Why it makes sense to invest in companies with a healthy gender balance

Sustainable investing – where investors focus on socially conscious investments that aim to build a better world – has been gaining traction over the past few decades.

In 2016, one dollar in every five was invested ethically, totalling $8.7 trillion (Dh31.95tn), according to the SIF Foundation, the Forum for Sustainable and Responsible Investing based in Washington.

And there is a healthy appetite for investments that focus on ESG – environmental, social and governance – investments in the UAE. According to a 2018 UBS Investor Watch study of high net worth investors, 93 per cent of respondents in the UAE believe they are not giving up performance by choosing a sustainable investment, against a global average of 82 per cent.

Within the broader sustainable category are specific themes such as gender lens investing, which involves companies with a healthy workplace diversity or that focus on products, services or social programmes that help women and girls.

A 2017 sustainable investing study from Swiss bank UBS found that companies in the FTSE Developed World Index where women made up at least 20 per cent of the board and senior management had higher returns than their less gender-diverse peers. In addition, firms that retained more than half of their female managers through to senior management had higher returns than those that lost more than 50 per cent of their women in management.

Here, Rachel Whittaker, head of sustainable investing equities and strategist in the Chief Investment Office at UBS who was in Dubai recently, explains why there is value in considering gender diversity in investment decisions.

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