An Introduction to Gender Inequality
"The 2030 Agenda for Sustainable Development places gender equality and the empowerment of women and girls at the heart of its implementation with its promise to “leave no one behind”. It provides an unprecedented opportunity to transform the lives of women and girls and to catalyze progress towards sustainable development in all dimensions"
Equality is premised on equal treatment, opportunities, rights, and access. To address inequality, we must first recognize that within a society, certain groups experience discrimination for their gender, race, religion, etc., daily. Inequality prevents targeted groups from participating fully and freely in the world, stifling a society from utilizing the potential of all its members. Women have long been marginalized across the globe, and while some progress has been made with regard to legal rights and anti-discrimination policies, there is still a long way to go. Gender inequality can manifest implicitly through social norms and cognitive biases but also explicitly through policies and infrastructures. This integrated and systemic injustice disproportionately affects women across a wide range of social issues such as healthcare, finance, and education. Security and support in these areas are integral for the success and wellbeing of all society’s members, yet women find themselves battling to be adequately accounted for within these issues.
Gender and Healthcare
Healthcare is a fundamental human right where women experience many challenges. One of the biggest and most controversial issues facing women is over their reproductive rights. Women should have autonomy over their bodies and be able to choose whether or when to have children but countries across the world, including the U.S, have policies that restrict this agency. In the United States, reproductive rights have diminished further and further; since 2011, 500 laws have been passed restricting abortion access in various states. Furthermore, according to the CDC, over 19 million women in need live in contraceptive deserts in the U.S, and over 1 million women in need live in countries without access to a single health center that provides the full range of contraceptive methods. This creates a landscape where women do not have the power to make their own reproductive choices (through lack of contraception) and then denial of services to deal with unwanted pregnancies.
This particularly impacts women of low socioeconomic status and members of minority groups. Women of color often face medical racial discrimination resulting in lower use in long-acting reversible contraception (LARC) and are three times more likely to die from pregnancy-related complications than white women. The gender bias in medicine can be attributed to the decision-makers being predominantly male across time. This results in the oppression of women’s self-determination and the perpetuation of harmful but still accepted gender norms. One example is health-related gender-based violence: globally, 13 million adolescent girls have experienced rape, and more than 200 million girls in 30 countries across Africa, the Middle East, and Asia experienced female genital mutilation. FGM is an extremely life-threatening practice, and while there are no clear-cut health benefits, it is unfortunately still culturally accepted in some regions of the developing world. This practice is primarily motivated by religious or cultural beliefs about how women should be a part of society. Ensuring health in girls and women is essential to achieving empowerment, autonomy, and equality.
Gender and Education
Like all social issues, the challenges faced fostering gender equality in education varies depending on the region. In the developed world, we see girls discouraged from subjects such as math and science while boys are discouraged from reading and writing. In contrast, young girls struggle even to attend and complete their education in developing nations. In nations like the United States, expectations about how boys and girls perform and behave socially create educational environments where the children are pushed towards certain career pathways. Women are overrepresented in lower-paid industries and lower-paid positions. For example, more than 75% of public-school teachers in the United States are women. Young girls are exposed to such a small range of role models, limiting how young girls see the potential of their careers influencing their educational path leading up to their entry into the workforce. In the words of Marian Wright Edelman, “you can’t be what you can’t see”.
Furthermore, beliefs about the skillsets of girls influence the activities and opportunities encouraged inside and outside of the classroom. This issue continues to manifest through higher education, where women are overrepresented in 6 of the 10 lowest-paying college majors, while 9 of the 10 highest paying majors are dominated by men. In the developing world, the majority of the young girls find themselves not even finishing primary school with some cultural perceptions seeing little for them beyond tending to household responsibilities. Girls’ education is not valued, and in instances of financial restraints, families are more likely to spend money to educate boys than girls. This is one of the reasons why in regions like Sub-Saharan Africa, 1 in 4 girls of primary school age don’t attend school, and 92% of girls never complete secondary education. At the bare minimum, ensuring young girls complete their education is essential in empowering them and expanding the opportunities women have in deciding a future for themselves.
