Investor guidance on gender equality

Anna Triponel

May 3, 2024
Our key takeaway: More and more companies are recognising gender equality as a fundamental part of both their responsibility to respect human rights and as a basic component of doing business. Yet many companies are still not meeting the mark of putting their principles into practice, especially when it comes to issues like supporting workers to care for their families—through parental leave, flexible working arrangements and taking time to care for children, elderly family members and family members with special needs. These findings come from the 2023 World Benchmarking Alliance (WBA) Gender Benchmark which measured indicators of gender equality and women’s empowerment across 1,006 of the most influential companies across 80 countries, including a deep-dive on 112 of the most influential companies in the apparel and food and agriculture sectors. The WBA points to the influential role that investors can play in spurring companies to disclose more and to do more to support gender equality in the workplace and in their supply chains. They can ask key questions of companies in their portfolios across areas like paid leave for carers, treating leave as a human rights rather than a benefit, and taking action to prevent and remediate workplace violence and harassment. They can also push companies to enable suppliers to respect human rights and promote gender equality in their own workforce, not only by putting in place supplier codes of conduct and contractual requirements—but also by using responsible purchasing practices that don’t undermine suppliers’ ability to respect rights in practice.

The World Benchmarking Alliance (WBA) published Gender Benchmark: Investor Guidance (April 2024):

  • Company performance on gender equality is “very low”, especially on family care:  The benchmark shows that companies score on average 17%, with the highest scores around 50% and 12% receiving zero across all indicators. WBA concludes that “[w]omen are often underrepresented, un-heard and un-seen in the places they work.” One key factor is that adequate parental leave and unpaid family care are not widely seen, with only the top companies making public commitment to gender equality and implementing “family-friendly policies.” According to the WBA, many companies are seeing parental leave as a benefit offered to some employees but not a human right for all. Only 36% of companies have a parental leave policy but only 7% of these meet the ILO’s standard of 14 weeks of maternity leave; 31% offer paternal leave but only 8% meet the ILO’s standard of two weeks of paternity leave. Investors can learn more about what their investee companies are doing—and spur them to take further action—by asking key questions on the company’s public commitments to gender equality and policies for family care. For example: Do you offer family care support like paid time off for breastfeeding, attending appointment with children, elder care or special needs care? Do you offer flexible work and collect gender disaggregated data on who uses it? How much leave do you provide to primary and secondary carers? Do you monitor return to work data for primary and secondary carers?
  • Most companies prohibit workplace violence and harassment, but few are taking meaningful action: The benchmark indicates that 66% of companies have a public policy prohibiting violence and harassment in the workplace, but only 4% disclose information about how they remediate incidents. In a deep-dive on the apparel and food and agriculture sectors, 67% of company its require their suppliers to have a policy against violence and harassment but only 6% require the policy to be available in multiple languages and 10% require suppliers to train managers and workers. Investors can ask portfolio companies questions like: Do you have public policies and training for workers on violent and harassment in the workplace, and do you require suppliers to do the same? Do you have a remediation process for violence and harassment grievances and collect data on remediation? Do you require suppliers to do the same?
  • “Suppliers are set up to fail” on gender  equality and human rights: A large number of companies (85%) report that they consider suppliers’ human rights performance in contracting and 87% include one or more requirements on gender equality in their supplier contracts. However, many companies are undermining these requirements in practice by failing to use responsible purchasing practices. For example, only 27% of apparel companies are applying responsible buying practices to enable suppliers to respect human rights and promote gender equality. Investors can ask questions like: Do you describe how human rights performance is considered when selecting suppliers and in other business relationships? How is human rights performance applied when deciding to renew, expand or terminate business relationships, including with suppliers? In your contractual agreement with suppliers, do you include provisions related to gender equality? Does it include key themes like creating an enabling environment for freedom of association and collective bargaining; promoting formal rather than informal work; paying a living wage; providing family-friendly benefits; preventing and remediating violence and harassment; and ensuring other fundamental human rights of workers? Do you provide targeted support to suppliers to do so? Do you adopt responsible purchasing practices that do not undermine suppliers’ ability to pay living wages, provide family leave and respect other human rights?

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