Increased gender diversity, especially in senior management, can have positive financial impacts and create social good, says Mirova's Soliane Varlet.

Soliane Varlet is a portfolio manager at sustainable investor Mirova, an affiliate of Natixis Investment Managers

A World Economic Forum study found that only 1 in 5 men in Japan say they would be ‘very comfortable’ with women as CEO. For you, how does culture play a role in the future of women in leadership?

Attitudes towards women in leadership will obviously vary according to countries, but it will also vary by sector. There are strong stereotypes still in place, as well as strong barriers to entry.

All of this has, in fact, emerged as part of something larger, and that exists in all organizations, countries, and sectors, which is called ‘unconscious bias’. Defined as ‘the new science of unconscious mental processes that has a substantial bearing on discrimination law’, unconscious biases influence our thinking, our choices, and our decisions. And they play very strongly against gender equality.

«I think it's great because in doing this he becomes quite a role model for Japanese working fathers»

Nevertheless, I believe people are beginning to understand how this dynamic works and they are willing to change it. Take the example of Japan, where you are not really at gender equality. I was reading recently about the environmental minister in Japan who announced the birth of his first son and his decision to take some time off work – two weeks’ leave over three months.

I think it's great because in doing this he becomes quite a role model for Japanese working fathers. And having good role models is an important part of the gender diversity debate.

Will we ever reach gender equality?

Naturally, we hope we will reach gender equality sooner rather than later, but clearly we are not there yet. Gender equality is one of the 17 sustainable development goals of the United Nations. It’s a massive challenge in society in general, but it's also still a real challenge in the world of work.

«There’s a correlation between the proportion of women on the executive committee and corporate performance»

Today, only half of the world's working-age women are in the labor force compared to more than three-quarters of working-age men. Globally, women also earn over 20 percent less than men.1 The World Economic Forum estimates that at the current pace of change it would take over 250 years for the economic gender gap to close.

Do the share prices of companies with more women in C-suite positions perform better over the longer term?

Multiple research shows that there’s a correlation between the proportion of women on the executive committee and corporate performance.2 Correlation is very important here, not causality. So, while there’s no causality, there’s clear consistency in research outcomes.

Why is that?

Maybe because more diverse companies are better able to attract talent. Securing a talent pipeline is likely to pay off both in the short and the long term because a more diverse team will lead to more innovation.

«Incidentally, we've issued an investor statement to more than 1,600 companies»

Employer brand is maybe something that doesn't jump to mind for most people when they think about why diversity is so important, but if you really want to attract talents in a company, having strong diversity and inclusion policies is key.

At what point in your process do you recognize when a company culture is markedly different in its approach to gender diversity?

Very early on. When looking at the numbers of women in the executive committee, the numbers of women in key C-suite positions, and so on, you can recognize if the company embraces gender diversity or not. Then you check that with their gender policy practices.

Incidentally, we've issued an investor statement to more than 1,600 companies. The idea is to increase awareness among companies, and among corporates, to let them know that these social topics are of crucial importance to us and that it should be an important consideration for every investor.

«Some firms were really very surprised that we are interested in gender diversity data»

The feedback, based on conversations we’ve had with companies, is that some of them were really very surprised that we are interested in gender diversity data and their qualitative approach.

It comes as a shock to them that investors might be looking at this kind of data and using it as a criterion to invest. All of which means you've got a very different approach to gender diversity depending on the companies you are looking at.

1World Economic Forum, 2019. Global Gender Gap Report 2020; International Labor Office, 2018. World Employment and Social Outlook: Trends for women 2018; UN Women, Turning promises into action: Gender equality in the 2030 agenda for sustainable development.

2McKinsey’s, ‘Women Matter’, 2016; EY and The Peterson Institute for International Economics, ‘Is Gender Diversity Profitable?’, 2015; Bank of America and Merrill Lynch, ‘The She-economy’, 2019

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