Wednesday, March 8, 2023
This International Women’s Day Fair Finance International turns the spotlight on the gender equality scores of financial institutions assessed by Fair Finance coalitions in 2022. While the result is generally disappointing, in some countries mild improvements have been made and the Fair Finance network remains more committed than ever to encouraging the financial sector to do better for women and be a solution for gender inequality rather than a cause.
Coalitions in the FFI network assess and rank financial institutions’ policies regarding sustainability on 8 to 21 themes. Gender equality is a cross-cutting core theme and is included in each assessment by Fair Finance coalitions, because while poverty may be global, it is not gender neutral and the financial sector can play a role, for better or worse, in that. Women are more likely to carry out regular unpaid work, more likely to be paid less than their male counterparts, and more likely to hold fewer senior positions. Women are also more likely to be excluded from formal financial systems – in fact one billion women still do not use or have access to the financial system, thus rendering women more vulnerable to economic and social exclusion. Research has also shown that where women do have access to bank accounts there nonetheless persistent gender inequality in terms of loans and investments made to women.
The Fair Finance methodology therefore has a variety of elements in its Gender Equality theme that can be assessed when looking at financial institutions policies. This ranges from policies to prevent and mitigate gender discrimination, to questions on participation and equal access of women in Board of Directors and senior management levels, policies on equal renumeration as well on the inclusion of clauses on compliance with gender and women’s rights in contracts. In 2022 nine Fair Finance coalitions carried out policy assessments: Brazil, Norway, Sweden, Germany, The Philippines, The Netherlands, Southern Africa, Japan, and Cambodia. From these assessments, Norwegian financial institutions score best on the gender justice issues, with 7.5 out of 10, while there is much room for improvement in other countries. The fact that the average score across coalitions was 4.1, which is the lowest score received in the core themes, indicates a great deal more must be done to achieve gender justice.
Fair Finance International is therefore calling on financial institutions to commit to respecting internationally recognized human rights conventions and to adopt a gender-responsive approach to their operations both internally and externally. Financial institutions should conduct gender specific impact analyses on projects and companies under consideration for financing and work to ensure companies they finance have clear gender-sensitive, zero tolerance policy commitments towards all forms of gender-based discrimination in employment and occupation, including on pay and conditions, psychological harm and verbal, physical and sexual harassment.
Advocating strongly for the inclusion of the financial sector in the current EU draft due diligence legislation, Fair Finance International is also part of a campaign, alongside more than 140 organizations, calling on the EU to end gender inequality in companies’ value chains and for this future law to explicitly recognize that the adverse impacts of corporate activities are not gender neutral. Financial institutions also need to heed this call and carry out due diligence with a gender lens to ensure their practices do not leave women and girls behind.
It is time for financial institutions and the financial sector at large to consider the direct impact investment policies and practices have on the socio-economic situation of women worldwide. Major improvements are needed on gender-just financial policies and practices. However, this is an opportunity for the financial sector – a more just world is to the benefit of all – and rather than being a hindrance, the financial sector can be a driver of this vital change on the journey to genuinely sustainable finance.
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