// . //  Insights //  Companies Ignoring Gender Diversity In Net Zero Strategies

This article was first published by Investment Week on October 26, 2021. 

Whilst more than a fifth of major corporations have pledged to reach net-zero emissions by 2050, few actively include or consider women in their climate action decisions and plans, new research shows.

The Oliver Wyman Forum and 30% Club on The Climate Action Gender Gap report revealed that although diversity and climate are top priorities for CEOs and boards of directors, almost none have considered how linking the two management priorities could accelerate their transition to net zero emissions.

"As our research and interviews with more than 20 companies progressed, it became clear that not only are women largely excluded from most high-level government and corporate discussions on climate, their role as change-makers is largely unrecognised and underestimated. Yet businesses need to include female colleagues, customers and investors if they are serious about meeting net-zero carbon emissions by 2050," the report said.

Female investors are almost twice as likely as their male counterparts to say it is important for the companies they invest in to integrate ESG factors into their policies and decisions

The research also showed that women are the most likely change-makers for climate in economic areas from corporate leadership to product development. Female investors are almost twice as likely as their male counterparts to say it is important for the companies they invest in to integrate ESG factors into their policies and decisions.

Another issue is the underrepresentation of women at many leading companies. In the FTSE 250, there are only nine female CEOs (4% of the total) and 29 female CFOs (12% of the total). At S&P 500 companies, women hold just 6% of CEO positions. And a barometer of women in director positions indicated that in 2019, representation in Germany was 33%, in Japan 8.4% and in India 15.9%.

There are especially few senior women in the six highest carbon-emitting industries: energy generation, mineral and metal, mining, manufacturing, agriculture, transport, and construction. These sectors together account for 80% of the emissions reductions needed by the end of 2030 to prevent global temperatures from rising more than 1.5 degrees Celsius above pre‑industrial levels.

"Gender representation is important for companies with climate targets, as there is evidence that women in leadership positions contribute to climate goals. Women in government positions are more likely to sign on to international treaties to reduce global warming than men," the report highlighted.

The research also mentioned that women are also significantly more likely than men to recognize that climate action requires major lifestyle changes. On average, 75% of women consider the environmental impact of their purchases when they believe that it has a big effect on climate change, compared with 64% of men, according to one survey.

Other past studies have shown that women are slightly more likely than men to be concerned about the environment and that they have stronger pro-climate opinions and beliefs.

The Oliver Wyman Forum and the 30% Club on The Climate Action Gender Gap said companies can speed up the race to net zero by considering three roles:

  1. Climate action leaders: More women should be in leadership positions. They are often more open than men to changes that will drive climate action but are underrepresented in decision-making positions, especially in carbon-intensive industries;
  2. Climate-lens investors: Climate solutions require large-scale investment. Women are growing in importance as investors who have a stronger preference than men for investing that prioritizes environmental, social and corporate governance (ESG) factors;
  3. Low-carbon product influencers: To persuade consumers to buy more low-carbon products, corporations should consider women's preferences more closely. Women make a large proportion of household purchase decisions in areas that generate high emissions, such as food, travel and energy. They are also more likely on average than men to change their habits in ways that contribute to emissions reduction.

Climate action and gender equality is one of the topics being discussed at COP26, in Glasgow. A coalition of feminist groups has called for women to play a greater role at the summit, as the needs of women and girls are being overlooked amid the global climate crisis.