March 11, 2009
Goal of New Index Series Is to Advance Gender Equality
by Robert Kropp
Pax World and KLD launch an index series sponsored by the International Finance Corporation to
increase gender empowerment.
The timing could not have been more symbolic for the announcement of a new index series developed
by Pax World, a leader in the field of
sustainable investing, and KLD Research &
Analytics, an investment research firm providing tools for the integration of environmental,
social and governance factors (ESG) into investment decisions.
8—International Women's Day—the two firms announced that they have joined to construct the first
Gender Investment Index series for the International
Finance Corporation (IFC), a member of the World Bank Group. IFC's Gender Program provides
financial products and advisory services that increase access to finance for women entrepreneurs
and reduce gender-based barriers in the business environment.
The objective of the five
indices in the IFC Gender Index series, which will use the FTSE All-World Developed Index as the
starting universe of companies, is to increase interest among corporations and investors in gender
Referring to research done by Pax World, Julie Gorte, Senior Vice President
for Sustainable Investing, told SocialFunds.com, "Our review of literature indicates that with very
few exceptions a positive correlation, and in some cases a positive causality, can be found to
exist between gender empowerment and financial performance."
"What we found to be
especially interesting in our research was the positive correlation between gender diversity in
Boards of Directors and senior management and the quality of earnings reported by companies," Gorte
continued. "Sustainability is a robust indicator of high quality of earnings, and gender issues are
very much a part of sustainability."
"Investors really need to have companies report on
issues of gender in the workplace."
The Index series will include large and mid cap
companies that recruit, retain, and promote women. The goal of the Index series is to advance
gender equality and women’s empowerment in the workplace and beyond. The five indices in the series
include a benchmark, three regional indexes, and a global top 100 best performers in gender
empowerment. The Index series is industry and region neutral.