These are just a few examples of how women are still marginalized in many important areas of life. Addressing the issues above is at the core of creating an equal, fair, and safe society. They are supported across FLIT’s investment themes; Affordable Healthcare and Clean Water, to name a couple. The investment theme Gender Equality looks beyond the bare minimum of equality in the form of security and seeks to combat gender discrimination in the workplace. This considers equal representation, appropriate policies, and the gender pay gap.
Gender Representation in Leadership Positions
Across all industries and professions, there is severe gender disparity in representation within the workforce. Women are underrepresented in high-paid positions and overrepresented in low-paid positions. That translates into a real lack of women in leadership roles.
Since 2000, the percentage of women in senior and mid-level managerial positions globally has only increased by 3%, achieving a mere 28.2% in 2019. At the same time, women account for nearly 39% of the global labor force. At the C-Suite level, it is even direr; in 2020, women only represented 7.4% of the CEOs in Fortune 500 companies, and of this small portion, only 3 were women of color.
It is undeniable that the pandemic provided a clear opportunity to recognize the need for women in decision-making, yet it has exacerbated gender disparity. Globally, women make up 74% of medical doctors and nursing personnel and played a critical role in the COVID-19 response as frontline workers, caregivers, and more. At the same time, women remain underrepresented in critical leadership roles. By large, the stifled career progression of women can be attributed to problematic beliefs about women’s ability to fulfill high-level leadership roles. Historically, men have occupied the majority of the leadership positions, and thus leadership theories and qualities have been formed in their image. Such narrow-viewed opinions breed cultural beliefs that women either don’t have leadership characteristics or those female characteristics are not compatible with leadership roles at all.
Research suggests that it is quite in fact the opposite. Women adopt complementary leadership styles to men, and such gender diversity reaps considerable benefits for businesses. Examples include improved access to talent, enhanced decision-making, greater consumer insights, and strengthened employee engagement. Moreover, inadequate female representation in leadership positions works to perpetuate sexist practices that make the workplace a dangerous and oppressive environment for women- gender equality is essential for employee protection and company success.
The chart below, taken from a recent Mckinsey Institute report, clearly demonstrates the gender disparity in leadership. It displays the percentage of female candidates in the talent pipeline up the corporate ladder across various industries. The rate of women for each role decreases as we move from entry-level to more senior positions maintaining the gendered corporate hierarchy that attributes leadership qualities and success to men.
Gender Disparity in Promotion
Before even achieving leadership, women face barrier after barrier attempting to climb the career ladder: from early gender biases influencing education pathways to stereotypes about what is regarded as ‘suitable’ work for women. Gender bias puts severe limitations on the upward mobility of women in the workplace in the form of promotions and mentorship.
According to the Pew Research Centre, 10% of women in the workplace felt they had been passed over when delegating important assignments compared to 5% of men. It’s not just a feeling; the statistics back it up: for every 100 men getting promoted, 72 women are promoted. For women of color, the numbers are worse, with 68 for Latina women and 58 for Black women.
It is not that women are not qualified for the role nor lack ambition; in the U.S., nearly 60% of Bachelor’s and Master’s degrees are obtained by women. It is more the case that men receive greater mentorship and support to achieve their career ambitions. Women are less likely to have a sponsor who advocates and opens doors for them, in corporate America specifically, women are 24% less likely to receive advice from seniors compared to men. When women do have mentors, the feedback is often vague and pertains to their style, e.g., intonation or mannerisms, whereas men get skills-based feedback that actively helps to improve performance. There are significant benefits when women are mentored and supported to achieve promotions into leadership roles.
It seems it’s mainly women who act as mentors despite being a minority in executive positions; 38% of women compared to 26% of men at senior-level either mentor or sponsor at least one woman of color in their workplace. In the same breath, 62% of women of color say they believe a lack of mentorship is what holds them back. This illustrates the salience of having a diverse leadership body not simply for the financial return as outlined earlier but also to aid diversity efforts within the company.
