Women in Finance Build Global Sustainability

Sustainable Finance

Sustainable Finance is the process of taking due account of environmental, social and governance (ESG) considerations when making investment decisions in the financial sector, leading to increased longer-term investments into sustainable economic activities and projects (European Commission).

The Global Program on Sustainability promotes the use of high quality-data and analysis on natural capital, ecosystem services and sustainability to better inform decisions made by governments, the private sector and financial institutions.

The GPS program consists of 3 key pillars:

Pillar 1: Information-improving global measurements of natural capital and ecosystem services

Pillar 2: Building countries capacity to produce and use natural capital accounting for policy and planning decisions. It currently works with 18 countries to measure and value natural resources

Pillar 3: Incentives- Promoting research on how environmental Factors impact risk and financial return in fixed income markets.

Women are economic powerhouses. They create, they control and they influence a huge amount of wealth. As consumers, the purchasing power of women is bigger than the GDP of China and India combined. As investors, women’s proportion of private wealth is growing, with this trend set to continue at speed.

At the same time, we know that women care about where their money is invested. We have overwhelming evidence that women are highly motivated to think about impact and non-financial returns in their investment and financial decisions.

Research surveys from across the world consistently report this finding. For example, research from Moxie Future found that 83% of women surveyed care about where their money is invested and 69% of women feel a sense of urgency to invest responsibly. This is where financial feminism takes hold and finds an exciting and powerful intersection with sustainable investing.

Gender Parity

Women and men begin in parity at the start of their careers in finance, but the C-suite is still largely dominated by men.

Monster reports: “If you’re a woman thinking of pursuing a finance career, there’s good news and bad news. The good news is you’re likely to make more money than in a traditionally female career; but, still only 76% of the amount your male associate will be making.

The bad news is, you’re unlikely to make as much as your male peers. “Even though there may not be equality, there are relatively high compensation levels for women in the financial services industry, as compared to totally women-dominated industries such as nursing or administrative services,” says Linda Bergen, former president of the American Woman’s Society of Certified Public Accountants.”

Women make up 53 percent of the entry-level banking workforce but less than one-third at the SVP and C-suite levels. Notably, nearly one in four employees at the entry level is a woman of color, though this falls to one in 20 at the C-suite level—on par with both the financial-services and cross-industry average.

Among Investment Bankers, 22.0% of them are women compared to 72.3% which are men.

As of 2021, there were 516 thousand full time male employees in the financial and insurance activities sector in the United Kingdom (UK), whereas there were 344 thousand female employees. Essentially, increasing female representation in the financial sector yields more stability for a bank, which in turn can mean better returns for both investors and employees.

Nonprofits such as Girls Who Invest offer programs to bring young females into the world of finance through internships and mentoring programs. Women can help deal with rising costs of living and inflation if they are financially literate. The summer intensive program through Girls Who Invest is phenomenal, especially in asset management.

Women tend to live longer than men, and thus they should have the knowledge to carry on their day-to-day affairs and manage finances. Women who are financially literate gain more confidence in their own decision-making.

Women in Finance operate under a guiding principle that we call Vision 30/40. It is the goal for women to occupy 30% of senior investment roles and executive committee positions by 2040.

Even with our efforts, and those of so many other organizations working towards gender equity, we still have quite a way to go for women to hold even close to the number of investment or executive roles in finance that men currently hold.

Unleashing the Power of Financial Feminism

CEOWORLD says: “Financial feminism is rapidly gathering momentum across the world, as we wake up to the ongoing challenges that many women continue to face when it comes to money and the very apparent lack of progress we are making. However, it is not just about women earning and investing on a par with men.

Rather, if we recognize how women are engaging with sustainable investing, financial feminism also represents the opportunity for women to use their financial power to build the kind of world that they want to live in. Sustainable investing is a lever of change and one that women across the globe are seeking to use as they become increasingly financially empowered.

For proponents, understanding these emerging investment needs of female investors is critical to moving capital at scale towards sustainable companies and assets. As women increasingly own more of the world’s private wealth, the potential for sustainable investing’s trajectory is massive.”

“What we need to do now is determine what action must be taken to support women on their sustainable investment journey.”