Emerging Challenges in Gender Lens Investing

Apr 19, 2018 8:15 AM ET

Emerging Challenges in Gender Lens Investing

by Amy Domini, CFA and Founder, Domini Impact Investments 

For the past several years Domini Impact Investments has been incubating a small portfolio that, in addition to other standards, applies a gender lens of the simplest nature[1]. In order to qualify for purchase, the company must employ one female on the executive management team or have one female on the board of directors. The portfolio is unconstrained, multi-cap, global and opportunistic. Within this Wild West of a universe, this one standard has produced portfolio management challenges, personal challenges and frustration well beyond anything I had anticipated.

We begin with the fact that here in the United States it is fairly common to see women in leadership positions, – not exactly routine, but it happens. This is not the case in much of the rest of the world. Challenges, however, create opportunity. We have had a multi-year correspondence with the largest Japanese publicly-traded companies over gender diversity. Happily, these conversations have led to occasional feedback that our comments have led to results. Once again, the fact that a standard for purchase exists proves itself helpful as a social change vehicle. Naturally this is why we apply standards so to see it in action makes the effort valuable. 

Here in the United States we also have diversity issues. Diversity can be accidental. We have had to sell a portfolio holding when the one woman on the board transitioned off or the one woman in top management left. This tells us that a policy that prioritizes inclusion is missing. Should we use the stock again when the accidental inclusion of a female occurs? As our standards do not include progress, we do not really give credit for simply having a policy regarding women and other protected classes. Such documents are informative when compared one to another, and therefore add color to our knowledge base, but they don’t really help in our efforts to pick companies. We have here also written several companies several times to explain our standards and ask what their gender diversity standards are. Responsiveness from U.S. based companies is perhaps a bit weaker than from Japanese ones, certainly not markedly better. 

Read Amy Domini's complete Blog Post and her extensive bio here - http://greenmoneyjournal.com/emerging-challenges-in-gender-lens-investing/