Investing in a gender-equal future

In my last issue of Money's Impact, I laid out why climate change and gender equality are so linked when it comes to sustainable investments. As promised, this week I'll be continuing this topic by talking about the options that we all have to help solve these challenges. It's time for action, be it by adding new funds and bonds to your portfolio, or by making smaller, but equally important changes, like reviewing your existing investments against new, gender and climate-focused investments.

While I was researching today's issue, I read so many amazing reports, guides, and articles, and I really recommend them all to anyone who is interested in learning more about the topic of climate change and gender equality. Today's 'Resources' section is a little bit bulkier than usual, so be sure to let me know which of the guides I've included that you found the most useful in the comments below.

Here are five actions you can take to align your investments towards gender equality and climate change...

1. Audit your investments

One of the best ways to ensure that your investments are having the impact that you intend them to, is to make sure you fully understand your portfolio. One good way to do this is to perform a 'self-audit' of sorts.

For this, you would traditionally create a list of all of your investments, look at the total value of each one, and then look at a breakdown of their performance, fees, and so on. You should make a note of any interesting patterns you see, as well as if any funds or assets are under- or over-performing. To look beyond this traditional criteria and consider how your investment is doing with regard to climate change and gender equality, you need to dig deeper and include gender and climate-focused framework here. This will ensure that you can always keep sight of the bigger picture.

A. Including gender

One of the most popular frameworks currently in use is the 2x Challenge Criteria , which looks at gender across the value chain. Some of the questions used here include:

• Was the company founded by a woman, or do women own a majority share of the business?
• Does the investment specifically target female customers and/or design products or services tailored to women?
• Do women represent at least 30% of board members, or at least 20-30% of sector managers, depending on the sector?

To find this information, you should look at the materials that your investment providers, or the companies you invest in, publish each year. Track down your latest investor report, and have a look at what they've included when it comes to sustainability. You can also use lists or indices such as the Solactive Equileap Global Gender Equality 100 Leaders Index , or the Bloomberg Gender-Equality Index .

If a couple of your investments fall into the same industry or category, you might want to research the sector as a whole - for example, we know that the financial industry has historically not hired many women into senior positions, meaning that if you have invested in fintech, this is something you should specifically try and find out more about.

If you are part of a larger company, and you're trying to boost your sustainability practices, why not have a look at KPMG's Sustainability Auditing brochure.

B. Including sustainability

After auditing your portfolio according to gender-focused criteria, you can do the same for sustainability - or more precisely, for climate change.

In terms of sustainable investing, we 'screen' companies to see which perform the best on a series of ESG criteria. From this, we get 'positive screening', where companies are selected because they perform the best, and 'negative screening', where companies are excluded from investments due to poor performance.

Screening your providers and your investments allows you to see how well they are actually doing in terms of sustainability, as well as how transparent they are being with their activity (which is something we will talk more about in tip #5).

If you want to start screening your existing investments and providers today, Morningstar Direct offers a 'full dashboard of sustainability metrics', including:

• Assess how companies in a portfolio manage carbon risk
• Select suitable ESG funds and stocks that align with investor values
• Conduct competitive analysis by screening funds on sustainability factors

When it comes to the screening process, the more you can find out about a company's sustainability practices, the better informed you will be to make a decision.

If you want to focus on a screening future or potential investments, a helpful website that I have found is Earthfolio , who describe themselves as 'the first online advisory service with an ESG screening ecosystem'. Included in this 'ecosystem' are ten environmental, social, and governance criteria (including the environment and equality). For reference, some of the sustainable mutual funds that they list include:

• Brown Advisory Sust Growth
• Calvert Green Bond
• i-Shares 1-5 USD Corp Bond

Many more modern investment platforms, such as Sugi , Clim8 Invest , or Globalance Bank , make it much easier to gain an overview of all the sustainability and performance metrics you might need to look at your portfolio under this lens.

2. Find alternatives

The natural progression after you have formed a self-audit is to then get rid of the investments that you no longer agree with or want to be associated with. The likelihood of finding a green alternative for your initial investment improves every day, as more and more offerings become available.

To begin with, why not have a look at popular investment platforms, and see what's out there - if you are trying to find a green alternative for an investment in a specific industry, you could begin the search by filtering available funds by this industry, and key sustainability criteria. Whether you manage your investments yourself, or through an advisor or portfolio manager, this step can be helpful in allowing you to see what's out there.

