Gender, ESG, and Financial Firms
By Alexandra Roberts ‘25
Recently for my seminar on Ethics in Finance, I had to research and find an ethical role model in the field of finance. I searched for hours and found an interesting trend: the number of women in ESG and impact investing roles was much larger than any other part of the finance world. I was prompted with a few questions: What role does gender play in investing? How have women continued to implement ESG measures within their roles in finance? What does the future look like for increased gender diversity along with ESG measures across financial firms?
These questions are first answered with a careful look into the increased amounts of female clients for financial firms. According to an RBC Wealth Management Study, female clients were twice as likely as male counterparts to prioritize ESG measures into their policies and decisions. Due to their stronger sense of purpose, women tend to invest according to their values, making decisions that are best for their children and family. ESG is the perfect path to align these ideals with the increased desire for women to enter into the financial world. Even though this has been slowly happening with more women being primary breadwinners and high-net-worth individuals, the estimated projections show that by 2030, women are estimated to control two-thirds of all the wealth in the U.S, making them a significant factor in the way wealth will be allocated.
Next, we look from a firm perspective. Women make up a large portion of senior ESG roles. Previously, women were rarely in the front line of finance fields. The amount of female managers has moved slowly; however, this is the reverse for ESG investing. Many firms thought impact investing would continue to be a niche aspect of their business, but as it turns out, it could not be more relevant in today’s society. Women filled these positions at the start not only because of their attractiveness to the space, but the higher level positions they were able to find. As these parts of the firms continued to produce higher returns, ESG continued to show longevity, proving the benefit of gender diversity within managerial positions. Female CFOs continue to increase, adding ESG aspects to firms across the world while also increasing profits significantly.