How To Invest In Companies That Empower Women
Women in business have made incredible strides, overcoming countless hurdles while facing endless adversity. Despite great progress over the decades, there is still a lot of work to do, but time and time again, investing in women has proven to be a very prudent move in the long term.
While many investors are familiar with socially responsible investments (SRI), there’s still a certain prejudice that these are more “feel good investments”, or something that someone would slip into their portfolio to feel a little better about some of their socially irresponsible investments. You can invest in companies that empower women while simultaneously making the wisest financial moves. It doesn’t have to be one or the other, socially responsibility can also be fiscally profitable.
Companies that empower women and promote diversity in the workplace are well positioned to overcome the challenges of our day. When companies hire and promote women in their highest ranks, they’re opening up the playing field to twice as many suitable candidates. They’re choosing from a much wider net than companies that are biased in favor of men.
Aside from researching and investing in individual companies, you can find a number of managed portfolios to invest in. This helps to spread out the risk of putting all of your eggs in one basket. Let’s take a look at a few notable funds that focus on helping you invest in companies that have a proven track record of female empowerment.
Calvert is one of the leaders when it comes to empowering women in the corporate world, and they do much more than offer a fund that focuses on equality. Beyond simply holding positions in companies that treat women fairly, Calvert has helped develop guidelines and language for companies to follow in order to ensure their boards are diverse and inclusive. It’s not just lip service, a large handful of companies have changed their board selection process as a direct result of Calvert’s pressure.
Calvert has also worked with the United Nations to help empower women in business all around the world. They fund reports and research on gender inclusivity in the workplace, and the impact of their guiding principles.
The Calvert Women's Principles is a document that was created to help women reach their potential in a world where the deck has historically been stacked against them. They use their proxy votes in favor of equal pay for men and women, and have a 100% voting record in this regard.
They push companies to make socially responsible choices, and they put in the extra effort to prove that these aren’t just good decisions for the world, but that they’re also great business decisions.
Here’s Calvert’s philosophy in their own words: “We’ll never limit our actions to the trading desk. Experience has taught us that active engagement with the companies we invest in, can drive real-world outcomes and improve shareholder value.”
Calvert has a number of funds available depending on one’s investment timeline and goals. All of their funds follow their principles for investing in women, and also feature a number of other socially responsible traits.
Praxis Mutual Funds
Praxis doesn’t just talk about empowering women, they actively push companies to make changes to protect them, even outside of the board room.
Praxis has worked with airlines and hotel companies alike to create guidelines to recognize and reduce human trafficking. They push these companies to acknowledge that they are a part of this horrible crime, although inadvertently, and that they must take steps to notice when someone could be in trouble, and to train their employees on how to act accordingly in these difficult situations. This is the real on-the-ground work that can save lives, far beyond the board room.
This is a great example of how loudly money can talk. Massive corporations in the travel and tourism industry aren’t always going to take smaller organizations seriously, but when many people (investors) come together, they can use their money as a voice to influence companies to do the right thing. It’s unfortunate that this is how things work, but recognizing the framework we’re operating in and using it to their advantage makes Praxis a socially responsible company that is pushing for real change.
Fidelity Women's Leadership Fund
This fund is relatively new, it was launched in May of 2019. The objective of the Women's Leadership Fund is long-term growth of capital by investing in companies that meet certain conditions, based on how they prioritize the leadership and development of women.
As we’ve seen with the previous two funds, there are many different ways that investors can support women, from hiring practices, to advocacy.
As of June 30th, 2019, some of this fund’s top holdings include Microsoft, Disney, Anthem, and Ulta. These companies are just a few equities out of more than a hundred that are held by this fund as of June, 2019. To meet the requirements to be considered for inclusion, a company must have a woman on the senior management team, have women representing at least one third of the board of directors, or be hand-picked by the fund manager for having a culture in which they are working hard to empower women in a number of ways.
That last part is important, it rewards companies that are actively making huge strides, even if they aren’t quite there yet. It gives the fund a little bit of leeway beyond their first two requirements. You will have to trust their judgement a bit on this, but they have a woman running the fund as of its inception, and there is no reason to believe they’ll use that third criteria for anything other than companies that deserve to be included.
Many of the funds that work towards empowering women also have great stances on other social issues, too. They prove that you don’t have to decide between making money or being conscious of the world around you, and many of them have been active long before this was a trending idea.
While there are still “boys clubs” present in the corporate world, even among some of the more progressive businesses, the old guard is facing mounting pressure, and they’re going to have to adapt or they’re going to lose.