For Women's History Month, which is recognized in March across much of the English-speaking world, we decided to take a closer look at the ESG issues that can have a profound impact on women's wellbeing. We’ll examine issues like equal pay, workplace diversity, and fair lending practices.
"We cannot all succeed when half of us are held back.” – Malala Yousafzai
March is Women’s History Month in the United States, United Kingdom and Canada; it was designated thus to highlight the contributions of women to our history and to modern society. Indeed, there’s much to celebrate: 2020 marks 100 years since the 19th Amendment was signed into law, granting women in the United States the right to vote. During the ensuing century, international women’s rights movements have made tremendous strides—in the United States alone, we’ve not only witnessed many female ‘firsts’ (from the first woman to join the Supreme Court, to the first woman to enter space), but also seen meaningful progress in areas such as female workforce participation.
However, despite these watershed moments, the truth remains that many women and girls around the world are still treated as second-class citizens: according to a new United Nations (UN) report, almost 90 percent of people worldwide—men and women—hold ingrained biases against women and their capabilities.
It’s clear there is still work to be done when it comes to realizing the vision of true, global women’s empowerment and gender equity, and your portfolio is just one place to start.
With that in mind, here is our primer on some of the global issues that are intrinsically linked with women’s advancement and wellbeing:
The Equal Pay Act was signed into law in 1963, prohibiting gender-based wage discrimination. Yet, decades later and despite significant progress, the data suggests that we still have yet to achieve this ideal: one Bureau of Labor Statistics analysis noted that, as of 2018, women in full-time, salaried positions had median weekly earnings of $789—just 81 percent of the $973 median earned by their male counterparts.
A year after the law’s passage, the landmark Civil Rights Act’s Title VII provision also made it illegal for most employers to “discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” However, in a 2017 national survey, some 40 percent of female respondents indicated that they had, at some point, experienced gender-based discrimination in the workplace. This discrimination was most perceptible when it came to the issues of being paid equally or considered for promotions (41 percent), or during the job application process (31 percent).
Pay disparity is detrimental to women’s economic security, and that of their families—over half of children living in poverty inhabit a household headed by women. The pay gap renders women less able to support themselves and their families, save for retirement, and spend on goods and services. This, of course, has a subsequent macroeconomic impact—according to an original analysis of 2016 Current Population Survey data, closing the gender wage gap could have added $512.6 billion to the U.S. national income in one year alone.
As the World Economic Forum notes in its most recent Global Gender Gap Report, “developing and deploying one-half of the world’s available talent has a huge bearing on the growth, competitiveness and future-readiness of economies and businesses worldwide.” Indeed, the business case for equal pay is multi-faceted and significant. For starters, companies that compensate staff fairly might enjoy a boost in productivity as a result of increased employee morale, and render themselves less liable to anti-discrimination lawsuits. They may also be better equipped to attract a more diverse, skilled talent pool and enhance their competitive advantage.
Women have made significant inroads in corporate America in recent years, in part thanks to an increased legislative focus and the efforts of socially conscious shareholders. As investors demand greater transparency in disclosures, we’re seeing more women occupy positions within the upper echelons of large companies. And this isn't just a symbolic achievement; research suggests that board diversity affects the size of the gender pay gap.
The path to equal representation at the top has been a slow one, but progress is being made: an MSCI evaluation of 2,765 small and mid-cap publicly traded companies found that in 2019, 20 percent of directors were female (up from 17.9 percent a year prior). Diverse workforces, in general, appear to be more conducive to female progress: where women are outnumbered by men in the workplace, they report higher rates of gender discrimination than those in more balanced professional environments. This reported discrimination may impact their ability to get ahead, affecting the recruitment and hiring processes, as well as their ability to secure promotions and climb the career ladder.
Inviting diverse perspectives to the table seemingly makes for good business sense, too: a growing body of research suggests a correlation between workforce gender diversity and positive outcomes such as increased revenue and profits.
Fair lending practices
Considering their diminished earnings relative to men and their role as primary caregivers, it might come as little surprise that women are significantly more likely to utilize payday loans. These short-term loans typically carry prohibitively high interest rates, with scant regard for borrowers’ ability to repay, and are sometimes mired in deceptive marketing practices that tend to target financially distressed individuals in their time of need. Sadly, this cohort often includes victims of domestic abuse, who are more likely to find themselves financially dependent on their partners and unable to escape in part due to economic reasons.
Although payday loans offer fast access to capital in a pinch, they can trap borrowers in a cycle of perpetual debt—one 2014 Consumer Financial Protection Bureau (CFPB) study found that most payday loan borrowers renew their loans multiple times and ultimately end up paying more in fees than the original loan principal borrowed. This ongoing financial instability can have a profoundly disruptive impact on the borrowers’ lives, potentially resulting in eviction, foreclosure, and/or repossession of the vehicles upon which they depend to travel to work and meet family obligations.
The urgency of the climate crisis has been garnering international attention for some time now, but often the conversation fails to address the potentially outsized impact that climate change may have on women.
An increasing body of evidence links climate change to extreme weather events, which are likely to become more frequent and intense if the underlying issues remain unaddressed. And it tends to be women that are disproportionately affected by these catastrophic events, particularly in parts of the world where cultural norms render them less able, or likely, to escape—whether as a result of their deeply entrenched role in the home, the restrictive clothing they wear, or other inbuilt prejudices that mean they have been discouraged from learning how to swim. These factors mean that natural disasters, on average, “kill more women than men or kill women at a younger age than men, and the more so the stronger the disaster.”
One recent study also identified a link between climate change and increased perpetration of gender-based violence against women. Climate change precipitates adverse environmental conditions, which in turn can create fraught situations wherein the battle for scarce resources— including food and shelter—is amplified, exacerbating existing inequalities and laying the groundwork for “a rise in gender-based violence as a means of control and reinforcement of power imbalances.”
Hazardous waste, typically generated by industry and businesses, carries substantial environmental and health risks. However, for women, the effects of exposure to pollutants such as heavy metals—which can sometimes permeate water supplies—can be more pronounced. One study of expectant Japanese mothers found that the elevated blood presence of cadmium in particular is associated with early preterm birth risk. Additionally, according to the Centers for Disease Control and Prevention (CDC), exposure to lead during pregnancy is linked to a number of adverse outcomes, including miscarriage, premature birth and stunted fetal growth, as well as learning or behavioral issues, in childhood.
In the U.S., the Environmental Protection Agency (EPA) continues to hold companies responsible for violation of hazardous waste policies that expose individuals to dangerous levels of pollutants, but it might surprise you to learn of another major culprit: our increasing reliance on digital devices. Discarded computing parts, cell phones, and televisions (among other items) can contain potentially harmful components such as lead, cadmium, and mercury that, if not disposed of properly, may leach into soil and contaminate water supplies.
The women’s rights movement has come along in leaps and bounds over the past century, and there’s much to celebrate. However, there’s still work to do—it’s important to remember that when women flourish, we all thrive. We hope this primer provides fodder for a thoughtful conversation around the issues that impact women’s wellbeing, and how we can collectively focus our efforts to achieve a better future for women.
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