iSAW partners with the University of Arizona on ESG Gender Equality Report

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This research was done in partnership with iSAW International, Ascent Growth Partners, and the University of Arizona, W.A. Franke Honors College.

Abstract

The ‘Gender Equality: A Catalyst for Accelerating ESG and Beyond’ report provides a detailed look at how gender equality is a key catalyst for acceleration of ESG (Environmental, Social & Governance) commitments. The analysis team used a combined approach 1) data, sources, facts (research) approach and 2) a visionary foresight-based (op-ed) approach. Both look at how ESG and gender equality are interlinked and expose some new insights on those linkages, namely that gender equality is not just a positive contributor to the ‘S’ in ESG but also to the ‘E’ and ‘G, and that gender equality is a key catalyst to accelerating ESG, and wider business outcomes, within corporations. The combined approach helps understand the current events of today and anticipates new possibilities, innovative solutions and disruptive changes. The study is intentionally provocative and has identified several key ESG and business benefits for organizations who embrace gender equality, the barriers to achieving these as well as a ‘multiplier effect’ model which will help accelerate change 10x within their organization.

Download ESG Gender Equality Report >

The Objective

The objective of this report is to provide insight from existing research and experts on how gender equality is a key catalyst for the acceleration of ESG (Environmental, Social & Governance) commitments. The report also aims to prove the hypothesis that gender equality is highly correlated as a key driver of ESG outcomes, accelerating its delivery and acting as a positive multiplier for broader business outcomes. The focus is gender equality for working women: working women are defined as woman-identifying employees who are employed outside the home or are self-employed. However, the findings relating to the mutually reinforcing linkages for working women are relevant to wider societal aspects of gender equality for women overall. 

The current state of Gender Equality

At the current rate of progress, the World Economic Forum’s (WEF) Global Gender Gap Report 2022 predicts that it will take on average 132 years to achieve Gender Equality globally. This number combines four different indicators of gender equality progress, with one of the most drastic indicators, women’s economic participation, estimating it will take 151 years (the global average) to achieve equality. Therefore, the 132 years doesn’t advance at pace unless the business community accelerates equality for women in the workplace which is the core challenge which this report seeks to provide solutions.

Gender Equality – moving at a snail’s pace

The latest WEF report is telling us we’re inching away at a snail’s pace.  In 2021, the world was 135.6 years away from Gender Equality, the 2022 WEF reports that we have only progressed to 132 years. 

The Challenge

iSAW and Ascent are unwilling to accept this timeline and have a mission to accelerate gender equality for women in the workplace by 10x. That translates to achieving women’s economic equality in ~20 years.  This mission is based on the premise, underpinned by evidence, and lived experience, that the case for change is centred on business value and not merely social responsibility. This paper shines a light on one aspect of this business value, namely ESG, and the need to refocus leadership mindsets and behaviours on this topic, given that the largely male dominated decisions to-date have left the wider aspects of sustainable business severely degraded.

The status quo in achieving gender equality isn’t working – for women, for enterprises and for the level of innovation required to solve the main societal challenges of our times: from climate change to a growing wealth gap, from environmental degradation to resource constraints, from social inequality to geopolitical tensions which have brought many of our global systems (energy, food, economic stability, etc) under severe strain.

The Opportunity

Therefore, to achieve this 10x acceleration business leaders need to adopt new mindsets where they understand and act upon the value of greater gender equality not simply as a social responsibility but as a lever to achieve sustainably better business outcomes, including the delivery of their ESG commitments.  There is a significant untapped economic value according to the McKinsey Global Institute which estimated that a further $28 trillion of GDP would be unlocked in 10 years if the full potential of gender equality was reached. This is the equivalent of a doubling of the likely contribution of women to global GDP in the business-as-usual scenario. Achieving global gender equity is not about redistributing existing economic resources; it is about creating additional economic value from which all people can benefit.

While much research has already been published around the linkage between gender equality and business value, many leaders with whom we have engaged still remain unaware, unclear or even skeptical about this linkage. They acknowledge lack of experience or confidence in their executive teams to prioritise investments in this over other performance levers in which they have traditionally invested in the past. They recognise growing pressures within their organizations, as well as externally, to advance gender equality, but how this can be done in a way which enhances Diversity, Equity, and Inclusion (DE&I) and business outcomes, remains unclear to them. A way to break through this current paradigm is to find business imperatives that can act as a conduit for increased focus on gender equality.

One strategic imperative that many in enterprises are challenged with is ESG and the implications to their business customers and investors. Consequently, iSAW and Ascent began to explore the linkages between gender equality and ESG and realized such linkages were complex, multifaceted, and inconsistently recognized or applied. To close this gap, we conducted a comprehensive research project in partnership with the University of Arizona (UofA) W.A. Franke Honors College to evidence the existence of those linkages and explore what more might need to be done to leverage those linkages for better business value.

The original premise for the research was to test the hypothesis that ESG could be a conduit to accelerate gender equality. And while the research proved this, it further demonstrated that gender equality was a key catalyst in the acceleration of all aspects of ESG and wider business outcomes. 

The Key Takeaways

The key takeaways from this research are:

  • Gender equality is interwoven into all aspects of the ESG framework
  • Gender equality is not just a part of ESG but is rather a key catalyst for its acceleration
  • Governance is where this acceleration opportunity driven by gender equality mostly readily creates momentum to achieve a sustainable set of wider ESG and strategic outcomes.

