Insights

Gender (in)Equality and COVID-19

By November 26, 2020 No Comments
By Julia Bailey
Julia Bailey

Gender Equality, Sustainable Development Goal (SDG) 5, continues to pose a challenge both in Australia and globally. Gender Equality is not only a human right that creates safer and healthier communities but has also been proven to be economically beneficial1 by boosting productivity and economic diversification. Political leadership is specifically targeted within the Gender Equality SDG with the aim of improving representation of women in decision making roles. Some progress has been made over recent years, but the COVID-19 pandemic has jeopardised this progress on a number of fronts.

Gender Equality is one of Melior’s Key Strategic Advocacy Themes with which we are engaging with Corporate Australia. Progress towards SDG 5 is currently rated as facing “significant challenges” on Australia’s SDG dashboard. In addition to tracking our portfolio vs the ASX300 on a number of gender KPIs on a quarterly basis, we are also focused on achieving two Gender Equality absolute targets over the longer term;

  • a published pay gap for all employees of less than +/-5%, and
  • 40% female: 40% male: 20% either gender representation at executive leadership level3.

Limited gains in gender equality and women’s rights made over the decades are in danger of being rolled back due to the COVID-19 pandemic … I urge governments to put women and girls at the centre of their efforts to recover from COVID-19. That starts with women as leaders, with equal representation and decision-making power

António GuterresUN SECRETARY GENERAL APRIL 2020

Limited gains in gender equality and women’s rights made over the decades are in danger of being rolled back due to the COVID-19 pandemic … I urge governments to put women and girls at the centre of their efforts to recover from COVID-19. That starts with women as leaders, with equal representation and decision-making power

António GuterresUN SECRETARY GENERAL APRIL 2020
By Julia Bailey

Gender Equality, Sustainable Development Goal (SDG) 5, continues to pose a challenge both in Australia and globally. Gender Equality is not only a human right that creates safer and healthier communities but has also been proven to be economically beneficial1 by boosting productivity and economic diversification. Political leadership is specifically targeted within the Gender Equality SDG with the aim of improving representation of women in decision making roles. Some progress has been made over recent years, but the COVID-19 pandemic has jeopardised this progress on a number of fronts.

Gender Equality is one of Melior’s Key Strategic Advocacy Themes with which we are engaging with Corporate Australia. Progress towards SDG 5 is currently rated as facing “significant challenges” on Australia’s SDG dashboard. In addition to tracking our portfolio vs the ASX300 on a number of gender KPIs on a quarterly basis, we are also focused on achieving two Gender Equality absolute targets over the longer term;

  • a published pay gap for all employees of less than +/-5%, and
  • 40% female: 40% male: 20% either gender representation at executive leadership level3.

Gender Pay Gap Remains A Significant Challenge

Gender Pay Gap is an area where significant challenges remain in achieving Gender Equality. According to WGEA’s latest gender equality scorecard released today, Australia’s full-time base salary gender pay gap is 15% with women earning on average $15,144 per year less than men4. When total remuneration is considered, the gender pay gap is even greater at 20.1%. Gender pay gap is influenced by a number of factors including discrimination and bias, under-representation of women in senior roles, and women spending a greater amount of time doing unpaid caring and domestic work. Unlike the UK, where gender pay gap reporting was made compulsory in 2017 for companies with more than 250 employees, disclosure is not mandatory in Australia and the majority of ASX300 companies do not disclose pay gap. A Harvard Business Review5 study published in 2019 found that in companies with mandatory disclosure the gender wage gap shrank.  In the UK, the pay gap has fallen from 18.4% in 2017 to 15.5% in 20206. Consequently, as one of our 2030 absolute targets, we are advocating for all companies to publish a pay gap for all employees of less than +/- 5% by 2030.

Source: WGEA

Melior’s ASX300 Gender Benchmark Shows Some Progress in FY2020

The availability of reliable and consistent data poses a major challenge to achieving these gender goals. A number of organisations report gender-related data across ASX200 companies. However, ASX300 data around both gender representation and pay gap is not readily accessible. In response to this, Melior built a Proprietary ASX300 Gender benchmark which enables us to track progress towards the gender representation target by reporting on the percentage of women in executive leadership7 and board positions. We now plan to extend our gender benchmark to also include pay gap data.

