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June 29, 2004
Calvert Group Launches Code for Corporations to Profit by Promoting Gender Equality
    by William Baue

Calvert links equality for women to sustainable development, making the ethical and business cases for implementing its corporate code of conduct for empowering women.

The noted medical anthropologist and infectious disease specialist Paul Farmer once asked a Haitian woman how to stop the spread of HIV.

"Give women jobs," she answered.

In other words, empowering women economically helps solve the problems created by women's poverty, or what United Nations (UN) Secretary-General Kofi Annan calls the "feminization of poverty."

The Calvert Group, the largest family of socially responsible investment (SRI) mutual funds in the US with $9.9 billion in assets under management, is extending this same logic to the corporate realm in launching the Calvert Women's Principles. Unveiled last week at UN Headquarters in New York City in collaboration with the UN Development Fund for Women (UNIFEM), the principles are a set of guidelines for corporations to promote women's economic empowerment.

"The Calvert Women's Principles constitute the first global code of conduct for corporations focused exclusively on empowering, advancing, and investing in women worldwide," said Barbara Krumsiek, president and CEO of Calvert.

Why focus on corporations to address this social issue? Two interrelated reasons.

First, corporate structures currently institutionalize and exacerbate gender inequities. To support this assertion, Calvert points out that women occupy less than three percent of the top executive posts in the largest corporations worldwide, while on the other end of the ladder there is a 90 percent chance that a woman put together your palm pilot. Reforming corporate structures can transform women from being victims of entrenched gender bias and discrimination to being actors who help bring about their own economic and social empowerment.

While this reason is clearly compelling for social justice advocates, it is the second reason that will likely convince capitalists: Calvert asserts that reversing corporate gender inequality is good business.

"There is a strong business case and a strong economic case for gender equality," said Ms. Krumsiek. "As a result of gender inequities, women remain--to some degree in all parts of the globe--an untapped economic resource and an under-utilized economic asset."

"The Calvert Women's Principles recognize that women are economic actors and productive assets, and that empowering women is a key to sustainable development around the globe," she added.

Corporate failure to promote gender equality represents not only a missed opportunity but also a significant risk, exposing themselves to potential liabilities such as lawsuits over sex discrimination. For example, two days before the launching of the Calvert Women's Principles, a judge granted class-action status to a suit alleging that Wal-Mart (ticker: WMT) systematically underpays women. The decision extends the case's scope from six to 1.6 million women working for the discount retailer since December 1998, making it the largest employment-discrimination action ever.

Implementing the Calvert Women's Principles would help avoid such costly risks. The principles make specific recommendations in seven broad categories, including disclosure, implementation, and monitoring; community engagement; management and governance; education and training; and supply chain. For example, the employment and income category calls on companies to "establish pay equity policies that pay comparable wages and benefits, including retirement security benefits, to men and women for comparable work." The health, safety, and violence section asks companies to "ensure that women's health and safety, including reproductive health, are protected" and to "prohibit discrimination against women with health problems, including individuals with AIDS/HIV-positive status."

"The Calvert Women's Principles will provide a concrete set of indicators for tracking the progress of gender justice in the corporate community," said Noeleen Heyzer, executive director of UNIFEM.

In addition to providing benchmarks for both corporations and shareowners, the principles also present auditing and verification guidelines for monitoring compliance. Calvert intends to issue ratings of companies based in part on their commitment to the principles, to integrate the Principles into its own social and environmental screening criteria, and to pursue shareowner action with companies around the principles.


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