Gender Pay Gap
The most commonly known form of gender inequality in the workplace is arguably the pay gap. In 2020, The Department of Labor recorded that women earned 82.3% of their male counterparts did that is, for the same role, workload, responsibility, and performance, women are paid less than men. This has improved since the rise in pay-gap reports, but inequity remains. The gender pay gap is widest for women of color and can be found in almost every profession. For some occupations such as physicians and surgeons, women collectively earn nearly $19 billion less than if they were paid the same as men in the same position. This inequality originates in systematic prejudice, which can be the toughest form to break. Resistance often sits with those who have to choose between paying women more or men less to close this gap.
However, there is a considerable economic benefit for narrowing the gender pay gap: McKinsey Global Institute suggests that $12 trillion could be added to global GDP by advancing the economic potential of women. The U.S alone could add up to $4.3 trillion in annual GDP in 2025 if gender equality is achieved. They outline three sources of this revenue: 40% from higher percentage female participation in the workforce, 30% from narrowing the gender pay gap in part-time and full-time workers, 30% from integrating women into typically male-heavy sectors or fields of innovation. The highest paying and growing industries right now are in science, technology, engineering, and math (STEM). Occupations in these fields earn two-thirds more than employees in other fields, and women only comprise 28% of this workforce. Ending gender inequality is not only a moral obligation but also financially advantageous.
The Motherhood Penalty
The trials of women in the workplace do not stop here. Policies oppress and disadvantage women in the workplace. The 2021 UN SDG Report recalled that more than 90% of countries in the 2020 data collection prohibit discrimination in employment on the basis of gender. Still, almost half continue to place restrictions on women for certain industries.
Policies can act to promote or prevent gender equality and can be direct like the restrictions on industries or indirectly such as “The Motherhood Penalty”. This term, coined by sociologist Arlie Hochschild refers to the general policies and trends in the workplace that significantly disadvantage mothers. Women who take a year off from work earn 39% less upon their return than women who do not.
This results in a pay gap between women and a workplace culture that suggests motherhood and careers exist as a dichotomy for women. Many face micro-aggressions due to unsupportive policies such as the parent-profession conflict. A Pew Research survey focused on parents with children under 18 found that 27% of mothers felt they were being treated as if they weren’t committed to their work compared to 20% of men.
Furthermore, in 41% of American households with children, women are the primary breadwinners, meaning they’re most likely to take time off at some point in their professional career; this is despite paid parental leave not being a federal law in the United States. Without the protection of national policy, women are subject to the discretion of employers and senior personnel who are primarily men. Without women to advocate for female employees’ needs, it is no surprise that the motherhood penalty still exists today.
Introduction to Solutions to Gender Inequality
What does the UN say will be necessary to combat gender inequality?
Ending all forms of harm and discrimination based on gender is a prerequisite to achieving any of the UN SDGs and creating a just world. Women should be able to participate wholly and effectively in society, but it is also essential to pursue a just and sustainable world. Much of the UN SDG framework places responsibility on governments and parliamentary decision-makers. Still, the private sector and individual action are vital in securing social and cultural development for equality. FLIT provides an opportunity for everyday citizens to make an impact by investing in gender equality across social and environmental issues. One of the most effective ways to initiate change is by investing in sustainable, socially responsible companies and actively trying to achieve gender equality. This could be in a vast range of sectors where women are disproportionately affected, such as access to healthcare, the impact of environmental disasters, and economic despair, which each have their respective FLIT investment themes. For 06 Gender Equality, FLIT concentrates on gender equality in the world of work through policy, representation, and equitable pay.
Gender equality is integrated throughout the SDG framework and even has its own goal. SDG 5 Gender Equality has nine targets that can be summarized in 3 core themes: prevention of gender-based violence reduced inequalities in access to services, increased participation, and empowerment of women. The UN proposes that these be addressed by reformation oppressive social structures, enhanced access to technology, and adopting rigorous policies to ensure long-lasting gender equality. Other sustainable development goals support the journey to gender parity like SDG 10 – Reduced Inequalities which focuses on representation in decision-making, freedom from discrimination, and equal opportunities.
