Gender Equity Investing

Takeaways from Equileap’s 2021 Report: Gender Equity Progress and Challenges


COVID-19 brought unequal impacts to women and intensified already widening inequities. The pandemic drove acute job losses in lower-paying service roles, which are largely staffed by women. Women in all industries and levels also disproportionately downshifted their careers to take on increased caregiving burdens as schools and daycares closed.

Against this backdrop, Equileap, a leader in corporate gender equity research, issued its fourth annual Gender Equality Global Report and Ranking in March 2021. Utilizing publicly available data and policy information to assign gender equality scores, the report summarizes key findings and 2020 gender lens metrics by country and sector.

Research drew from a dataset of 3,702 public companies with more than $2 billion in market capital in 23 developed countries; the report assessed both the disclosure of information as well as the metrics themselves. The end result is the Equileap Gender Scorecard, which is derived from 19 metrics covering five core pillars: gender balance in leadership and workforce; equal compensation and work-life balance; policies promoting gender equality; commitment, transparency and accountability; and “gender controversies,” including incidents of sexual harassment and gender discrimination.

The report also includes a list of the top 100 companies for 2020. For investors, the Equileap rankings and top 100 list are incorporated into a range of equity indexes utilized by a number of publicly available gender lens equity funds and exchange-traded funds.

Key Improvements and Stubborn Gaps

According to Equileap CEO Diana van Maasdijk, overall gender equity scores have improved for the fourth year in a row. Yet the top score of 74% indicates persistent gaps. “The corporate sector is still scoring too low in terms of gender balance at all employment levels,” she said. “Scores are also particularly low for pay gaps and disclosures.”

Progress continues to crawl. Although the average top-100 score improved from 62% to 64%, the cutoff for the top 100 list shifted from 57% to 61%. The average marks of the top five scorers declined. Corporate gender balance remains low, too: women represented 25% of boards, 17% of executives, 24% of senior management, and 37% of the workforce. Only 15% have achieved gender balance at the board level, and just 7% note gender balance at the executive level. Still, altogether 10 companies demonstrated gender parity at all levels compared with just one company the previous year.

Pay gap reporting is particularly low—85% of companies do not share any data. Only 15 companies have closed their gender pay gaps. Paid leave for primary and secondary caregivers lags, although benefits for fathers are increasing. Where there is no state-sponsored leave, companies are more likely to disclose their own policies. Only 38% have a published policy on flexible work, and just 24% of those have a regular policy unrelated to the COVID-19 pandemic. Half of all companies do not publish anti-sexual harassment policies.

Smaller countries can have a big impact on global gender equity through their policies.

Assessing Countries through a Gender Lens: Policy Matters

The research found country scores ranging from 27% to 51%, which suggests that legislation and best practices have a key influence. As Van Maasdijk states, “Countries where policies are in place are seeing better metrics.”

She also emphasizes that smaller countries can have a big impact on global gender equity through their policies, citing Spain as an example. Legislation passed in 2019 requires Spanish companies to undertake a gender audit and establish a gender equality plan. As a result, Equileap’s average score for Spanish companies went from 43% in 2019 to 49% in 2020.

Spain came in second on the list overall. The highest scorer for 2020, France now requires companies to monitor gender. These were followed by Sweden, the United Kingdom, and Italy. Australia had the most top-100 companies, with 22 represented. In the largest representation of any country, the United States had more than 1,400 companies in the dataset but only 13 in the top 100. Similarly, Japan has 496 companies in the dataset but none in the top 100.

France is the only country with board parity. The country posted dominant scores on women in the workforce and leadership, followed by Italy and Sweden. Singapore registered strength at the executive and lower levels but received poor results at the board level. Based on workforce and leadership results, the promotion of women is weakest in Switzerland. Japan scores very low at all levels.

Gender Equity by Sector: Financials and Technology Lag

Sector rankings did not change significantly in 2020, and none registered significant levels of parity or balance. Utilities did better, scoring the highest with a global average of 39%. This was followed by consumer staples and consumer discretionary.

The largest sector in the top 100 is financial services, and there the report turned in disparate results. A minority of financial firms publish pay gap data, and most do not publish any anti-sexual harassment policy. Despite a low sector score, a handful of financial firms including Norway’s DNB have high scores in the top global position.

Technology had the lowest sector score at 31%. Only four companies made the top 100, and women had low representation in senior management. Many new roles created to address the gap are low level; the sector is also characterized by a nondiverse culture and a high incidence of sexual harassment. Only 9% of technology companies publish any pay gap data.

Facing Challenges and Opportunities Ahead

Gender lens equity investing is rooted in a substantive body of research showing a connection between higher levels of women in leadership (WIL) and better performance on a range of metrics. In applying an annual gender lens to corporate progress, Van Maasdijk believes one possible reason for the slow pace of change is that the business case for higher WIL levels is not fully understood by global business leaders.

She also points to lopsided parental leave policies and norms, which hinder many men’s access to benefits and leave much of the caregiving on women’s shoulders. In her view, hiring discrimination also plays a persisting role. “In the end, people are hiring those who look like them,” she said.

Looking ahead, Van Maasdijk says that Equileap will expand its leading gender research into smaller companies and emerging markets. She expects several dynamics to drive continued progress, including the potential for a growing number of policy responses to boost corporate gender equity. Nasdaq recently announced that listed companies will need to comply with board diversity targets. Board quotas are strengthened in Germany and the Netherlands as disclosures of gender metrics are being bolstered in Spain, France, and Canada. New EU sustainability reporting requirements should also drive increased transparency on gender.

An even stronger factor is growing corporate interest in scoring higher on gender metrics. Van Maasdijk reveals that Equileap receives calls from many companies every year asking how they can achieve better equality. She believes that publishing the top 100 and other Equileap rankings encourages companies to do better.

“Transparency moves the needle on change,” she said.


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