Impact Blog

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 Erica Lasdon, ESG Senior Research Analyst, Calvert Research and Management

      Washington - For many years, responsible investors have been using dialogue, shareholder resolutions and proxy votes to advocate for greater workplace equality. Focusing on increasing diversity on boards and disclosure of diversity metrics and practices, these proposals have increasing investor support. For example, Sullivan and Cromwell reports that 2017 vote totals for board diversity resolutions averaged 31% support, up from 26% in 2016.1

      However, real progress on the top-level metrics remains slow. In "The Calvert Diversity Report: Examining the Cracks in the Ceiling," released in 2017, Calvert Research and Management found that women make up only 23% of all S&P 100 board seats, up slightly from 19% in our 2013 report. According to the Credit Suisse Research Institute's tracking of gender issues in 2400 companies globally, just 16% of senior management positions in the US were filled by women in 2016, a marginal increase from 15.4% in 2014.2

      This stalled US progress also extends to broader gender equality measures. According to PwC UK's Women in Work Index, the US gender wage gap in 2015 was 18.9%, a slight increase from 17.9% in 2013.3 The World Economic Forum's Global Gender Gap Report provides an annual ranking of 144 countries and the US fell from 45th place in 2016 to 49th place in its 2017 report.

      Beyond the broad economic argument, the business case for work in this area remains as compelling as ever. Diversity is a key ingredient to succeed in an increasingly complex global marketplace, where the ability to draw on a wide range of viewpoint, skills, backgrounds and experience is critical to a company's long-term success. Studies indicate that inclusive corporate culture and diverse leadership can positively affect or show correlation to organizational and financial performance in numerous ways, including innovation, retention, sales, productivity, reputation, return on equity and price/book ratios.4The investor case for continuing to press for progress is clear.

      The increased attention to diversity is supported by expanded interest in and research about other aspects of inclusive corporate culture and diverse workplaces. A 2017 McKinsey/ study found that while nine out of ten companies report that gender diversity is a high priority, only about half of employees think their employers are doing what it takes to improve and have a high commitment to gender diversity.5

      In 2017, the National Association of Corporate Directors highlighted oversight of corporate culture as a top governance imperative for all boards -- specifically identifying leadership development, employee engagement, diversity and inclusion as board level responsibilities.6

      Investors are also taking a close look at the issue of harassment and bias at companies, mirroring an increased societal focus on this persistent problem. The continued efforts of the Thirty Percent Coalition to coordinate progress on gender equity in corporate leadership are as critical as ever, as is investor action on the related issues of pay equity, disclosure of workplace diversity data and other emerging issues. Calvert plans to continue to deepen our investment research on diversity and use the full investor toolkit to engage with companies on behalf of our portfolios.

      Bottom Line: Real progress on the top-level gender equity metrics remains slow, but the business case for improving in this area remains strong. Calvert will continue its work to encourage positive change.