(Photo: Shutterstock)
Gender Lens Investing (GLI) was introduced about a decade ago based on the idea that investing in corporations that put an emphasis on closing the gender gap provided better financial returns and a lower risk profile for investors. GLI represented about $3.4 billion in assets as of 2019, compared with $100 million in 2014, according to an estimate by Veris Wealth Partners.
Initially focused primarily on investing in companies that had women in leadership positions, GLI has become a favorite tool of impact investors who are interested in the positive long-term effects of their investments.
Recommended For You
More than just putting women in leadership positions
According to a report by Glenmede, the concept is now evolving beyond just counting women in leadership positions at corporations to examining other benchmarks that signal a company's commitment to gender equality, including pay equity, anti-harassment policies, management training programs and parental leave.
During the past decade, studies have found that women have made gains in terms of holding corporate leadership positions. As of 2019, women make up nearly half of all board positions among S&P 500 companies, up from 17 percent in 2009, and every S&P 500 company now has at least one female board member.
As GLI evolves, the question becomes how many women need to be on a given board to influence decisions and potentially have a positive impact on returns. A Calvert Research and Management study found that U.S. large-cap companies that had at least four women on their board outperformed those with fewer than four women by a difference of 10 basis points.
Nevertheless, challenges remain to closing the gender gap in the corporate environment. Although women usually fare better than men from an employment perspective in typical recessions, women have been disproportionately affected by the COVID-19 pandemic because they are less likely than men to work in jobs that can be done remotely. Women accounted for 55 percent of jobs lost in April 2020 although they make up less than half of the workforce, the Glenmede report said.
In addition, workforce diversity programs may be taking a backseat to the more immediate crisis response happening at many organizations due to the pandemic, said Glenmede. This situation can be counterproductive to growth, as diversity and inclusion initiatives have been shown to boost company culture, employee satisfaction and overall performance even during recessions.
5 indicators on the radar of gender lens investors
Glenmede developed five dimensions that signal a company's commitment to providing an equitable environment for both women and men and are important to gender lens investors. They include:
1. Women in leadership positions. This is the traditional benchmark used in GLI because it is well documented and strongly tied to corporate performance. Diverse teams tend to lead to value creation and lower stock price volatility, and having more women at the upper echelons of corporate management tends to have a spillover effect by improving diversity throughout the company.
2. Access to benefits. Companies that support women's health issues – particularly in the realm of pregnancy and parental leave – create value in the form of employee retention and the resulting elimination of recruiting, hiring and training costs to replace women who feel squeezed out by unfriendly policies.
3. Pay equity. This is a key metric but one that suffers from inadequate data reporting. Evidence suggests women currently earn about 82 cents for every dollar men earn, equaling an annual compensation gap of about $10,000. Over the course of a career, women can expect to make half a million dollars less than men – even more for black and Hispanic women.
4. Supply chain diversity. Companies that encourage diversity in their procurement processes promote innovation and set themselves up to better take advantage of changing trends within demographics, providing an opportunity to benefit in terms of market share.
5. Talent and culture. Difficult to quantify but critical to fostering an inclusive work environment is creating a culture in which women can advance similarly to men. Although men and women enter the workforce in roughly equal numbers, men tend to outnumber women at the first level of management. This is not due to attrition, but rather to a lack of cultivation of junior female managers as well as lack of sexual harassment policies that protect women, said the report. About 38 percent of women who have experienced sexual harassment at work end up leaving their job early. Only about half of companies studied have formal anti-sexual harassment policies in place.
The report was based on representative data provided by Equileap, which captures 19 data points from 3,500 public companies worldwide.
Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM's Retirement Advisor magazine and LifeHealthPro online channel. She also was a reporter for Business Insurance magazine covering workers compensation topics. Kristen graduated from the University of Missouri with a degree in journalism.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
