International Women’s Day: A round-up of investment developments

Denmark’s academic pension fund PBU is to increase its active ownership on women’s rights and equal pay as part of plans to up its focus on the ‘S’ in ESG over the coming years. The plans, published in its annual report on social responsibility, also outlined an increased focus on responsible taxation, children’s rights and workers’ rights. According to the report, the fund will fight gender specific discrimination in workplaces, support women in leadership roles, and promote better hiring conditions.

Nordea Asset Management launched a fund called Nordea 1 – Global Gender Diversity Fund. Managed by Julie Bech and Audhild Asheim Aabø, it has a universe of approximately 1,700 companies which is then further screened down to about 350 stocks, which are then assigned a Gender Diversity Score. This leaves a portfolio of 80 to 100 “compellingly-valued stocks at the forefront of gender diversity”.

Bank of America and Wells Fargo shareholders will be able to vote for the companies to disclose their median gender pay gap, after the Securities and Exchange Commission (SEC) rejected attempts to keep the resolution off voting ballots, according to SRI firm Arjuna Capital. The firms had tried to argue that disclosing the median pay gap between men and women amounted to micromanagement by investors, and therefore could fall under the SEC’s guidelines for exclusion.

Equileap, the workplace equality group, has announced the launch of the AVA Gender Equality Tracker by Avanza based on the Equileap European Gender Equality 75 Index. “This provides Swedish investors with an opportunity to make a difference,” it said. “These investors can now align their portfolio with their values while gender-lens investment is becoming mainstream around the world.” The AVA Gender Equality Tracker will be listed on the Stockholm Stock Exchange today (March 8). Equileap is headed by CEO, Diana van Maasdijk, the former Head of Philanthropy Advice at ABN–AMRO Private Banking. It is chaired by Swedish business figure Karin Forseke.

One in five central banks has no women in senior positions, according to the Gender Balance Index 2019 report from the Official Monetary and Financial Institutions Forum (OMFIF). Of the 173 central banks globally, only 14 are headed by women. The index tracks the presence of men and women among senior staff of central banks, sovereign funds and public pension funds, weighted by level of seniority. Showing that just eight sovereign funds are headed up by women, the report also claims that poor diversity in many sovereign and public pension funds could be hampering ESG investment “as it lowers their credibility to enact ESG mandates”.

Gender balanced private equity and venture capital funds perform better than male- or female-dominated funds, a new study by the World Bank Group’s International Finance Corp has reportedly said, realising an excess net internal rate of return of 1.7 percentage points greater. According to the research, enhanced investment decision making and deal sourcing are likely among the drivers of this performance edge. The study also found that 65% of endowments, pension funds and other limited partners see gender diversity of a firm’s investment team as important when allocating money, but only 25% of them enquire about the subject during due diligence.Calvert Research & Management, the SRI firm that is an affiliate of Eaton Vance, has released a paper prepared by Senior ESG Analyst Erica Lasdon on the economic power of women, and how greater inclusion in the workplace translates into substantial financial benefits for businesses. It’s called ‘Of butterflies and boardrooms: Capturing the economic power of women’.

Improved gender diversity does not need to come at the expense of men, according to AXA Investment Managers fund manager Anne Tolmunen, who has said investors have a role to explain that “female-friendly” policies have benefits for everyone. Tolmunen said research shows that policies aimed at ensuring equal access to opportunities – such as flexible working hours, paid parental leave – are valued among millennials, and that workplaces with better gender balance and more women in leadership roles have increased staff engagement and retention, risk-adjusted financial performance and innovation. She said: “Improving diversity is not a zero-sum game. Diversity initiatives have to be about expanding the pie for everyone.”

The World Federation of Exchanges, the global industry group, said its member exchanges are taking part in the fifth annual ‘Ring the Bell for Gender Equality’ initiative. It’s a collaboration across 80 exchanges (up from 65 in 2018) to ring opening or closing bells to celebrate IWD.

BMO Global Asset Management said it had 224 engagements on board diversity globally in 2018. It added that it also opposed the re-election of 45 Nomination Committee chairs in the UK due to insufficient female representation on the board. It said it would expand its focus on the topic of gender diversity to include top executive and senior management teams. “An insufficient pipeline of qualified women with C-suite experience is a significant contributing factor to the lack of gender diversity at Board level,” the Canadian firm said.

State Street’s Fearless Girl campaign went to the London Stock Exchange this week with a new bronze statue of the defiant girl installed in Paternoster Square as a reminder of the importance of women in business. The original Fearless Girl statue was installed standing up to Wall Street’s bull in 2017 to much social media fanfare and press scepticism, and has since made appearances at conferences globally. State Street says, since the campaign launch, 445 companies of the 1,265 identified by State Street Global Advisors have either added a female director or committed to do so.