MARCH 2018

Lisette Cooper, Founder and CIO, Speaks to U.S. News & World Report on How to Increase Portfolio Performance by Investing in Gender Equality

An article published on March 22, 2018, by Debbie Carlson at U.S. News & World Report states that companies that make gender equality part of their business model have higher returns. As one example, a report by the nonprofit group Catalyst found that companies with the highest percentages of women board directors outperformed those with the least number of women, on average, by 53 percent on return on equity, 42 percent for return on sales, and 66 percent for return on invested capital.

But according to Lisette Cooper, Athena Capital’s founder and CIO, gender-inclusive investment strategies and portfolios go beyond simply having more women on corporate boards. A larger goal of gender investing, she says, seeks to empower women by increasing their access to capital or by creating new services and products.

Cooper suggests that investors should start by looking at companies with strong workplace equality. She recommends asking about corporate disclosures of workforce diversity data that is broken down into the same categories the Equal Employment Opportunity Commission uses. A company’s sustainability impact statements may also contain data.

Companies that help women access capital to start a business are another thing to look for. Cooper notes gender remains a key factor for whether an individual or business can access capital. Between 63 percent and 69 percent of women-owned small and medium businesses in developing economies have less access to capital than those owned by men, says Cooper, citing data from the International Finance Corp., a member of the World Bank Group.

Sometimes investing in gender equality is easier than you think, Cooper says. Cellphone communications companies in emerging markets are good examples of how to think creatively about gender investing. For example, women who have cellphones can access mobile payments, which gives them much-needed access to capital. “A lot of investments [directed] at helping the consumer in emerging markets actually are disproportionately helping women,” says Cooper.

Yet Cooper acknowledges that this angle of gender investing, that of companies with products and services designed to elevate women, can be the most difficult to discern. “This theme is most vulnerable to gender investing’s version of greenwashing if the quality of the outcomes is not considered,” Cooper says. Companies that make medicines to treat diseases affecting women have more positive impact on women’s lives than companies designing more fashionable shoes for women. “The former is much more connected to the desired outcome of gender equality,” she says.

Cooper also observes that now that workplace harassment and gender violence are coming out in the open, companies will need to pay closer attention to how both issues can hurt the bottom line, but few companies are. “Are we having a big loss in productivity based on the existence of this kind of violence? The answer is yes,” she says.

Although gender-based issues aren’t considered a material risk for companies yet, they could become one as investors start demanding more transparency, she says. “When does a company start losing customers based on inequality or discrimination?” she asks.

The full article from U.S. News & World Report titled, “Invest in Gender Equality for Strong Portfolios,” can be accessed here.

Dr. Lisette Cooper founded Athena in 1993. She sets the firm’s overall direction and leads Athena’s Investment Committee.

 

This document and the information contained herein should not be construed as a guarantee of actual or future performance results. This document and the information contained shall not constitute an offer, solicitation or recommendation to sell or an offer to purchase any securities, investment products or investment advisory services. The material contained herein has not been based on a consideration of any individual client circumstances and is not investment advice, or should it be construed in any way as tax, accounting, legal or regulatory advice.