Grading Mutual Funds on Gender Pay Gap, Parental Leave, and More

Grading Mutual Funds on Gender Pay Gap, Parental Leave, and More

In order to truly support the movement for gender equality in the workplace, we need to make sure the corporations that we finance with our investments are striving to do the same. Gender Equality Funds is excited to announce that our mutual fund grading system has evolved, and now incorporates company research covering two additional areas: equal compensation and work life balance, and commitment, transparency, and accountablity. These two new categories join the existing categories: gender balance in leadership and workforce, and policies promoting gender equality.

By using company gender equality data from Equileap, we are able to continuously update our mutual fund grades to reflect the most up-to-date information on gender equality at global corporations. Equileap provides gender equality scores on more than 3,500 companies, and also publishes research papers with insights per region, country, and sector.

Addressing the gender pay gap is a fundamental consideration when discussing gender equality issues in the workplace. As part of the equal compensation and work life balance category, we now analyze fund holdings to see if companies have published gender segregated pay information or an overall gender pay gap in the company reports or filings. Additionally, we use Equileap data to determine whether or not the companies a fund has invested in have a strategy with specific activities to close any gender pay gap.

Also as part of the new equal compensation and work life balance category, we incorporate data on companies’ paid leave programs for childcare, to both primary or secondary caregivers globally. With the added implications of COVID-19 in the work environment, another new scoring criteria looks at whether companies are providing the option for employees to control and/or vary the start and end times of the workday, and/or vary the location from which employees work.

Finally, the new commitment, accountability, and transparency category gauges whether the companies invested in by mutual funds have undertaken an audit or been awarded an independent gender audit certificate by any Equileap recognized body.

Below is an example of the results for an S&P 500 index fund which reflects our updated approach to grading investments on gender equality.

Each scored fund recieves an overall gender equality score, which is broken down into sub-categories. Now, new criteria on equal compensation and work life balance and commitment, transparency, and accountability are incorporated into the fund scores. The results for this S&P 500 index fund show that companies still have a ways to go to earn full points on Equileap’s gender equality scorecard. (Results as of September 2020.)

By using Gender Equality Funds, we can harness power of our investments to hold corporations accountable and promote gender equality in the workplace.

Grant Bradski is a project coordinator and research associate at As You Sow.