While this goal considers a broad spectrum of characteristics pertaining to inequality such as age, disability, race, religion, all of the targets are also applied to gender. SDG 10 emphasizes the reforming policy, infrastructure, and social mechanisms that create and maintain inequality rather than the everyday experience of gender inequality that SDG 5 considers. It looks beyond simply protecting women from harm but actively promoting and empowering them in society. The UN reflects a multilateral approach to addressing gender equality in its integration of gender-based targets and the variety of partnerships that have been formed. This includes the Inter-Agency Network on Women and Gender Equality (IANWGE), UNICEF programs relating to FGM, child marriage and education, and the World Health Organization.
In the past 25 years, progress towards gender equality has been made through the reformation and generation of policies. Still, gaps remain. In all areas of life, whether at home, at work, or in politics, women are denied decision-making power. As of 2019, female representation in national parliaments internationally ranged from 0 – 61.3%, with an average of 24%. This is an increase since 2010 when the average was 19%. At the local level, women’s representation in elected deliberative bodies ranges from 1 to 50%, with an average of 26%.
In the past 25 years, progress towards gender equality has been made through the reformation and generation of policies. Still, gaps remain. In all areas of life, whether at home, at work, or in politics, women are denied decision-making power.
As of 2019, female representation in national parliaments internationally ranged from 0 – 61.3%, with an average of 24%. This is an increase since 2010 when the average was 19%. At the local level, women’s representation in elected deliberative bodies ranges from 1 to 50%, with an average of 26%.
It is clear that some countries are wildly succeeding while others are still excluding women to an extreme. Most progress made in recent years can be attributed to the adoption of gender quotas. In 2020, women held 27.4% of parliamentary seats in nations with gender legislation compared to 15.6% in nations without.
This impact can be seen across all levels of politics. Since the release of the 2030 agenda, many nations have implemented structural mechanisms to ensure the targets are achieved. This includes government and corporate development of policies, gender quotas, and representation mandates. Examples of this at the national level can be seen in Australia and the Philippines, at the local level in Bosnia & Herzegovina, Georgia, and Nepal. Other approaches have included improving the rigor of data collection for gender statistics such as Colombia, Cuba, and Norway. It is evident what needs to be done but addressing gender equality does not come without obstacles.
Despite such progress, implementing gender parity policies at the national level faces challenges. Gender inequality is based on prejudice and discrimination, which are social phenomena shaped by the media and held by society. The lack of adequate infrastructure enabling gender equality contributes to the minimal results those national policies yield. For example, a gender quota may be implemented across industries, but many women are caregivers, and if not also supported with affordable childcare, family caregivers, etc., then the workplace remains inaccessible and they will also not benefit from such quotas. There remains an opportunity to successfully implement SDG5 and other equality-related targets. This looks different at the local, national and global levels.
At the local level, the focus needs to be on improved delivery of services and spending in areas of greater gender parity. The emphasis resides in eliminating gender inequality at the national level through legal frameworks and policies alongside national gender equality mechanisms that ensure diverse and effective leadership. Governments must utilize and improve existing mechanisms to demonstrate progress towards gender parity at the global level. The collection and reporting of data at all levels provide opportunities to assess progress, identify regional trends and support peer learning. There remains a gap in the success of gender equality as far as accountability of intervention is concerned. Implementing targets relating to gender equality involves building schemes that track and measure progress monitoring the function. It is only then that actual progress can be made. Such examples include gender policies, participation monitoring, and pay gap reports.
Nielsen Holdings - Case Study
In Equileap’s recent gender equality assessment of the entire S&P 500, Neilsen Holdings scored well across multiple metrics. The data and market measurement firm ranked second for equal compensation, gender balance in leadership and workforce, and policies, among other metrics. Nielsen’s equality score came out at 70%, just 4% shy of the top company globally-Diageo. Not only is this score impressive, but they are leading from an industry where women are underrepresented as a whole.
