Gender Equality Today for a Sustainable Tomorrow: A Discussion with Sharmini Chetwode
Sharmini Chetwode, head of Environmental, Social and Governance Research (ESG) for Asia in Global Investment Research, discusses how gender inclusion contributes to corporate sustainability.
How does gender diversity and inclusion fit into ESG?
Gender diversity and inclusion falls under the social pillar of ESG and have implications beyond ESG scores – they influence economic growth, social prosperity and corporate returns.
In terms of economic growth, in our Womenomics work, we’ve found that if Japanese female labor participation were to rise to that of males’, the potential boost to Japan's GDP would be 10%. The impact would be even greater – up to 15% – if female working hours reach OECD average. For corporates, diversity is good for corporate performance and investors; Japanese listed firms with higher female manager ratios tend to deliver higher ROEs and sales growth – and this is just one of the many data points.
It’s important to note that diversity doesn’t automatically equate to inclusion. Many companies in the region report diversity data, and investors increasingly use this and other ESG data within their investment frameworks. But inclusion can only be achieved when a company’s diverse workforce is fully engaged with corporate priorities, and believes that their input and opinion can influence agendas and outcomes. Indirect data proxies for this are the gender pay gap (the difference in wages between males and females across an organization), and the proportion of women in senior positions and on the Board.
What are your observations in the financial industry’s progress in the region in achieving gender equality?
We have seen significant progress in diversity in the financial sector in the last 10 years. That progress is a little uneven at the most senior levels, and so continued focus on talent pipelines and mentorship/sponsorship is important. Ten years ago, these tools weren’t such a prominent part of financial industry strategy. More recently, focus on the gender pay gap has pushed corporates to think about how to tackle gender equality which is an area of rising focus for investors and the wider public, which has potential to impact access to capital.
What can companies do to get more women in senior positions and male-dominated industries to create more diverse teams?
To fill the gap at the senior level, aspirational goals must be part of the equation, with support of other efforts (mentorship, sponsorship) to create a pipeline of diverse talent. Companies need to identify talent early on and provide support through their life events, such as partnerships, child birth, child rearing and elder care, to limit attrition. Campus recruitment efforts should target diverse groups.
What is sometimes underappreciated is the need for relatable role models for women in these industries – those whose progress through an organization is linear as well as others who show that there are many phases in a career and the glide path doesn’t have to be smooth.
What are the things that individuals can do to move the needle and drive gender equality and inclusion?
Inclusion is everyone’s responsibility and it requires real teamwork. Irrespective of gender and seniority, we should all remember to draw breath and make sure all opinions are heard in meetings. This is not just about politeness; it’s about making quality decisions. Beware the echo chamber where the most senior/loudest opinion consistently wins the debate. This is an important governance consideration as well, and is why we see such a focus on Board diversity (diversity of gender as well as expertise) leading to better decision making and returns. For managers, always try to think about the progression of your team and your juniors, instead of just your own progression.
What advice do you have to women colleagues at the firm?
Opportunities come to those who offer solutions to problems, particularly commercial ones. If you feel you don’t have a strong sense of commerciality, look around you at those who do. Ask for their feedback and interpret it objectively. One mistake I still make is being too tentative with my ideas. Learn to communicate effectively, about both personal and career objectives.