Women and LGBTQ+ people are leading climate innovators—both when serving as managers in the financial sector, and when voting with their dollars.
The global gender pay gap will now take 136 years to close. In early 2020, the World Economic Forum (WEF) had estimated that it would take 99 years to close the gender pay gap. But after just a year of the pandemic, WEF calculated that women were set back by nearly four decades. Black, Indigenous, Latinx, and other women of color who were already battling a larger pay gap than white women, were set back further. The United Nations UN) reports women and girls will bear the brunt of environmental, economic, and social shocks from climate change—the UN also says women and girls are early adopters of new technologies, first responders, and important decision-makers about sustainable home decisions.
Despite those facts, women, and LGBTQ+ (Lesbian, Gay, Bisexual, Transgender, Queer, and more identities—the Human Rights Campaign has great definitions and resources at hrc.org) people are taking control of finances by being on the board of corporations and banking their values. They are creating solutions to climate change, not being victims of it.
This is an important point for the many women and LGBTQ+ leaders in the socially responsible investing movement (SRI) who are creating pathways for investors to support businesses that are run by diverse leaders and making better decisions for people and the planet.
“At every level, from the village to the middle management to the executive suite, the more women there are in decision-making, the more likely climate is to be part of that decision,” says Julie Gorte, senior vice president for sustainable investing at Impax Asset Management{GBN}.
Corporate Responsibility has Intersectional Benefits
In the SRI community (also called Environmental, Social, and Governance [ESG] investing) analysts look at different markers for diversity—including how racially and gender-diverse a company’s leadership is, pay equity, and other factors to create products like index funds for investors to back companies with strong social justice values.
“When there is more diversity in decision-making, the companies tend to be environmentally better, they tend to manage resources better, and they tend to be more innovative,” says Gorte.
According to studies from 2019 and 2012, firms with female CEOs had lower emissions than their peers; companies with women in the executive levels were more likely to invest in renewable energy, integrate climate into decision-making, measure and manage emissions, and find other solutions to reduce environmental risks.
When there is more diversity in decision-making, the companies tend to be environmentally better, they tend to manage resources better, and they tend to be more innovative.
Julie Gorte, senior vice president for sustainable investing, Impax Asset Management
Impax is one of several companies that has developed index funds for sustainable and diverse investments. Another is Adasina Social Capital, which uses connections with social justice organizations to decide what priorities to consider when creating sustainable and socially just fund products.
Renee Morgan is a social justice strategist with Adasina and works with social justice partners to establish investment criteria and direct investment campaigns.
All sorts of investments can be looked at from a gender perspective, but gender justice is so closely linked to racial justice and climate justice that it's hard to talk about just one, Morgan says. For example, the prison divestment movement grows as investors decide they don’t want to own stocks in private prison companies—or take it one step further by also screening companies that provide services to prisons, says Morgan.
With Black, Latinx, and Native American men being incarcerated at far higher rates than white men, according to the Prison Policy Initiative, their families have to face life with their loved ones behind bars. The partners of those incarcerated men, often women of color, are likelier to be caring for family members on one income, paying for transportation to visit their loved ones, and paying for overpriced prison “services” like phone calls and commissary foods. LGBTQ+ women of color face much higher rates of incarceration than their straight and cisgender peers.
The good news is that companies are seeing more investors who don’t want to participate in the prison industrial complex, and as Adasina reviewed its portfolio, it found 21 companies it had previously excluded because of their participation were now not involved in prisons, so they could be re-introduced to socially responsible funds. Activist investors have pushed major banks including JPMorgan Chase, Bank of America, Wells Fargo, and others to exit the private prison and immigrant detention industries, as of 2019.
“Even though we talk about our four pillars being gender justice, racial justice, climate justice, and environmental justice, nothing we do fits into neat categories,” Morgan says. “We’ve been working deeply on a sub-minimum wage campaign, and even though that means a wage increase for tipped workers, it’s 70% women and something like half of those women of color that work in restaurants.”
Building Better Banks
For many women and people in the LGBTQ+ community, as well as people of color and those who grew up without much money, investing can feel out of reach. Even banks can feel out of reach. More and more financial institutions are working to serve people who have been historically not included in the investing community—including those women and people in the LGBTQ+ community, as well as communities of color, blue collar workers, and poor people. Make no mistake about it—banking is investing.
So says Dara Kagan, the first vice president of social impact banking at Amalgamated Bank{GBN} which is based in New York City and serves people all over the country through online banking. Amalgamated was founded by the Amalgamated Clothing and Textiles Union in 1923 because there just weren’t banks that had open doors for people without large amounts of wealth, like union members.
A growing number of socially responsible financial institutions, like Amalgamated, are prioritizing transparency in their values and investments. For people who feel that they can’t afford to invest in the stock market or other traditional investments, choosing a bank that aligns with personal values is especially important, because money held in your accounts is invested by the bank until you need it. Amalgamated lists the issues it invests in and how on its website, like building a special lending solution for Planned Parenthood affiliates across the country and providing pro-bono services for the Transgender Legal Defense and Education Fund, as well as many more initiatives related to LGBTQ+ rights, reproductive rights, climate justice, worker’s rights, and others.
“We build on our history by virtue of serving not just working families and individuals, but entire organizations of social justice movements that work on change,” Kagan says. “It’s not just what we say, it’s what we do, trying to live up to our values. That is so important for those who choose to bank with us.”
What all these investing professionals show is that whether you have a modest paycheck to deposit at the bank or are a shareholder worth millions, investing in women and the LGBTQ+ community is a win for the triple bottom line—people, planet, and profits.
**GBN notes a certified Green Business Network member at Green America