This virtuous relationship between Governance and gender equality is currently the most dominant one.  When women are present in senior executive and board positions it gives them influence over key decisions, systems of internal control and other governance activities. The more gender-balance exists at the top, a culture and set of leadership behaviours will prevail that positively impact decisions across the wider dimensions of ESG, e.g., setting new environmental standards, empowering partnerships with social stakeholders and raising trust levels with such stakeholders. Over time, further iterations of this virtuous cycle led to bolder action, as the enterprise becomes more visibly purpose-driven and begins to invest more deliberately in integrating ESG outcomes into its strategic decision making processes. This whole virtuous spiral is both catalyzed by and sustained through the shift to greater gender diversity and equality.

These takeaways are visually depicted in the Fig.1 below:

iSAW - ESG Report

 

While the research found substantial evidence of the mutually reinforcing linkages between gender equality and ESG, the level of commitment in the business community to further invest in women as a strategic talent to deliver not only their ESG obligations but wider business outcomes remains low. A radical shift in business leadership mindset and behaviors is needed if the WEF prediction of 151 years to economic parity is to be accelerated by 10x and delivered in 20 years. 

Companies have a Responsibility

Companies are uniquely positioned to accelerate gender equality for women in the workplace, creating a collective impact on a global scale that would have a ripple effect to accelerate all aspects of ESG and wider aspects of business performance. Therefore, companies must break from the current status quo and leverage Horizon 2 and 3, called out later in the report, to create visionary innovations and mindsets to be used as a catalyst to educate, elevate and empower women at all levels within their organizations and more broadly within their communities and society at large.

The 3 Horizons approach provides a framework to expose acceleration paths to the future state. The Horizons were used to identify the interlinkages and enablers of gender equality within the broader ESG framework

Horizon 1:   Current  

What is currently being done and has become mainstream

Horizon 2:  Emerging  

Which new options and choices are being made

Horizon 3:  Visionary  

What must be done to achieve the desired outcomes 

Who should care and Why?

This report is intended to raise awareness, offer insight and provide a clear call to action for this shift in mindset and behaviors and is targeted at:

  • Board of Directors, to provide greater confidence to their shareholders of their commitment to ESG and the sustainable performance of their organization and fulfil regulatory demands.
  • CEOs and CFOs, to inform capital allocation decisions in their organisation and ensure the most productive use of resources, in achieving better business outcomes.
  • ESG Heads, who would like to accelerate the achievement of various SDG commitments.
  • HR and DEI Heads, who are keen to integrate the delivery of better gender equality and wider diversity and inclusion activities with strategic business objectives.
  • Funders, Financial Services, Executives, and Investors, in industries where ESG plays a critical role.
  • Public sector leaders and policy makers, who can set the right legislative environment for gender equality and ESG to thrive.
  • Women and their allies who are keen be part of a community that learn, lead and influence the change required to level the playing field for women in the workplace. 

What actions to take now?

There are three ways that individuals and companies can participate and join us in this mission:

Mindset Shift:

  • To tackle ESG at scale and pace, company leaders require a mindset that is future focused and driven by long-term objectives. 
  • Company leadership needs a ‘mind-set shift’, based on gender equality data-driven insights that demonstrates gender equality positively impacts leading indicators. This includes but is not limited to ESG. 

Institutionalizing Gender Equality:

  • Gender equality must be integrated into the company culture and objectives as a strategic lever to tackle current and future business challenges. Gender equality must be elevated from a DE&I initiative to a business performance imperative.
  • Companies need to sustain work environments for women at all levels to thrive. This is achieved through people-process interventions (recruiting, promotions, pay, benefits, etc) that interrupt bias and regular reporting on progress toward goals.
  • Companies must work with their communities to implement processes which attract women to enter the workforce, encourage them to develop within their ranks and realize their full potential. This will include a comprehensive approach to future-proofing their skills. 

Collective Impact:

  • Share your stories and examples of where you have seen an increased focus on gender equality leading to better business outcomes, including the delivery of ESG commitments. 
  • Be part of a community of change agents who can learn from each other and help create the visionary state of Horizon 3, as outlined later in the body of this report. 

How to accelerate?

Through this report and other interventions, we in the iSAW and Ascent Growth partnership are keen to act as a catalyst for the step-change in innovation, mindset and behaviours required to close the gap on gender equality in the workplace and realise the untapped economic value that will come from better business outcomes, including improved ESG performance. 

Consequently, iSAW and Ascent have developed an approach which leverages gender equality to positively impact intermediary business outcomes that lead to business value, with a clear investment case where business leaders can feel more confident in allocating capital, knowledge and human resources to achieve significant benefits. This multiplier-effect approach is depicted in Fig.2 below.

iSAW - ESG Report - Multiplier-Effect

In support of this approach, we have developed an integrated set of services to allow enterprises to determine which strategic business outcomes they wish to impact, how to leverage gender equality and other aspects of the of their Diversity, Equity and Inclusion (DE&I) agenda to maximize these outcomes. These services include gender equality diagnostics and benchmarking, leadership interventions and expert-curated learning communities for women and their allies and are all enabled by an innovative technology platform, powered by Unily, which will allow the scale and reach of the 10x mission to be achieved.

Contact us about how we might help if you are keen to get into action on accelerating the business benefits, including ESG, from increased gender equality within your enterprise.

Download ESG Gender Equality Report >

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