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International Women’s Day 2022 Challenge and Opportunity

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key points
  • Gender equality is vital for effective climate action and addressing the impacts of climate change, as women are disproportionately affected and can play a significant role in finding solutions.

  • Embracing diversity, including gender diversity, leads to better decision-making and performance, particularly in ESG-related matters, resulting in stronger corporate outcomes and improved stakeholder engagement.

  • Women are increasingly influential in ESG investing, prioritizing environmental and social considerations in their financial decisions, presenting opportunities for financial institutions to cater to this growing market and align with women's preferences.

“When it is a male world, you have male priorities … If you don’t have women here, how can you say this is about people?” – Mary Robinson, Former UN High Commissioner for Human Rights and President of Ireland at COP21.

The article highlights the importance of gender equality in the context of climate action, decision-making, and ESG investing. It emphasizes the role of women as change-makers, the benefits of diversity in driving better outcomes, and the increasing influence of women in shaping ESG investment trends.

Today is International Women’s Day (IWD), and this year’s theme #BreakTheBias calls for a world free of bias, stereotypes and discrimination where women can move ahead. IWD recognises that action is needed to create a world that is gender equal and challenges us all to play a part in helping create a more diverse and inclusive future.

Gender equality is one of many ESG factors that has recently attracted increased attention from lawmakers and investors. We should all be familiar with this important concept in other contexts. Below are three reasons nCino believes gender equality is an important part of the ESG paradigm and its benefits.

Women are the most likely change-makers for climate action

Women bear a sizable burden of the climate crisis, largely because of gender inequalities. In many parts of the world, women hold traditional roles as the primary caregivers in families and communities. As the main providers of food and fuel, women are more vulnerable when flooding and drought occur; the U.N. estimates 80% of those who have been displaced by climate change are women. Given their position on the front line of the climate-change battle, women are in a position to be agents of change—to help find ways to mitigate the causes of global warming and to adapt to its impacts on the ground. This has been recognised by the Paris Agreement, which specifically includes the global need to further empower women in climate decision-making. Climate action cannot be successful or sustainable if it does not involve women.

Diverse perspectives equal a diverse range of solutions

“Better decisions are made when women and men come together at the table to create a ‘larger horizon.” – Christine Lagarde, President of the European Central Bank

Diversity covers a range of factors which shape our identity, such as race, age, gender, sexual orientation, religion, cultural background and national origin. Gender is one of the most visible types of diversity and we have seen the promotion of gender equality for some time among politicians, regulators, corporate boards and entrepreneurs. There is growing evidence that better decision-making, including on ESG-related matters, generates better corporate returns and performance. A recent research paper published by the IFC Corporate Governance Group supports this by showing a correlation between gender diversity in leadership functions and higher ESG standards. This research reveals that companies with higher ESG standards perform better on a critical set of metrics, including stronger internal controls and oversight, reduced risk of fraud and ethical violation, greater stakeholder engagement and positive impact on brand and reputation. With the increase in regulatory and investor attention to ESG issues, it is important to emphasise this connection between leadership, diversity and ESG performance.

Women are ESG-led investors

Women are known to upweight environmental and social good in their financial decisions. They historically align their investments with what they feel will benefit their community, neighbours and the planet. Unsurprisingly, studies show that women value the principles behind ESG investing. A recent RBC Wealth Management survey found female clients are more likely to prioritise ESG when considering what companies or funds to invest in, while male clients typically favour more one-dimensional measures of financial performance. Women now control 32% of the world’s wealth and are adding $5 trillion to wealth globally every year (UBS, 2021). Men are also realizing the merit and opportunity around ESG investing and long may that continue.

ESG investing is poised for massive growth. These figures will only increase as women continue to drive ESG investing while gaining financial wealth and independence. McKinsey reports that working towards advancing gender equality could add $13 trillion to global GDP in the next 10 years. Financial institutions should take note of this powerful group of decision-makers.

While more than a fifth of major institutions have pledged to reach net-zero emissions by 2050, few actively include or consider gender equity in their climate action decisions and plans. According to estimates, £100 trillion of investment in the energy transition is needed globally by 2050 to limit the rise in global temperatures to 1.5 degrees C. The institutions that are most likely to meet their net-zero targets will be the ones that demonstrate true diversity in their leadership. If ESG is to be prioritised, companies need to commit to gender equality. Women are the future change-makers in ESG, not only because of the challenges they face, but because the research is clear – women are becoming richer and controlling more of the world’s wealth. Women are now significant wealth creators and arguably an emerging investor class.

On this International Women’s Day, we reflect that we have come a long way on gender equality, but so much more needs to be done. While we continue to call out and break the bias, we can also leverage the power we do have – soft power, hard power – to make the change we wish to see in the world. nCino is up for the fight. We’re in this together.

To celebrate IWD and bring attention to these issues, our employees have been sharing what IWD means to them and how we can achieve an equitable future.