How female investors can lead the way to a low-carbon world

How female investors can lead the way to a low-carbon world

This story originally appeared on Ensia.

Women increasingly are driving the global economy. According to a 2009 Harvard Business Review article, women controlled $20 trillion in consumer spending each year. Morgan Stanley reports that women control $11.2 trillion of the United States’ investable assets, too — assets held in one’s bank account, stocks, bonds and certificates of deposit.

Furthermore, investing that takes environmental, social and governance (ESG) issues into account has grown in popularity as women seek more meaningful investment options than traditional investors have.

Commenting on a recent survey of high-net-worth individuals, Jackie VanderBrug, a senior vice president and investment strategist at U.S. Trust, said just over half of respondents expressed interest in social and environmental impacts of their investments. For women and millennials, that rate jumped to 73 percent, according to VanderBrug — suggesting that as women invest more, ESG investing could become the norm.

Increased market attention to social and environmental issues is helping these issues gain broader public recognition. But the most important thing we can do to maximize women’s influence on finance and sustainability is to place more women in positions of power in boardrooms and C-suites.

One study from the Haas School of Business at the University of California, Berkeley, that looked at ESG categories across more than 1,500 companies found that companies with more women on their boards were more likely to address and reduce environmental risk through actions such as measuring carbon emissions, avoiding biodiversity disturbance and investing in renewable energy.

Sea change in the C-Suite
At the executive level, we see companies such as Estée Lauder Companies Inc. — where women make up close to one-third of the executive team — committed to managing and understanding environmental, social and economic impacts throughout their value and supply chain, focusing on energy, waste, recycling and workplace safety.

In a message to stakeholders, Pamela Gill Alabaster, vice president of global corporate responsibility for Estée Lauder, wrote that the company is planning to implement new governance structures, develop climate change policies and weave sustainability across its brands. Alabaster noted that Estée Lauder is continuing to increase how it transparently communicates on progress with its stakeholders, a critical component of long-term corporate improvement.

Estée Lauder is not alone. A Barclay’s report (PDF) in partnership with the Economist Intelligence Unit highlights that gender diversity — specifically, the presence of women in senior management — is a main indicator of a company’s commitment to ESG criteria.

Estée Lauder is also one of the leading companies on the Pax Ellevate Global Women’s Index Fund, headed by Sallie Krawcheck, former president of the Global Wealth & Investment Management division of Bank of America and a notable promoter of gender diversity in the workplace. Krawcheck is working to ensure that the positive influence of women within companies grows.

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