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The Seeds of Change: How Companies are Moving the Needle on Gender Equality

by Karen Christensen

Bank of America and Walmart are just two of a growing number of companies taking decisive steps towards eradicating gender inequality.

The Seeds of Change

IMAGINE A WORLD WHERE EVERY LEADER in every organization takes concrete steps to address the issue of gender inequality. That’s the world that Sarah Kaplan, founding director of the Institute for Gender and the Economy at the Rotman School of Management, is working towards with her team. 

When asked what it will take to fix the current situation — in which only 22 per cent of senior executives are female (many fewer are CEOs) and only six to seven per cent of venture capital funding goes to woman-owned businesses — Prof. Kaplan has a one-word answer: innovation. It will be next to impossible, she says, to make any further progress if we continue to do the same old things within the same old system. “We need to approach diversity — of all kinds, not just gender diversity — as an innovation problem,” she says, “and make this challenge as exciting as every other innovation challenge out there.”

The good news is that many organizations have taken this challenge to heart. In this article we highlight two of them, showing that, once we admit that biases are built into our systems for hiring, evaluating and investing, we can find ways to change the system itself.

Gender Lens Investing

In an increasingly complex world, the definition of ‘investing with a gender lens’ is deceptively simple: The deliberate integration of gender analysis into investment analysis and decision-making. By asking deeper questions about inclusiveness in the enterprises in which they invest, gender lens investors believe they will get better outcomes — both financial and societal.

According to Bank of America executive Jackie Vander-Brug — who pioneered the approach — two trends have converged to accelerate broad acceptance of gender-lens investing. “First, investors — even mainstream institutional investors — are taking sustainable and responsible investing (SRI) much more seriously,” she says. “The 2015 publication of the Black-Rock-Ceres guide to incorporating environmental, social and governance (ESG) considerations into corporate interactions for institutional investors was a notable milestone, pairing the expertise of the largest money management firm in the world and the oldest shareholder engagement advocacy group.”


Financial services have not traditionally been marketed well to women.Tweet this


Secondly, a new type of investor has emerged in recent years: The impact investor, who considers the social impact of their investment alongside the calculation of risk and return. “The convergence of these two trends is driving innovation in investment strategy and capital markets, and as the shift accelerates over the next decade, the use of gender factors will grow with it,” says VanderBrug.

A gender lens might seem like an obvious tool for an impact investor, but many early social impact finance pioneers didn’t see it that way. As far as they were concerned, their focus on things like poverty and education already supported women. 

“Back in 2008, I was working with a team at the Criterion Institute to better understand the link between female philanthropists and impact investors” she explains. “At the time, we felt that the philanthropic world and the world of impact investing were very separate — but that bridging them could create great value.”

The problem VanderBrug et al. wanted to solve was this: How could they get female philanthropists to bring their expertise and interests to the emerging impact investing space? She and her colleagues started talking to these philanthropists about the idea, and right away they asked a question that the team couldn’t answer: ‘What will the impact of these investments be on women and girls?’

“Our inability to provide a clear answer led us to focus on mapping-out an entirely new sub-field in financial services,” she says. When VanderBrug and her team started talking to early impact investors and traditional investors, virtually all of them said the same thing: ‘You can’t do this. You don’t have any data’; or ‘If you do this, you will lose money — and even if you don’t lose money, it won’t make a difference’. “Suffice to say, there was not a lot of momentum behind our efforts”, she says. The team recognized that, to define ‘gender-lens investing’ as a new field, they needed to get some academic rigour behind them. “So, we started working with [Rotman School Professor] Sarah Kaplan to get the ball rolling.” One of the first articles the duo wrote was for the Stanford Social Innovation Review [“The Rise of Gender Capitalism,” available online] — and it helped to define this emerging field. However, even after that, things didn’t improve.

“As soon as we said the words ‘gender lens’, investors believed that we were taking half of the population off the table, and that this approach was therefore limiting.” She and her team argued that a gender lens allows investors to see the realities and the needs of women and men, and that this would make them better investors. “Our job was to shift the view of a gender lens away from being limiting to being something that helps you see new opportunities.”

