that an investment is sustainable but cannot provide information or proof that it is).
Those firms that recognize the reputational damage that can be attributed to greenwashing have sought to develop new screens for investments and provide details as to how these screens are implemented. The most challenging of these screens, and often the last to be addressed, are those in the social (S) category. Social issues are rather broad and are often difficult to quantify, yet there are some issues that are emerging as the front runners in strong social screens. One of the simplest, yet most profound of these screens is the “gender lens” for investment.
Based on emerging societal norms, it would make sense to put equality for women at the forefront of investing, however it goes much deeper than a societal nicety; organizations that prioritize the rights and equality of women make their own organization stronger in general. Those companies that rank higher from an ESG perspective for embracing the gender lens for investments also help to optimize the returns on their investments as well.
Read Jennifer's full article with a look at the Characteristics of the Gender Lens, how the Gender Gap is Slowly Improving, the Importance of the Gender Lens for Investment Performance, and how Financial Advisors Need to Keep Up - all here at - https://greenmoney.com/gender-lens-is-emerging-as-a-fundamental-esg-screen