Impact Blog
New report provides essential context for gender-lens investing

The views expressed in these posts are those of the authors and are current only through the date stated. These views are subject to change at any time based upon market or other conditions, and Calvert disclaims any responsibility to update such views. These views may not be relied upon as investment advice and, because investment decisions for Calvert are based on many factors, may not be relied upon as an indication of trading intent on behalf of any Calvert fund. References to individual companies for Engagement or Research purposes are provided for illustrative purposes only and may not be representative of the results of all of Calvert’s engagement efforts. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Past performance is no guarantee of future results.

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      By John Streur, President and CEO, Calvert Research and Management

      Washington - I recently had the opportunity to review a new research study on the benefits of gender diversity and equity for business, written by Calvert Impact Capital. For anyone who wants to understand this important subject, the new report, "Just Good Investing: Why gender matters to your portfolio and what you can do about it," is essential reading.

      The report notes the growing evidence and collective understanding that gender equity is good for investment, businesses and society. However, it also indicates that this knowledge has not translated into the expected action from the investment world. To change this dynamic, the business case for achieving gender diversity and equity must be strengthened, and investors must have clear guidance on how to incorporate metrics on gender diversity and equity into their investment processes and analyses.

      To develop the dataset for this report, Calvert Impact Capital analyzed 160 current and former borrowers from across its portfolio, representing a cumulative $23 billion in assets under management (AUM). The analysis revealed that, on average, companies with the highest percentage of women in senior management and board positions outperformed those with the lowest percentage. The data sample showed the relationship between women in leadership positions and financial performance, suggesting this could be a key leverage point for investors and businesses.

      The report presents what we believe is a compelling business case for considering gender issues when making investment decisions. It outlines three steps for investors to develop a gender-inclusive investment process:

      1. Set realistic expectations based on the type of capital being invested
      2. Understand the tools at your disposal
      3. Realize that gender-lens investing is an art, not a science, and context matters

      Gender equity in our investment process

      Calvert Research and Management (Calvert) incorporates metrics on board diversity into our investment research process and in our Global Proxy Voting Guidelines. We believe that companies with a board that is at least 30% women are more likely to create well-structured work environments for women and, therefore, be able to achieve the benefits of a diverse workplace for the business. Our investment research is designed to differentiate companies that meet this metric from those that do not, and our proxy voting guidelines are written in support of diverse boards and to withhold support from those that lack diversity.

      Calvert's shareholder advocacy efforts consider opportunities where companies can improve their behavior on a range of material gender issues. Each year, Calvert uses the tools we have as investors - dialogue with companies, shareholder proposals and proxy votes - to advocate for change within companies we believe lack sufficient diversity. We have been particularly active as shareholders in encouraging the companies we own to institutionalize a commitment to diversity, inclusive of gender and ethnicity, in the selection of board of director candidates. Our proxy voting policy is to vote against individual directors who serve as members of the nominating committee if the board lacks gender and racial diversity. In the 2017-2018 proxy season, we voted against board members at 1,214 companies due to lack of gender or racial diversity.

      In addition to incorporating this information into our research and acting on it through proxy voting and corporate engagement, Calvert is also a member of the Thirty Percent Coalition, a group of 90 investors, corporate leaders and public policy organizations committed to the goal of women, including women of color, holding 30% or more of board seats across public companies. As part of this initiative, Calvert collaborates with other investors on diversity engagement - to date, more than 180 companies have appointed a woman to their boards following the Coalition's Institutional Investors' outreach.

      Bottom line: We believe board diversity is a critical factor to corporate success. Calvert Impact Capital's report, "Just Good Investing: Why gender matters to your portfolio and what you can do about it," helps advance the dialogue about gender-lens investing, and provides a useful tool for investors who want to consider this in their investment approaches.