Nielsen stood out in areas of transparency, representation in senior management, and workplace policies. In senior management positions, women have a majority representation of 51%, and the company has a female CFO. Additionally, Neilsen makes a public commitment to gender parity in pay, and they have numerous corporate policies that promote gender equality in the workplace. For example, they have a supplier diversity program targeting women-owned businesses. In addition to this, Neilsen’s training and development policy ensure equal access to career development irrespective of gender.
The company performed well in this review, but Nielsen still has room for improvement – female representation on the board of directors is below 40%. Based on their scores, it is expected to be achieved in the coming years. They stand as an example to others pursuing just, sustainable development – achievements in SDG 5 (Gender Equality) and SDG 10 (Reducing Inequalities) can be seen throughout the metrics. Nielsen Holdings is a company that has made changes to its organizational structure, allowing them to make decisions and strategically influence the operations and culture of the organization from senior positions (SDG 5/10). They promote a safe workspace space for women in their policies (SDG5) and have strong performance in addressing the gender pay gap (SDG 10).
FLIT Invest Gender Equality Portfolio
We can all see the universal applicability and importance of an issue like gender equality. Because of this, there are various companies among a diverse number of industries in FLIT’s investment portfolio. While there are many standards in achieving Gender Equality, such as the Women Empowerment Principles, SDGs 5 and 10, and other gender assessment indices/goals, the underlying objective, and methods to achieve this are similar across the board. While we’re not at a place of absolute gender equality, FLIT is here to help investors put their resources into the companies headed in the right direction.
There are many standards for achieving gender equality such as the Women Empowerment Principles, Sustainable Development Goals 5, Gender Equality, and 10, Reducing Inequalities, and other gender assessment indices. FLIT is here to help you invest your resources into companies pushing for Gender Equality and actually doing it.
The six main metrics used at FLIT to measure companies’ progress are as follows:
- Number of board seats held by women
- Women in senior management
- Women leaders (CEO/CFO)
Investment Rationale
The main disadvantage of discrimination from a business perspective is missing out on key talents. There is plenty of evidence that talent is not differentially distributed by gender, age, or geography. Diversity brings value also by bringing different experiences and perspectives together, leading to better decision-making. We firmly believe companies with equal representation at the board and management level, gender pay equity, transparency on gender diversity, and proactive gender goals and targets will overperform their peers. There is already strong evidence that diverse companies perform financially better, and we believe institutional investors will also increasingly favor companies who score better on gender equality targets.
The Benefits of Expert Curation on Gender Equality Investing
Our team at FLIT has researched hundreds of investment funds and companies, and we curated a portfolio that we believe embodies the gender equality theme in multiple sectors. Each company is screened for (i) representation of women at board and (ii) management level, (iii) hiring, promotion, and retention of women, (iv) gender pay equity (v) proactive gender goals and targets, and (vi) transparency about gender diversity data. We provide users with transparent data on each company regarding their sustainability practices to ensure an investment that aligns with their values.
Unfortunately, many funds are promoted as gender-equality-focused but only in their name. For example, the largest “Gender equality fund” only supported women 20% of the time they faced a vote. They also failed to support any of the pay-equity resolutions that came to a vote in their portfolio between 2016-2018. Using our selected metrics, we are confident that we are able to select the best-performing funds and companies whose intentions and actions are indeed in line with our values.
Your investments have the power to shape the future. Do you want a world that is fair for all? Do you believe more needs to happen in order to achieve gender equality? Do you feel like time is up for misogyny? If so, investing in Gender Equality might be right for you. Monumental progress is needed in achieve gender equality, and if companies will not change their practices or policies, then it is up to us investors to band together and vote with our dollars. We have the power to shape the future, we have the power to drive systemic change. Invest in Gender Equality with FLIT – sign up today and start investing for a better future.
Footnote 1: Content is for informational and educational purposes only. Any views, strategies or products discussed may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. The information contained herein should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing.
