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Women in responsible investing

By: Annalise Toberman


It is almost 8th of March, or International Women’s Day – a time when everyone from brands to publications, NGOs and other organisations show their support for female empowerment and draw attention to the hardships still faced daily by women globally.

We think talking about women’s issues at a cultural level has given rise to some fantastic initiatives, but what is often missing is more serious engagement with women in investment (and the financial services industry in general), an undertaking that has the power to make material and lasting change happen. There are two angles here, one being women’s participation in investment (and more specifically, responsible investment, whether it is ESG-screened or billed as sustainable) and the other being more women being invested in via responsible investments that get us closer to gender equality (one of the United Nation’s Sustainable Development Goals, no less). Both are growing.

The latter may mean investing in companies that emphasise putting more women on company boards, supportive employment policies around maternity leave and flexible working, or focus more on working conditions of women along the supply chain. There is now a range of freely-available tools for investors who want to align their values with their investments (from a gender equality perspective). One such tool is Gender Equality Funds, a search platform that enables users to look up investment funds that score well on gender balance and gender equality policies. The funds are rated using a combination of Morningstar and Equileap data, and with the help of As You Sow, an NGO dedicated to promoting CSR through shareholder advocacy. The tool is US-based for now, but responsible funds that make gender equality at least part of their mandate have ben widely available in the UK for a few years now.

Of course, the issue of women in investment (and more broadly in financial services) is already interesting in and of itself due to the nature of the investment world, which is one of the most male-dominated. Where pay gap reports have been published, with Hermes being one of the first to do so, the gap was revealed to be as significant as 30%. Other financial services firms reported similar, or higher, pay gaps. The disparity is in part because of the high proportion of women in lower-paying roles (entry level or administration rather than investment management), while the most senior roles see lower turnover and generous bonus packages. So even where firms have tried to improve the gender balance through hiring practices, change is slow to filter through.

Sometimes it is a vicious cycle: an industry is regarded as male-dominated and it deters women from working in it. Technology, engineering and the political sphere all face this problem. Some financial services firms are now actively trying to shift perception. In February, for example, Rathbones hosted 10 young women as part of the Lord Mayor’s Appeal ‘She Can Be’ event. They got to be investment managers for a day and in the process, found that a financial services career path could be more accessible to them than they had believed it to be previously.

On the advisory side of things, Research in Finance researchers typically conduct interviews with men. Yet when we interview or moderate groups of paraplanners, the gender (and age) balance is considerably more diverse. These individuals are armed with professional qualifications and often ambitious to climb the career ladder. Ultimately, the next generation of advisory firms looks set to be more female.

While conducting research for the Responsible Investment Review, financial advisers we spoke with told us that they were slightly more likely to be asked about responsible investing by women investors. The former, they said, were more likely to take a stand in trying to avoid investing in tobacco or companies with sub-standard practices or disclosure. Moreover, our survey of 1,001 private investors found women to be significantly more likely to express an interest in responsible investing, having been provided with a basic description of this and ESG specifically. Female investors are also more likely to rate a range of approaches to responsible investing more favourably than male investors, from ESG integration to investing in ‘themes’ such as renewable energy and positive impact investing.

Not only is gender equality considered one of the main criteria included in the very essence of ESG; women are also starting to feel like they have some ‘skin in the game’. Wanting to change the status quo is another reason why responsible investing may strike a chord with female investors and City professionals. Perhaps it is, as Investment Week puts it, a ‘meeting of movements’ between ESG and the broader ‘women in investing’ commitments and initiatives. And let’s not forget that more and more working women are actually emerging as the money managers and decision makers in their respective families, which is true both in the UK as well as at a more global level to varying degrees.

Annalise Toberman

Annalise has spent her working life intensively researching B2B and B2C audiences in the financial sector. A keen qualitative researcher, she has conducted thousands of interviews across advisers, DFMs, fund houses, platforms, pension providers and consumers.


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