Having worked in financial services for over 28 years, I’ve often observed some gendered differences in the workplace, in investing and even in how individuals think and talk about money (or for that matter don’t talk about money). But it was this New York Times piece, Money is Power and Women Need More of Both, out earlier this year, that really captured the true essence of where we stand today.
“Women are running for political office in record numbers. They are challenging the sexual status quo from Hollywood to corporate offices, pursuing power as seldom before,” writes the New York Times. “But there is one barrier yet to be toppled: Money.”
The Women and Wealth Mindset
According to the New York Times article, women have long been steered away from the unapologetic drive for wealth and even when women do make substantial money, they have often chosen to exercise the influence it brings differently than men. For example, while women often choose to use their wealth to help others, men tend to use their wealth to enhance their own personal profile and, in a sense, grow their own personal brand (think the naming of a building, donating to a college, or using their spot on the board of a major institution to help a friend or acquaintance).
The ways in which men and women have chosen to use their wealth have contributed to the current power and pay gap between the sexes. However, recent indicators prove that this trend may be shifting. Increasingly, more and more women are considering the ways in which their wealth can be used to address some of the greatest global challenges facing our planet today. While men have historically used their money to grow their influence, today, women may be ready to use their wealth in a traditionally female and yet non-traditionally profound way: to address the world’s greatest environmental, social justice and inequality issues.
Major Challenges Facing the World in 2018 and Beyond
The United Nations has identified 17 Sustainable Development Goals (SDGs) as the blueprint to achieve a better and more sustainable future for all. The 17 SDGs address global challenges such as poverty, inequality, hunger, climate change, and peace and justice among others.
Of course, the UN is not alone — and can certainly not find success alone — in their quest to create a better and more sustainable future for all. To encourage the global community to participate in creating a better world, through focusing on the SDGs, the UN launched the “Be the Change” campaign, encouraging individuals to live more sustainably at work and at home by changing consumption patterns and other everyday habits. But for those looking to wield their wealth, there are additional ways to participate in affecting major change and tackling the SDGs.
How Women are Using Investments to Drive Social Change
Historically, investing has not been about affecting social change but rather making a healthy return. Today, that is changing. While a healthy return is still an important factor for investors, impact investing is gaining momentum as more and more women gain control of the country’s wealth. As Kiersten Barnet, deputy chief of staff and manager of the Bloomberg Gender Equality Index, told Forbes, “It’s the first time in history that women in the U.S. control more assets, or are allocating more assets, than men. So, I think the biggest shift will be in client demand and what clients are looking for, and individuals and leaders will adjust their strategies and products to adapt to that.” As women gain more control of the country’s wealth, they are funneling it towards causes that matter to them. As the Guardian wrote, women are investing more and more and they are choosing companies that have a positive impact on the planet, as well as their portfolios.” Through investing in ESG (Environmental, Social and Governance) strategies, investors can put their money towards issues and causes that matter on a global level and on a personal level. For instance, if women’s equality is an issue you are passionate about, you may choose to invest in the Pax Ellevate Global Women’s Leadership Fund or the SPDR® SSGA Gender Diversity Index ETF, both of which invest in companies that demonstrate greater gender diversity within senior leadership than other firms in their sector. By choosing ESG strategies, investors can help move the needle on SDG issues and in their portfolios.
The growth of impact investing and ESG strategies can undoubtedly be largely attributed to an increase in women’s access to capital, which is due to several shifts over the last few decades including the fact that women are better paid today than at any point in history; their participation in the job market has grown 23% since 1950; and women are now “inheriting wealth from husbands, who tend to be older and to have shorter lives, or from parents, who are more likely than previous generations to treat sons and daughters equally,” according to The Economist.
With women wielding their wealth to make significant impacts on environmental, social and governance issues, more and more investors are now considering ESG data in their risk analysis and overall judgement of a company’s performance. The beauty of impact investing and ESG strategies is that investors can use their wealth to affect positive change while simultaneously generating a financial return.
Thematic Investing and How Artemis Financial Advisors Can Help
I have become an advocate of ESG strategies and impact investing, which is one reason I chose to join the team at Artemis Financial Advisors. Artemis offers sustainable and responsible investing as an option for interested clients. Our approach is fully aligned with our overall investment philosophy and focuses on utilizing low-cost investment vehicles that have been screened for environmental, social, and governance criteria.
Earlier this year, we also introduced thematic investing as a forward-looking investment approach that seeks to capture the opportunities created by long-term structural trends. The basic premise of thematic investing is that in an increasingly globalized world, what is more important is investing in the companies and sectors that will benefit from the structural changes facing the global economy. These global trends will provide opportunities to investors who can take a longer-term view. You can learn more about our approach to thematic investing in our Q1 2018 Market Outlook and Strategy report.
To conclude, I’ll offer up a question posed by the New York Times: “Does the path to power require acting more like men, or can women wield influence in ways that are different but just as effective?” At Artemis we believe in the latter; that women can use their wealth, influence and philanthropic tendencies to dramatically change the course of the country and world for the better — and in effect collaborate as partners with the UN and other social change agents to overcome some of the greatest challenges facing the planet today.