VanderBrug notes that there are many different types of lenses that help to improve peoples’ vision, and likewise, there are different ways to approach gender-lens investing. “In our work, we focus on three approaches: improving access to capital; promoting equity along the entire value chain; and creating products and services that drive gender equality.” In her experience, financial services have not traditionally worked very well for women — or been marketed well to them. For one thing, in her research over the past decade, she has found that women are disproportionately interested in the impact of their investments. “One-third of female investors say they want to make investments that have both financial returns and positive social environmental impact.” And yet surprisingly, many of these women have yet to act on this interest. “This aspirational gap presents significant opportunities,” notes Vander-Brug. “Women tell us that they want to focus on issues that they feel strongly about. It might be supporting female entrepreneurs, education for women globally, or something to do with the environment. Some proactively avoid or embrace certain types of companies — for instance, those who don’t have any women on their board — or invest in companies who excel in certain areas.”

Men also feel strongly about a wide range of issues, says VanderBrug, but they are more likely to say, ‘There are plenty of other opportunities with lower risk.’ To be clear, women are not not interested in the performance of their investments, she says; they just don’t want that to be separated from their impact on the world. “The fact is, women’s areas of interest present huge opportunities, given what is happening more broadly with the transition to a more sustainable economy.”

According to VanderBrug, behavioural insights will play a key role in optimizing gender-lens investing going forward. “Part of moving gender-lens investing forward involves asking, ‘Which ‘behavioural levers’ can be used to enable women to feel more confident investing their money?’ 

Gender lens investors are not part of some ‘secret society’, notes VanderBrug. “They are everyone from pension fund managers to economic development banking professionals to foundation executives. They also include lenders, angels and friends with a chequing account.”

Influencing Global Supply Chains

Kathleen McLaughlin is another leader who is innovating to improve gender equality. In her position as Chief Sustainability Officer at Walmart, she works with business teams and the Walmart Foundation to enhance the sustainability of global supply chains in food, apparel and general merchandise; to help create economic opportunity for individuals and foster economic growth; and to strengthen the resilience and cohesion of local communities.

“Looking ahead, our biggest opportunity is to draw on our unique capabilities — in collaboration with suppliers and other partners — to create systemic change across the supply chain, including how a wide variety of products are grown and made, how they are transported and sold, and how we touch the lives of people along the way,” she says. The goal is to ensure that Walmart brings safe, affordable products to people in a way that is sustainable for the planet and the people all along the product supply chain.

McLaughlin and her team go about this in two principle ways. First, by working with the Sustainability Index, a science-based, third-party tool that was developed in collaboration with universities, civil society and suppliers. “The Index provides visibility into the social and environmental practices and outcomes for a large number of supply chains.” And second, through special projects. “In both cases, we collaborate with suppliers, NGOs, customers, governments and multilaterals to drive change.” Walmart uses the Index with its suppliers in over 125 categories ranging from socks to salmon. Last year, in these categories, over 70 per cent of its product assortment came from suppliers who participate in the Index.

In addition to working to help improve the sustainability of individual products, empowering women is another priority for Walmart — not just because it’s the right thing to do, but “because it will make our business and our world stronger. The majority of our 245 million customers are women, and they control an estimated $20 trillion of annual consumer spending globally. In our experience, when you lift women up, you lift up families and entire communities and economies.”

About eight years ago, McLaughlin’s predecessor Sylvia Mathews Burwell launched the Global Women’s Economic Empowerment Initiative (WEE), which McLaughlin happily inherited. “The core idea is that as the world’s largest retailer, a Walmart purchase order is an unbelievable source of development capital.”

One aspect of WEE involves sourcing products from women-owned businesses. The Women’s Business Enterprise National Council (WBENC) defines a woman-owned business as ‘a business that is at least 51 per cent owned and operated by a woman’. The Walmart team set out to source an incremental $20 billion worth of goods from businesses owned by women in the U.S., and to double its sourcing from women-owned businesses in other markets.