In terms of gender representation, our FY2020 benchmark shows year-on-year improvement. The benchmark found that the percentage of female employees across the ASX300 remained relatively stable at ~40%. However, female representation on executive teams improved from 23% in FY2019 to 25% in FY2020. The percentage of female directors on boards also increased from 23% to 27%.

Female representation at different levels of ASX300 companies

Source: Melior Research, WGEA data, company websites

This improvement is encouraging although female executive and director measures still fall short of Melior’s 2030 and Chief Executive Women’s (CEW’s) 40:40:20 target. Concerningly, CEW’s 2020 Annual Census of ASX200 companies found that the number of female CEOs fell to 10 (or 5%), down from 12 in 2019 and at the lowest level since the CEW Census began four years ago.

The Impact of COVID-19 on Gender Equality

The impacts of COVID-19 have been and continue to be extensive affecting all sections of society, the economy, families and people’s ability to work.

The UN Department of Economic and Social Affairs describes how the COVID-19 global crisis is disproportionately affecting women and girls around the world:

  • Women account for 70% of frontline health and social workers and are therefore highly exposed to the disease,
  • Lockdowns implemented to curb the spread of the virus have increased instances of physical, sexual and psychological violence against women and girls, and have curbed access to essential sexual and reproductive health services, and
  • Women who already spend around three times as many hours in unpaid domestic work as men, are bearing additional household burdens, such as caring and home schooling, during the pandemic8. We note that this figure is lower in Australia at around twice the number of hours, however this still demonstrates a clear unpaid work burden on women.9

A recent study from the Melbourne Institute10 found that women aged 18-24 are more likely than men to report losing their job due to COVID-19. This reflects women’s greater representation in industries most affected by the pandemic, such as hospitality, leisure and retail, and in insecure, casualised and low paid work, plus their increased caring responsibilities during the pandemic. Recent vaccine developments provide hope that there will soon be a recovery from the pandemic’s impact on female workforce participation but until there is a widely available vaccine, challenges and ongoing uncertainty will continue.

Causes of unemployment among Australians aged 18-24 by gender

Source: The Melbourne Institute

Female Politicians are Critical to the Pandemic Response

SDG Subgoal 5.5 specifically targets representation of women in decision making roles. The SDG Report 202011 found that as of 1 January 2020, female representation in national parliaments globally is 25% and in Australia is 31%, which translates into under-representation of women in pandemic-related leadership roles. This is concerning as it is important that investments in gender equality are included in response and recovery legislation, economic packages and budgets during and after the pandemic.

On a more positive note, this year has seen the announcement of three important firsts for women being appointed into high-profile senior leadership positions which have the potential to influence pandemic responses. In September, Citi announced that Jane Fraser would become CEO in February 2021 marking the first female CEO of a Wall-Street Bank. And earlier this month, were the announcements of Nanaia Mahuta as the first female and Maori New Zealand foreign minister, and Kamala Harris as the first female, black and South East Asian US Vice-President.

It remains unclear what the longer-term impact(s) of COVID-19 will be on female workplace participation in Australia and around the world. The job losses and departures from the workforce due to increased caring responsibilities are deeply concerning. However, the requirements of employers to provide greater flexibility to their staff during the crisis may have positive effects by potentially encouraging more inclusive workplace policies and practices impacting all employees.

Further Developing Melior’s Gender Lens Investment Assessment in Response to COVID-19

ASX300 companies collectively employ ~2 million people in Australia and therefore Melior believes that they have a significant role to play in addressing gender equality. We continue to advocate to companies on the importance and financial and non-financial benefits of gender diversity (and other forms of diversity) in their workforces. We also continue to engage with companies on the processes and policies they have been putting in place in response to COVID-19.

In light of the pandemic and the increase in gender-based violence, we have expanded our Gender Lens Investment assessment (summarised in our thought piece published in December 2019) to include whether companies have domestic violence support policies and strategies. In response to the greater caring responsibilities brought on by the pandemic, we now also include an assessment of whether companies provide employer funded primary AND secondary carer parental leave.

This content is for general information only. In preparing and publishing this content, Melior Investment Management Pty Ltd (ACN 629 013 896, authorised representative no. 001274055) does not seek to recommend any particular investment decision or investment strategy and has not taken into account the individual objectives, financial situation or needs of any investor. Investors should consider these matters, and whether they need independent professional financial advice, before making any investment decision.