As women increasingly take an active role in their finances, a UBS study revealed that more women (71%) make investing decisions with wider sustainability considerations in mind compared to 58% of men. It's clear that women are the driving force behind this powerful shift.
As women increasingly spearhead a wave of change in the world of finance, it's not just because they make financial decisions based on what's best for their children and family. No, these trailblazing women are looking beyond their own households and making investments aligned with their own values. They're taking into account the impact their money can have on their communities, neighbours, and the planet. So there's no better opportunity for women to shift the status quo than now.
But let's dive deeper into this growing trend amongst women and why women are more likely to put their money where their heart is.
Women are at the forefront of ethical change
According to a Cerulli Associates survey, 52% of women would opt to invest in companies achieving positive social or environmental outcomes, compared to 44% of men who indicated the same preference. It therefore comes as no surprise that at the same time, 34% of the men are motivated by a return on investment with no restrictions to their choices, compared to just 14% of the women.
So let's be real: whilst women have been chasing men in the investment game for way too long, there's a silver lining to the statistics that show women are behind men when it comes to investing more generally. Because when it comes to ethical investing, women have an ethical edge that shouldn't be overlooked.
Unlike their male counterparts who often prioritise profitability over social conscience, many of us women prefer to put our money where our values are. Women seek out companies that are socially responsible and environmentally conscious, because they know that their investments can make a difference in the world.
Women actively seek to fix workers rights and promote sustainable practices
According to the same study by Cerulli Associates, among the ESG themes most important to them: investing in companies that pay their workers a fair/livable wage and backing companies with leading environmentally responsible practices.
Compounding this point further, a study undertaken by WealthiHer Network revealed that 75% of women believe investing responsibly is more important than the returns they generate. In fact, 53% of women said that giving back to their communities stays at the forefront of their mind whilst investing, whilst 63% of the women believed practising philanthropy is important, compared with 56% of men.
"We’re at a turning point in history where women are shattering the stereotypes"
Women are making ESG and ethical investing more popular. Need more convincing?
- About 7 in 10 women agreed that they could achieve better returns with sustainable funds, compared to just 6 out of 10 men.
- 45% of women who held savings or investment products said that they wanted their investment manager to focus on this area, compared to 34% of men.
- 47% of women we surveyed also said they wanted their investment manager to focus on developing and using sustainable materials, compared to 41% of men.
- 48% of women chose climate change as an area to focus on, compared to 42% of men.
Reasons why women seek ethical investment opportunities
So now you’ve seen that women are the economic powerhouses and the driving force behind the rise of ethical investing, it's time to scratch beyond the surface and understand why women are more susceptible to ethical investing choices.
1. Women bear the brunt during economic downturns
Let's face it, when an economic downturn hits, it's the women who often bear the brunt of it. They're the ones who are last hired and first fired. It doesn't matter if you're just as qualified or skilled as the male counterpart you're up against, the odds are stacked against you. In fact, according to Pompeu Fabra University in Barcelona, women are 30% less likely to be considered for jobs. And if you happen to be a mother? The odds plummet to a heart-stopping 36%. But we need to take charge of our financial futures, and that includes investing in ourselves and each other.
2. Women feel the weight of governance more than men
Governance, and the disproportionate brunt women face as a result of it is also another driving force. Look at the gender inequalities women face: they're plagued with inequalities within the workplace, childcare, pay, education and so on. So it's safe to say that a woman is more empathetic towards those who are less fortunate based on their own lived experiences. So by investing sustainably, women can make sure their money goes towards companies that promote inclusivity and equity for all. Plus, they can throw support behind women-owned and -led businesses that are leading the way towards a more equal future.
Women are at a turning point in financial history
As women continue to rise up, demand more and make waves in the world, it's increasingly important women put their money where their values are. Because the research shows that ethical investing is no longer just a buzzword, it's a movement - a movement led by women.
No longer content with chasing quick cash and turning a blind eye to the bigger picture, women know that money talks, and women want to use theirs to support companies that share our values and make a positive impact on society – from green energy to fair labour practices. By investing in companies underpinned by ESG principles, therefore, women can continue to drive positive change for the planet and society as a whole.
So it’s clear that we’re at a turning point in history where women are shattering the stereotypes and forging a financial path of their own – one where meaningful change lies at the centre. Let's keep those cogs turning and pave the way to a more equitable future.