Evidence suggests that women will play a crucial role in raising the funds necessary for the green transformation, both as investors but also as industry decision-makers. Positive News spoke with two female finance leaders about the future of climate-focused investment.
Maria van der Heide worked for many years in environmental policy advocacy and human rights before she switched to the financial industry.
“Money talks,” says the head of EU policy at ShareAction, adding that finance is where she felt she could drive the most change. “If you manage to convince the financial system to embed sustainability properly, then I think you can have a big impact.”
ShareAction’s mission is to harness the power of investment, to drive social and environmental progress. The good news is that sustainability-centred investment is on the rise. Funds that include environmental, social, and governance (ESG), criteria now account for 10 per cent – or $649bn (£514bn) – of all fund assets worldwideThis is a significant improvement on previous years. In 2019, these funds represented just $285bn (£225bn).
According to US financial ratings and analytics firm Moody’s: “2020 marked a breakout year for ESG performance”, and in Europe alone, sustainable fund assets were up by 55 per centBetween 2019 and 2020
So, what’s driving the trend? Women are a part of the trend.
‘Money talks,’ says van der Heide, who took a job in finance to maximise climate impact. Image: ShareAction
A 2020 YouGov survey commissioned by Canaccord Genuity UK, a wealth management company, found that over 80 per cent of women think it’s important to invest in ‘responsible’ companies (72 per cent of men agreed).
Van der Heide stresses the importance of not generalising but says: “If I look back at my experience working with communities affected by big industry – such as big mining or infrastructure projects – when asking men and women about their needs, generally women tended to be more society or community-focused than men, who took more of a short-term perspective. Making sure we address the climate crisis, maintain biodiversity and respect women’s rights (and human rights more generally), may therefore be higher up the female priority list.”
Climate impact investment firm conducted research Clim8, in partnership with YouGov, found that women’s drive to financially support products and services doing good in the world also shaped their buying habits. More than 8 out 10 women consider the environment in their purchase decisions, compared with 7 in 10 men.
If you convince the financial sector to properly embed sustainability, you can make a significant impact.
Clim8 only invests in companies that make a difference in areas like green energy, sustainable food, and clean mobility. Its smartphone app lets users see the climate impact and generate gigawatts clean energy.
CEO Duncan Grierson is targeting a 50-50 male-female split, “or even higher”, in the makeup of their customer base. While two-thirds are currently male, Megan Olwen Williams, the company’s chief of staff and vice-president of operations, sees lots of potential to attract the interest of female investors.
“Making investments in this way is still quite new, but there are lots of opportunities to encourage more women to get involved,” she says. “Investment can feel overwhelming for those fresh to the field, so demystifying what happens behind the scenes and the language used is important.”
One initiative she’s particularly excited about is the Junior ISA that Clim8 is due to launchLater in the summer. She hopes it will introduce a whole new group – and their mothers – to the notion of responsible investment.
‘For me, it’s really important to get out of bed with that sense of purpose,’ says Olwen Williams. Image: Clim8
Evidence is available to show that women are not only investing capital but also taking leadership roles in the sector. It’s a welcome trend in an industry still lagging painfully behind when it comes to gender equity. (An analysis of a recent survey. by the Financial TimesThe results showed that there were more funds managed by men called Dave and David than there were female portfolio managers. Only 7.7 percent of funds were examined. This is encouraging, as it was found that the majority of funds were run by men named Dave or David in the five years preceding 2020. British recruiter Acre Resources appointed womenIt filled almost half the top ESG jobs.
Women in ESG make headlines and provide inspiration to those who are interested in becoming involved. Engine No. 1 was a fledgling activist investment company. 1 forced its way into winning three seats on oil and gas giant Exxon Mobil’s board, it was CEO Jennifer Grancio who led the charge. Credit Suisse’s shareholder base also recently voted against management for a climate resolutionShareAction, a coalition of investors led by Catherine Howarth, CEO, filed the complaint. The group, which represented an investment of €2.2tn (£1.8tn), called for the bank to strengthen its climate plan and accelerate its transition away from fossil fuels.
Olwen Williams was a pioneer in climate-focused business when she started her sustainable cycle clothing company a decade back. Eventually, she folded the business and moved into tech after “the maths didn’t add up”, but her love for the mission remained.
Climate-focused investments are on a rise, but they need to grow faster. Image: Karsten Wurth
“For me, it’s really important to get out of bed with that sense of purpose,” she says. “There are days when you’re juggling so many things and trying to fix a problem here, or another issue there. But it’s nice to be able to step back and remind yourself that what we’re trying to do is make sure the future is a brighter and better place.”
Clim8 has a team of 50 people, but almost all senior managers are women, and two women make up the executive team.
Van der Heide states that while some of the stats are encouraging, there is still a need to increase female representation in all areas of investment.
“It’s starting to improve and awareness [of the importance of diversity]is on the rise. For example, in the Netherlands, we have the first female minister of finance, and at European level [Ursula]Von der Leyen was the first female president in the European Commission. It helps to have those examples.”
Ultimately, having more women invest in and lead climate-friendly funds isn’t the only way to drive sustainable investment forward. What’s required is a wholesale shift of the sector itself, van der Heide adds.
“That may be helped by having a more diverse leadership team,” she suggests. “If you want to respond to the fast-changing world, you need to make sure your decision-making structures reflect society at large. And it’s really important for women to have a seat at that table.”
Main image: Christina
Clim8 funded this article. When you invest your capital is at risk.
