Women and Sustainable Investing: Driving Assets and Benefitting from a Gender-Lens Approach

The mission of US SIF is to rapidly shift investment practices towards sustainability, focusing on long-term investment and generation of positive social and environmental impacts. This includes the actions of institutional asset managers and asset owners as well as high net worth individuals and retail investors.

Women are Increasingly Driving Asset Growth

Women are and will continue to be critical to the ability to move forward investments in sustainability-focused products and strategies. According to a Morgan Stanley study, 84 percent of women expressed interest in sustainable investing, compared to 67 percent of men. Similarly, research from Moxie Future found that 83 percent of women investors care where their money is invested, 69 percent feel a sense of urgency to invest responsibly, and 63 percent are motivated to be responsible investors.

According to the most recent data from the US Department of Labor, 57 percent of women participate in the US labor market, compared to 34 percent in 1950. Thirty nine percent of all privately held firms are women-owned, including one in five with revenue of $1 million or more, the National Association of Women Business Owners indicates. A US Census Bureau study found that women are now the primary breadwinners in 23 percent of households, compared to 11 percent in 1960. US Trust research identified that globally, the income of women has surpassed $15 trillion, making it a growth market larger than China’s economy and second only to the US economy.

Women’s Advancement and Equality are Increasingly Considered in Investment Products

Additionally, in the last decade, the practice of gender lens investing has become one of the hottest thematic areas of impact investing.

In 1993, the Women’s Equity Mutual Fund, the first US fund investing in companies with positive track records of hiring, promoting and generously compensating women was created. According to Veris Wealth Partners, this heralded the birth of “gender lens investing” (GLI). GLI is founded on the premise that investing intentionally for gender balance and equity can generate both financial and social returns.

The US SIF Foundation tracked data on gender lens investing for the second time in its Report on US Sustainable, Responsible and Impact Investing Trends 2018. The report identified $868 billion in institutional investor assets under management that take gender lens issues under consideration, more than double the $397 billion identified in 2016.

Additionally, organizations like the Thirty Percent Coalition, which seeks to assure that women hold 30 percent of board seats across public companies in the United States, have been created to create a more equitable playing field.

The Work of US SIF Will Help Accelerate Women’s Involvement in Sustainable Investment

US SIF advocates for policies and practices that can help women move assets to more sustainable and impactful options. A key barrier to sustainable investment asset growth is the lack of investment options in 401Ks. In 2015, the US Department of Labor rescinded a 2008 bulletin that had discouraged investors from considering environmental and social factors in the companies and funds in which they invest, a move that US SIF had long advocated. Nonetheless, very few companies currently offer sustainable investment 401K options to their employees. Given the demand for these options, as highlighted by a Natixis study, we encourage companies to add such funds to their plans. We have been proponents of adding one or more sustainable investment options to the Federal Thrift Savings Plan, the retirement program for federal employees and members of the uniformed services. We help educate retail investors on how to access sustainable investment.

Financial advisors also play an important role in increasing women’s access to sustainable investment options, but there remains room for improvement. One estimate from the Center for Talent Innovation found that 67 percent of women feel misunderstood by their financial advisor. This may be partly because so few financial advisors are women – only 32 percent, according to the US Bureau of Labor Statistics. Moreover, a 2018 study commissioned by Eaton Vance found that while 79 percent of financial advisors surveyed say their clients have expressed interest in sustainable investing, only 31 percent say that sustainable investing is currently an important part of their practice. The US SIF Foundation produced a guide in 2018 to provide financial advisors with the resources and steps to enhance their sustainable investment expertise. We also offer a course for advisors, and in connection with the CFFP, a sustainable investment designation for advisors. Sustainable investment expertise can help financial advisors win over more female clients and deepen relationships with current clients.

One of US SIF’s initiatives is focused on bringing young people, representing diverse backgrounds, into the sustainable investment field. In its sixth year, the Peter DeSimone Student Scholarship Program supports students to attend our annual conference. From June 10-12, the program will welcome six undergraduate or graduate students to attend the US SIF 9th Annual Conference, New Challenges New Opportunities, in Minneapolis. The objectives of the scholarship program are to enhance students’ knowledge of sustainable and impact investment, motivate students to become practitioners upon graduation, and provide opportunities to learn directly from sustainable investment experts and to make new professional contacts. The conference offers a unique opportunity to network with leaders of the sustainable investing community and to learn about new approaches, trends and policy developments in sustainable and impact investing.

 

Article by Lisa Woll, CEO, US SIF: The Forum for Sustainable and Responsible Investment. As the CEO, Lisa leads US SIF and the US SIF Foundation’s overall direction and sits, ex-officio, on all board committees. She has been the CEO of US SIF and the US SIF Foundation since 2006, and has been responsible for strategic planning, developing a robust policy presence, expansion and diversification of funding, launching our national conference and creating the Center for Sustainable Investment Education.

Prior to US SIF, Lisa was executive director of the International Women’s Media Foundation, an organization focused on press freedom and expansion of women’s role in the media. During her tenure, the IWMF played a significant role in re-orienting the way journalism training was carried out on the issues of HIV-AIDS, malaria and TB in several African media organizations. Lisa also spent a decade working on children’s human rights. She was the director of the first international study to look at the impact of the Convention on the Rights of the Child and directed the Washington, DC office of Save the Children. She is a member of the Advisory Council of the Children’s Rights Division of Human Rights Watch.