Western Europe, despite being the best performing region with regard to gender equality, it has taken more than two decades to double female representation in national parliaments, to arrive at a level still below 40%. In the Middle East, where gender equality scores the lowest, in several countries women are still not allowed to participate in any decision-making body at all.
This shows that achieving greater gender equality is not easy, but also quite divergent. There is still a large segment of the population, particularly in developing countries, missing out from being seen, heard, and valued. This lack of inclusiveness has contributed to large differences not only in economic progress, but where there is open discrimination against women and girls, countries and societies are considerably vulnerable. Where gender equality has improved, on the other hand, wellbeing is improving to the benefit of the whole society.
There is an increasing awareness that gender equality is about more than equal opportunities for men and women to attain economic benefits, but that the needs and priorities of both women and men and the state of society are also at stake. And it is encouraging, that more governments, businesses, and investors are looking beyond economic benefits to integrate gender equality into their strategies, in line with the increasing demands and expectations of stakeholders and regulators.
Whether it be through the United Nations’ Sustainable Development Goals (SDGs), which explicitly target gender equality at different levels (SDG 5), or the recent wave of private money flown into sustainable investments, a new window of opportunity has opened for gender equality. There is still a lot of work to be done and we need to scale up such investments that contribute to improving gender equality in a way that society benefits most.
Bumpy road to gender equality
Although women account for almost half of the world population and gender inclusiveness matters in almost every area of development, progress in gender equality is slow across the globe. Inevitably, in developing countries, where girls and women lack access to education, finance, health and ownership of physical assets, progress is even slower.
The COVID-19 pandemic was a set-back to gender equality at many levels. Women were overrepresented in jobs where social distancing was more difficult and where layoffs were more common. Additionally, many women had to interrupt their work for care-taking reasons and children their education during the prolonged lockdowns. Girls are now finding it difficult to return to school, particularly in Sub-Saharan Africa, where teenage pregnancies have surged.
Getting back on track requires addressing the vulnerabilities revealed by the pandemic and finding the most effective ways in partnering to support and increase gender equality. It is about finding the right mix between targets and financing to do so. Currently, only 69 countries in the world have budgets that track gender spending. Companies are also preparing themselves and more transparency on gender inclusiveness is becoming part of their strategy.
Sustainable investing to strengthen the gender balance
The question is how to get the most out of investing in women. It will help if the sole focus is no longer mainly on pursuing short-term financial profits, but also on creating impact and change to improve the quality of life and the wellbeing of society. Over the past few years, it has become clear that such investments bring good returns in the long run, as their impact unlocks new value on the way to an inclusive society.
Improving gender equality, as mentioned, has different dimensions and many priorities are covered by the SDGs, especially SDG 5. A total of 193 countries have committed to reaching these goals. The UNCTAD World Investment Report estimated that achieving SDGs by 2030 will require USD 5-7 trillion of annual investments across different industries, which shows that there is a good market opportunity.
Investors committed to these goals can help inclusiveness by adopting gender equality standards and by engaging with companies to adopt these standards. Companies would then be selected and regularly monitored for governance structures that are more diverse, for having gender-neutral remuneration policies and inclusive career development incentives. Or policies that help the work-life balance, including childcare and gender sensitive approaches to living wages. Investors have the power to stimulate better practices in companies that are committed to improving these standards and in turn these companies can improve their own performance, while creating more opportunities for inclusiveness.
In developing countries, because standards and reporting are in the making, sustainable investors can create opportunities by investing in companies that provide products and services that promote gender equality. For instance, by investing in financial institutions that provide loans to women or digital services better suited to women’s needs that in turn increase the opportunities of women in the labour market. Or by investing in companies that provide basic services, including renewable energy, that improve the wellbeing of the community. And making sure that the SDGs set in these areas are progressing in such a way that they have a long-lasting impact.
The main challenge for impact investing is being there where the gender gaps are largest. Because doing nothing only increases risks and harms society as a whole. We need men and women around the world to take governments, investors and business by the hand to finally close the gap.
This column was originally published on Citywire Deutschland.
Also read Maritza's column 'Why gender equality should be a top priority in 2022'.