Do women hold the key to responsible investment?

Women are more likely to invest in responsible businesses than men. So the involvement of women in building the companies that are building a sustainable world is critical, writes Jessica Robinson.

One good thing to come out of the political dysfunction we are seeing around the world is that more and more women are responding to global issues with renewed passion and unity. Just recall the sheer numbers attending the Women’s Marches earlier this year. On a massive scale, women are seeking to design solutions and forge new paths that are inclusive, intelligent and responsible.

And as we look to build fairer and healthier societies, one of the simplest and most powerful ways is to use our savings and pensions to drive that change. Using our financial decisions to make investments that deliver a world we want to live in, a world we want our children to live in.

A no brainer

Women worldwide generate large amounts of wealth. They are also enjoying higher purchasing power and having a greater influence on household spending due to increasing participation in the labour force and rising disposable income.

A few numbers:

  • Based on spending and earning power, women represent a growth market more than twice as big as China and India combined, according to a study by Boston Consulting Group.
  • In 2015, women held an estimated 30 per cent of global private wealth and their wealth is expected to grow by 7 per cent per year. According to EY, women will control close to 75 per cent of discretionary spending worldwide by 2028.
  • More women are entering the economic mainstream for the first time as consumers, producers, employees and entrepreneurs. By 2030, this could number 1 billion.

There is still a long way to go, but one thing is undeniable: women are economic powerhouses and their financial strength and influence is growing.

Powerhouses, and then some

But more than this, women are taking an increasingly active role in financial decisions and doing so responsibly. It’s increasingly clear that women have both the wherewithal and motivation to support the greater good.

Soon-to-be-published research by Moxie Future on responsible investment behaviour found that a large majority of women surveyed (79 per cent) feel that we urgently need to act in order to build a better world for our children. And a whopping 69 per cent of women feel it is important that their investment and savings decisions reflect their personal values and philosophies.

This is a moment in time when women investors have the chance to be on the right side of history.

These findings are confirmed by other studies. For example, a 2015 study by the Morgan Stanley Institute for Sustainable Investing found that female investors are more likely to factor sustainability into their investment decisions, with female investors nearly twice as likely as male investors to consider both rate of return and positive impact when making an investment.

These trends all point in the same direction. This is a moment in time when women investors have the chance to be on the right side of history. As empowered and responsible agents of change, the involvement of women in building a sustainable world for both the current and future generations is critical.   

How do we move forward?

There are challenges to overcome. A 2015 study by Calvert Investments shows only 4 per cent of the women surveyed said that they understood how to invest their money in a way that is aligned with their values, and 70 per cent had not heard of sustainable or responsible investing, even though many of the women had donated significant sums to charities and had altered their purchasing behavior to support their values.

Both the public and private sectors must recognize the immense and largely untapped potential of women in the global economy. They must recognise women’s ability as investors and financial decision makers, and provide the missing resources to cater specifically to their unique financial needs. More research is also needed to gain a deeper understanding of what drives women’s investment decisions. If we know clearly what motivates them, we will know how to get them more involved.

But that alone is not enough. Once we have access to relevant information and resources, it is also up to us to set financial goals and make smarter investment decisions.

How do we do that? There are many was to get started, as outlined in Moxie Future’s responsible investment roadmap – for example:

  1. Continuously strive to become more educated and empowered. Learning about the issues, exploring options and asking questions are all vital for being informed citizens.
  2. Do some soul searching. We all need to think about what really matters to us and where we want to see positive change. Whether it is the fight against human trafficking or air pollution, our personal values are a good starting point to form our investment strategy.
  3. Set boundaries. We must know how much we are willing to and capable of investing, and how much we allow our financial decisions to be influenced by our values. Striking a balance is very important for making the right investment choices. This depends on numerous factors including personal goals, financial situation, investment experience and personality.

In a world that is facing enormous sustainability challenges, this is extremely important for our future collective wellbeing. Invested wisely, and our assets can directly drive positive impact in the causes we care about. Areas that urgently need our attention include environmental issues, such as climate change and pollution; societal issues such as healthcare and access to food and clean water; diversity issues such as workplace discrimination; and business issues such as bribery and corruption.

For a more sustainable world, more women investors need to become active, responsible investors. Ambitious women who want to grow their wealth without compromising on their values can now join the growing community of investors who want to create a better world for current and future generations. 

Jessica Robinson is founder and managing director of Moxie Future, a Hong Kong-based responsible investment consultancy. 

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