Walmart has a number of mechanisms designed to attract women to become our suppliers. “We do ‘open calls’, where we ask people to come and pitch their product. Working with WBENC and WeConnect International, organizations that certify women’s businesses, we have found many woman-owned companies to join forces with. One woman who started out selling tortillas on a street corner in Atlanta now sells her products at Walmart; and there is a woman-owned business that makes popsicles who is now one of our largest suppliers.”

The second aspect of WEE involves providing training for women to help elevate their livelihoods. A few years back, Walmart committed to training one million women — 800,000 in emerging markets and 200,000 lower-income women in the U.S. — to help them secure better jobs. In emerging markets, the program included 131,000 women in factories in China, India, Bangladesh, Central America and South America.

“We worked with different partners in different countries, including BSR (Business for Social Responsibility) and World Vision. In the agriculture realm, we did a different kind of training, working with women around productivity and yield sustainability. For this, our partners included Mercy Corp, Technoserve’s One Acre Fund and the Gates Foundation.” 

The retail-focused training was split between the U.S. and emerging markets, and its goal was simple: To help women get their first job in organized retail. “In Kenya, we worked with Samasource and women in villages, literally teaching them to code product descriptions for the Internet. These employees can work from home and participate in global e-commerce retail. For others, the program might have helped them get a job at their local bodega.”

Along the way, McLaughlin and her team have learned a few key lessons. “Obviously, the first challenge was getting our own leadership to agree to our sourcing commitments. To do that, you need to gather the results around innovation, perception of the customer and higher growth rates. We ended up having higher margins in many of these categories, primarily because the women-owned businesses tended to produce more innovative and interesting products.”

Second, as indicated, they did lots of partnering with different groups to bring the initiative to life. “In China, it took us several years just to figure out which businesses were women-owned because there is no simple directory where you can look at ownership structure and leadership and so on. We had to build that fact-base from the ground-up by meeting people and companies.”

Third, every market is different. “Ironically, Canada, was one of the hardest markets to get going because its legal framework is such that you don’t really ask, ‘Is this a woman-led business or not?’ Canada is really trying to be ‘gender blind’, whereas in the U.S., that is readily available information.”

Fourth, you need to put in place lots of new infrastructure just to manage such a program and the behavioural changes required among your own people to get them to look at yet another score card and set of indicators. “We put this into people’s performance reviews, because you’ve got to take steps to drive behaviour
around these issues.”

In closing

For Bank of America, Walmart and a growing number of others, efforts to address gender inequality are just part of doing business in the 21st century. “Our customers, associates, suppliers, NGO partners and other stakeholders now trust — and expect — us to do the right thing,” says McLaughlin. “We are living proof that there is no conflict between being responsible and being successful.”

The fact is, every organization needs to start treating gender equality as the business priority that it is. Until they do, meaningful progress will remain out of reach. McKinsey & Company’s most recent “Women in the Workplace” report (available online) makes two things clear: one, that women remain sorely underrepresented at the top of organizations — particularly women of colour; and two, that companies need to change the way they hire and promote entry and manager-level employees in order to make real progress.

For anyone who doubts it, the McKinsey report confirms that closing the corporate gender gap can no longer be a side issue: It is an economic necessity. Programs and policies designed to reduce bias and ensure fairness don’t just benefit women. They benefit everyone. As indicated in the report, “in the best workplaces, the most talented people can rise, no matter who they are. That should be the expectation for every workplace, everywhere.” 


Jackie VanderBrug is a Managing Director and Investment Strategist at U.S. Trust, Bank of America Private Wealth Management within the Global Wealth & Investment Management division of Bank of America. Kathleen McLaughlin is Senior Vice President and Chief Sustainability Officer at Walmart and President of the Walmart Foundation. This article is based on their presentations at the Behavioural Approaches to Diversity Conference, held at the Rotman School of Management last fall.

This article appeared in the Spring 2019 issue. Published by the University of Toronto’s Rotman School of Management, Rotman Management explores themes of interest to leaders, innovators and entrepreneurs.

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