• Published: 16 March 2020

Why are financial institutions missing opportunities in addressing gender issues?

Discussions around gender pay gaps, lack of women in senior positions, and discrimination against women in the workplace are all now very common. There is also a buzz around notions of sustainable finance and a growth of financial instruments related to social and environmental issues. And yet, the financial sector continues to fail to take gender into account in their investment decisions.

Whilst gender pay gaps, discrimination and harassment of women increases amongst vulnerable and marginalised women, the financial sector continues to ignore how many of its investment decisions can impact women (positively and negatively). In particular, they fail to consider women subject to low-incomes, those from ethnic minorities and indigenous communities, and those with disabilities.

With gender very much on the agenda of business, the financial sector has an important role to play in linking financial decisions, not just to potential fees and profits, but also to addressing structural inequalities across multiple sectors that prevent women from benefitting as much as men.

In Asia, in particular, financial institutions have been slow to recognise the particular challenges that women face, often compounded by ethnic discrimination, poverty and cultural norms. Whether as direct employees of businesses or to be found along supply chains, the financial sector can do more to reduce the negative impacts of investments on women and expand investments that can help women’s economic and social empowerment.

Policy assessments completed of commercial banks by Fair Finance Asia, demonstrate weak adoption of gender-equality specific criterion in investment decisions. Even where gender issues are considered, they are often limited to internal considerations of gender equality, and prohibition of sexual harassment within the institution itself. Broader investment decisions commonly remain gender blind.

In Thailand, of the nine banks evaluated by the Fair Finance Guide Thailand, only two made mention of gender in their ESG policies. In India, eight banks were evaluated on their policies. Of these, only five mentioned gender but this was restricted to sexual harassment and discrimination internally. Whilst these criteria might be important in promoting gender equality in the workplace, they do not consider risks and opportunities pertaining to women in a company’s activities or its supply chain.

Through the consideration of gender issues in investment decisions, financial institutions have the potential to promote the adoption of socially responsible practices in sectors where they lend or invest. Neglecting to evaluate the effects on gender can have significant detrimental impacts on women and girls in projects and pose operational and reputational risks to companies and financial institutions alike.

But not only are financial institutions performing poorly on managing risks associated with gender issues, they are missing a huge opportunity by not considering the needs and aspirations of women impacted by their investment practices. We know that the economic empowerment of women is central to the development process, we know that women make great entrepreneurs and we know that women are able to grow whole communities through cooperative ventures. Yet investment decisions are driven more by spreadsheets than by the potential impact they can have on people.

Now is the time for financial institutions to recognise that they have a critical role to play in contributing to gender equality and promoting gender issues within financial practices. This involves assessing project implications for women and men, ensuring that women’s aspirations, concerns, and experiences are included in the design, implementation and monitoring of a project. Financial institutions that remain gender blind will ultimately be punished by customers, communities and even their own shareholders.

Recognizing the gender dimensions investments and advancing inclusion through application of a gender lens, can increase social benefits, reduce conflicts with communities and make projects more inclusive, efficient and profitable. Applying performance indicators to track gender issues associated with investment criteria will support transparency and accountability across sectors. They will help to reduce risks and increase opportunities for women. Institutions that fail to think about gender will fail to thrive in a world where stakeholders are increasingly concerned about social impact as well as financial performance.


For further information, contact Fair Finance Asia or ELEVATE’s Sustainability Consulting team


This blog was originally published by Fair Finance Asia, a regional network of 25 Asian civil society organizations committed to ensuring that financial institutions’ funding decisions in the region respect the social and environmental well-being of local communities.


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