DE&I round-up: CFA’s DE&I code attracts more than 100 signatories

Companies with more senior women have better overall gender representation; IFC subscribes $200 million to Itaú Unibanco's gender bond.

More than 100 financial firms in the US and Canada have signed up to the CFA Institute’s voluntary DE&I code. The code, which was issued in February 2022, aims to foster action to progress DE&I in the investment industry through six metrics-based principles: pipeline, talent acquisition, promotion and retention, leadership, influence, and measurement. The signatories, which include CalPERS, LGIM America and Morgan Stanley, collectively manage around $11 trillion. The CFA Institute has also started to work with the European investment industry to introduce a DE&I code across Europe.

Companies led by women have higher representation of women at all levels, according to Bloomberg’s annual Gender-Equality Index (GEI) report. It found that companies with female CEOs, or those with more than 30 percent female representation at board level, had an average of 27 percent women in executive roles within their company. By comparison, firms with less than 30 percent women on their board had only 20 percent female executives. The index covers 484 companies, which were scored against five key metrics: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. More than 600 companies participated in the gender reporting framework and disclosed their gender-related data, resulting in an 11 percent increase year-on-year.

International Finance Corporation (IFC) has subscribed $200 million to a gender bond issued by Itaú Unibanco to support the bank’s lending programme for women-owned SMEs in Brazil. This is the first gender bond issued by a private bank in Brazil in the form of Letras Financeiras, an exclusive debt security instrument for local financial institutions. IFC is acting as an anchor investor to encourage other investors to participate in the issuance. The proceeds of the gender bond will be used to support women-owned SMEs, which tend to face more challenges in accessing funding than men-owned businesses. According to data from the World Bank’s Global Findex Database and the World Economic Forum, while 4.6 percent of men-owned businesses in Brazil are able to borrow to start, operate or expand a business, only 2.9 percent of women-owned businesses can access finance for the same purposes.

The gender diversity of boards at Luxembourg funds and management companies has stagnated over the past two years, according to the Luxembourg fund governance survey. The number of female directors on boards has remained at 22 percent since 2020. Thirty nine percent of respondents said their boards are actively seeking to diversify their composition. Non-executive directors have slightly better gender diversity, with 24 percent of roles being held by women.