Super fund to shift the dial on Australian gender equality
16 June 2021 at 4:35 pm
“It’s not good enough to keep supporting the status quo.”
Verve Super has become the first superfund in the country to allocate member’s money in part based on how companies perform when it comes to gender equality measures.
The company launched its Gender Equality Investment Index on Tuesday, using data collected by the Workplace Gender Equality Agency (WGEA) to inform its portfolio construction.
The new approach aims to shift hundreds of millions of dollars away from Australian companies performing poorly on gender equality towards those with better practices.
Verve CEO and co-founder Christina Hobbs told Pro Bono News the move wasn’t just about giving Australians the option to invest ethically in companies doing the right thing by women, but to increase their returns.
“For decades research has shown that companies that promote gender equality and inclusion perform better, yet no Australian super fund has previously taken that information seriously in terms of how they invest,” Hobbs said.
“It’s not good enough to keep supporting the status quo – where there are more Andrew’s in CEO positions in the ASX 200 than women.”
Research conducted by Verve found that the companies selected for its index significantly outperformed the average performance of the ASX 200 over the past three years – outperforming the ASX 200 by almost 100 per cent.
A study by McKinsey & Company supported this, with companies in the top quartile for gender diversity on their executive teams 21 per cent more likely to experience above-average profitability.
A super power for good
With superannuation companies controlling almost half of the Australian Stock Exchange, Hobbs said that there was an enormous opportunity for the industry to flex its power and create long-lasting change for women.
“We’ve seen at different times how the super industry has been able to flex that power, questioning companies on their fossil fuel exposure, or their environmental exposure, but we haven’t really seen that same power being flexed on gender diversity and inclusion,” she said.
“So we really hope that we can bring this form of investing into the mainstream and see other funds following suit…to encourage companies to start taking some of the areas that help promote diversity and gender equality more seriously.”
Verve Super’s Gender Equality Investment Index uses standardised data from private sector organisations with over 100 employees who submit an annual report to the WGEA.
Companies that meet Verve’s other broad ethical screens are assessed under five key pillars:
- Gender pay parity
- Anti sexual harassment and workplace safety policies and practice
- Formal commitments to drive change inclusivity and flexible workplace practices
- Promotion of women into leadership
- Paid parental leave
Each pillar is given a similar weighting in scoring, consequently, companies must perform well within all pillars to score highly. From there, companies are ranked and the top five securities from each Industry Classification Benchmark (ICB) based on their gender equity score are included in the index.
Verve Super is Australia’s only super fund tailored for women, dedicating its resources to building the wealth and financial power of women.