Could 'emerald finance' solve business challenges and accelerate gender equality?

All my life, gender equality has been close to my heart - for obvious reasons.

I’ve been very lucky with the many opportunities I've been afforded throughout my career. Along the way I've had many (male and female) mentors and bosses who encouraged me to lean in, even though it was far outside of my comfort zone. They believed in me, way before I did.??As a qualified accountant,?I’ve always been fascinated with finance and how data and numbers can tell a story. This curiosity - and following the money all the way to Switzerland - led me to work in accounting, management consulting, banking, private equity and corporate services before joining Executive search.

Throughout my career, research and studies on the benefits of equality and gender diversity including the real bottom line impact it can have, filled me with hope and for some reason I just assumed everyone was as lucky as me. I rationalised the fact that I had less and less female colleagues as perhaps they didn’t want a career. And those who were there, some had kids, I realise with hindsight, that I didn't treat them with enough kindness and understanding at times - the arrival of our little darlings made me appreciate what huge efforts they went through to have a career.

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Recently I attended an event where gender pay gap reporting was on the agenda (it was signed into Irish law in 2022 with first reporting in December for companies over 250 Employees).

I asked a panel of senior lawyers what we could do better to effect more change. On the way out I was stopped by a young, ambitious lawyer who thanked me for asking the question and told me that she is leading the diversity and inclusion efforts at her firm. I could see my younger self in her, full of hope and ambition. I’m afraid that more likely than not we will fail her. And even if opportunities find the way to her, she may have to sacrifice a lot for it.?She may make it to partner but then stumble on the final hurdle to equity partner, preventing her from participating in profit sharing. The odds are stacked against her, there are currently only two female managing partners in the top 20 Irish law firms.

She may also make it to partnership and then decide she doesn't want to spend the rest of her career trying to balance how her life could fit into her work schedule.?Also, she will be likely paid less than her male peers.?

I know that male lawyers and professionals work just as hard for their luck in their careers. However, research suggests, they are less likely to carry as much of the household and primary child caring duties. So, they can be arguably more single minded about their career progression. They too are considering if the work/life balance they have is what they want. Talent attraction and retention is challenging for law firms in general.

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As much as we might like to think that the workplace is changing, a recent UN report from 2022 suggests that it will not just take several generations but 300 years to achieve gender equality if we do not take action.

This is troubling me, as I’d like for both of my kids ?my daughter (6) and my son (2), to have the same access to a meaningful career.

Directives, legislation and quotas are now well under way and will have an impact. However, they carry a connotation with it that is similar to that when someone mentions audit or compliance. All of it is necessary and important but rarely inspiring.

In my day-to-day job in Executive search, I?speak to a lot of senior talent. Based on?hundreds of candidate conversations, candidate?journeys post Covid have transitioned from extrinsic motivations to intrinsic, value driven conversations.?

We've put together a guide to attract and retain female leaders. Then we realised that these are gender agnostic and make the work environment better and more inclusive for everyone.

I also get a glimpse into the organisations we work with and what’s important to them.

A lot of companies are working through several market challenges post Covid, including managing liquidity, increased cost of capital as well as navigating general economic uncertainty.

While the general sentiment is that more gender diversity is the right thing to do, it is not one of the top ten priorities that keep CEOs awake at night.

Even if you look at the main concerns of HR departments for 2023, there are a lot of new employment law updates – the right to request flexible and remote working, the statutory sick pay scheme, and the enhanced protection for whistleblowers, most likely gender pay gap reporting is not the number one concern out of all new legislations.?This makes perfect sense as the reputational risk exposure and potential penalties are much higher on the other topics.

It feels a bit like asking someone for a donation to a good cause, while their house is on fire.?

Of course companies care, but in times of uncertainty making a change and taking a ‘perceived’ risk is more difficult.

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What if there is a solution that could benefit all??

If we look at what has worked well with environmental and climate targets is that they are supported by a growing amount of green finance solutions which is helping to incentivise change and allow companies access to new sources of funding effectively lowering their cost of capital.

We’ve seen ‘green shoots’ emerging with a range of climate finance products via Green Bonds, sustainability linked loans, Article 8 and Article 9 Funds as well as impact investing on the equity side via institutional investors.

Perhaps there is a real opportunity to do the same for social targets such as gender diversity, creating a win-win. We could make it abundantly attractive for companies to change with subsidised gender diversity linked loans. On the equity side, institutional investors could start offering gender impact funds to invest in for individuals and pension funds. And Ireland could be their domicile of choice.??We could call it Emerald Finance.

I’m welcoming feedback as it will take some time to test the merit and refine the idea. Maybe it will inspire some conversations and perhaps some fiscal policy to encourage those solutions in upcoming budget proposals.

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Until then, could we perhaps implement something similar to the UK Tax Free Childcare Vouchers and include BIK relief for employer childcare contributions in the budget 2024?

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Asking for a friend…