EQUL Great idea to close the gender investment gap

Gender investing is a relatively new phenomenon on the broader environmental, social and governance (ESG) scene, but it is a credible avenue for investors looking to take a proactive role in terms of investing in the improvement of various social inequalities.

This task is made easier thanks to a new generation of exchange-traded funds, whose ETF IQ Engender Equality (EQUL). EQUL is relevant at a time when more and more investors are pressuring companies to prioritize gender equality and some companies are responding to these demands.

“Companies are instrumental in advancing women because they can provide a safe and fair workplace for all employees; investors have a key role to play in ensuring they do. There are three topical areas that are on the minds of investors these days: reproductive freedom, pay equity, and gender parity in senior management and boards,” noted Gwen Le Berre, Director of Responsible Investment at Parametric.

Supporting the long-term case for EQUL is the fact that public companies with above-average gender diversity in the C-suite outperform their less diverse rivals. In other words, there are tangible benefits for companies that prioritize gender diversity. Along the same lines, an easy way for companies to boost gender diversity is to ensure that they close and eliminate gender pay gaps. Investors are asking for the same.

“Six shareholder proposals requesting reports on race- and gender-based pay gaps were voted on in 2022, with average investor support of 38%, a big increase from the 24% average of the last year. In fact, two of these proposals received majority support, one from Disney and the other from Lowe’s. Demonstrating the effectiveness of active ownership, Microsoft immediately committed to disclosing its ratio pay equity when 40% of its shareholders voted for a pay equity proposal last fall,” added Le Berre.

EQUL is also relevant on this front as its underlying index is designed to focus on “empowering women through equal pay and gender balance in leadership and the workforce”, depending on the issuer.

Conclusion: Gender-focused investing has ample room for growth, indicating that EQUL is a relevant consideration for socially responsible investors looking for long-term additions to their portfolio.

“Investors can help encourage progress within the companies in which they invest. This can be done either by voting for proposals and engaging with management to prioritize gender equality, or by investing with managers who do this important work on their behalf, Le Berre concluded.

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Opinions and predictions expressed herein are solely those of Tom Lydon and may not materialize. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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