Here are some platforms were you can research and select ETF's to invest in:

• Track Insight
• Just ETF
• You Invest

Be sure to always check the ratings of the funds that you are considering.

In a change of direction, you might also want to consider how your pension plays into this. As we all probably know, there is a serious problem when it comes to the global gender pension gap. What better way, then, to promote gender equality in your investments, than through your pension funds.

Green pensions have become more commonly accessible over the last few years - in fact, even the UK's government-backed pension provider, NEST, now offers an 'Ethical Fund ', which 'carefully considers environmental, social, and governance (ESG) issues across all markets we invest in'. Given that sustainable and gender-lens investing is naturally future-oriented, investing your pension in gender equality could help close the gender gap on a personal, as well as a much larger scale.

Additional green pensions you could look into include:

• PensionBee Future World Fund
• Aviva Self-Select Pension
• Zurich Henderson Global Sustainable Equity Pension

3. Refocus your portfolio

For those investments where you can't, for example, find a green alternative, you might consider refocusing your portfolio - this means divesting from unsustainable or unethical companies, and investing this money back into greener options, refocusing your overall portfolio on one or two key sustainability aims.

You could start with many of the sites and platforms I have mentioned in the earlier steps - for example, Earthfolio might help you to find new options for your investment portfolio, but here are a couple additional places you could begin your search:

• Zurich Invest Green Bonds
• Clim8 Invest
• Sugi

As part of this step, you might find yourself trying to decide whether to engage with an unsustainable company, or to divest. Both of these options have merits, and the final decision is ultimately down to you, but here are a couple of pros and cons to help you make up your mind.

1. Engagement

• Pro: you are helping to create the change you want to see - and due to social media, it's easier than ever to hold a company accountable for i.e. not meeting ESG promises
• Con: engagement can take years, even decades. In comparison, a 2019 UN meeting warned us that climate change would be irreversible by 2030
• Con: engagement doesn't work in every industry - you might be able to encourage a tobacco company to reduce their deforestation rates, but it's impossible to reverse the health risks associated with smoking in a shareholder meeting

2. Divestment

• Pro: you are immediately making a stand against unethical companies - for many people, this can lift a lot of the anxiety and stress which can surround investing
• Pro: the money that you divest can be invested into a company which does share your values, meaning that you are helping to support sustainable and responsible goals
• Con: once you divest from a company, you can no longer encourage it to change from within - and companies are far less likely to listen to outsider suggestions

4. Advocate for change

As this issue has shown, the challenges of climate change and gender equality require firm standards and benchmarks which are encouraged by transparency in company practice. What this industry really needs is for criteria to be more broadly upheld and applied to the process of selecting sustainable investments.

Some options of how you can get involved in advocacy include:

• If you don't wish to divest from unsustainable companies, look into how you can get your voice heard within the company - being a part of a group often makes it easier to get your core message heard, so look into appropriate causes and groups to join
• For causes such as gender equality and climate change, there are numerous non-profit organisations that you can volunteer for or learn more about - check out Care International , Orsted , Rise Up , or MATCH International Women's Fund
• Speak to your friends, family, and colleagues about the missions and aims that mean the most to you - maybe you can inspire them to follow your footsteps

5. Stay educated

My final tip is one which is important for any aspect of good financial management - you should try your best to stay up to date with the industries you're invested in, and with the general landscape of sustainable investing. Understanding new criteria that has been introduced, and how it impacts your investments, will allow you to continue growing and developing your portfolio into the most sustainable version possible.

I recommend repeating these tips (especially the self-audit in tip #1) at least every 12-18 months.

Do you have any more tips that you want to share with people about investing in climate change and gender equality? Let me know in the comments below!

• Article: Equileap, ‘Gender Equality Data: Strengthening the S in ESG ’
• Article: KPMG, ‘Gender Lens Investing ’
• Article: International Institute for Sustainable Development, ‘Why a Gender Lens is Key to Sustainable Investing’
• Report: ODI, EDFI, ‘The catalytic effects of DFI investment - gender equality, climate action, and the harmonisation of impact standards: An essay series ’
• Guide: ICMA, UN Women, IFC, ‘Bonds to Bridge the Gender Gap: A Practitioner’s Guide to Using Sustainable Debt for Gender Equality ’
• Guide: Climate FINance Taskforce, 2x Challenge, ‘The Gender-Smart Climate Finance Guide ’