Investing in women has several business benefits--from financial performance to innovation. And companies have made a significant progress on equality in recent years. But are we doing enough to empower women while building business value globally?
By Sahba Sobhani, interim head of Business Call to Action and Nazila Vali, knowledge and partnership lead
Let’s be honest. In the world of development, the private sector has not always been our partner of choice in the race to achieve gender equality. There has been a perception that business actions in this area are merely front-line measures or meagre efforts that simply impose quotas on boards of directors. These assumptions--if at all reflective of a past reality--are today less and less accurate. The private sector is increasingly interested in this issue because it makes business sense, and the time has come for governments, donors and others to move closer to the private sector to enhance their impact on gender equality and women's empowerment.
Women participate in all aspects of the economic world. For the private sector, investing in women brings several benefits such as risk reduction, supply chain stability, financial performance and innovation. One in three private sector leaders reported that profits increased as a result of efforts to empower women in emerging markets. The empowerment of women simply cannot be considered as a niche subject any more that only concerns leaders or teams dedicated to sustainable development. One in three private sector leaders reported that profits increased as a result of efforts to empower women in emerging markets.
Today companies are taking concrete steps to empower women, contributing to closing the gender gap while building business value.
The benefits of equality, for everybody
Take Mahindra Home Finance, a financial institution that provides cost-effective and flexible home loans tailored to low-income earners in India. India, country still struggling with serious gender imbalance, could increase its GDP by 27 percent with equal numbers of women in the workforce.
Mahindra has always been a customer-focused company, abiding by their motto ‘doing well by doing good’. This includes consistently monitoring to ensure their initiatives are having the right effect. It did not take long for Mahindra to realize that a joint spouse decision about whether to take on a loan--rather than just from the husband--had long-term benefits for their business. When the wife is a co-applicant, she acts as a risk mitigation measure, advising her husband on their ability to take on a loan. The policy also helped to break down outdated cultural perceptions that women were not financial decision-makers. And a loan does well if both key household members are equal owners. Mahindra became one of the first financial institutions to make it mandatory for all loans to be signed by both spouses--a change that was adopted by an Indian government programme.
These policy decrees are practical and important because they increase repayment rates. And when supported by regulations they are more widely adopted. Gender equality persists in India, even in the face of economic growth, so these policies are increasingly needed to give women power and responsibility.
You can find many successful examples of inclusive businesses like Mahindra working to close the gender gap. Our recent Business Call to Action (BCtA) report, Women’s Economic Empowerment and Inclusive Business: Opportunities for Growth and Impact, lists seven areas that have the potential for significant long-term economic benefits for businesses and the global economy. These provide opportunities for any inclusive business, regardless of their industry, and are accompanied by examples from BCtA member companies.
The importance of data
At BCtA, gender equality and women’s empowerment are at the core of our efforts to realise the Sustainable Development Goals (SDGs). To help inclusive business do its part to achieve SDG 5 on gender equality and women's empowerment we have been strengthening our impact measurement and management approach which feeds into a growing body of evidence for companies. Starting by encouraging businesses to actively reflect on their gender impact, we are working to identify key indicators and strengthen their collection and use of gender data. With new data points constantly emerging on the benefits of investing in women, more and more businesses are shifting from the moral case to a business one. We can unlock the innovative potential of businesses in thinking about how they can encourage gender equality.
More research remains to be done on understanding the position of women at the bottom of the economic pyramid, the barriers they face, their most pressing needs and aspirations, as well as the greatest opportunities. The digital era has opened new opportunities for inclusive business to contribute more significantly to gender equality. Building on the digital revolution, the Fourth Industrial Revolution could improve female participation in economic life and improve the economic and social autonomy of women.
We look forward to joining UNDP, UN Women and other leading organizations at the Tunis Forum on Gender Equality later this month. We’ve come a long way but a lot more should be done. We are pleased that both business and beneficiary representatives from two BCtA companies, Sehat Kahani and Big Chefs, will be speaking at a panel. Big Chefs is a popular Turkish restaurant chain that has committed to ensuring that at least half of all its suppliers are women, while Pakistan-based Sehat Kahani is using telemedicine to link female healthcare providers with female patients in underserved communities. Both are truly inspiring businesses and can show the way for others, so low income women can realize their dreams of a better future for themselves and their families.
Photo Credit: UNDP India