Verve Super will become the first Australian superannuation fund to direct its investments towards companies that perform well on gender equality measures.
Launching the Verve Gender Equality Investment Index on Tuesday, the women-led superannuation fund has said it will pursue data driven, gender lens investing and set a new standard of ethical investing for financial institutions.
The gender equality index created by Verve Super will use data collected by the Workplace Gender Equality Agency and will see the superannuation fund construct its investment portfolio based on how companies perform on key gender equality metrics. These metrics include gender pay parity, the number of women in leadership, anti-sexual harassment policies, and commitment to inclusivity and flexible work practices.
Christina Hobbs, the co-founder and CEO of Verve Super, said decades of research have shown that companies that promote gender equality perform better.
“Yet no Australian super fund has previously taken that information seriously in terms of how they invest,” Hobbs said. “That’s a major missed opportunity.”
“Our members know all too well that money equals power, and they don’t want their own super savings invested in companies that are failing women.”
A 2018 study by McKinsey & Company found companies in the top quartile of gender diversity on their executive teams were 21 per cent more likely to experience above-average profitability, and that high-performing executive teams has more women in revenue-generating roles.
Hobbs said it’s not good enough for financial institutions to keep supporting the status quo when it comes to gender equality, and the new approach from Verve gives Australians the chance, through their superannuation, to support the best employers for women.
“With so much frustration about the glacial progress on gender equality at a political level, we’re giving Australians the opportunity to use their collective superannuation power to put pressure on corporates to be better employers for women,” she said.
The index uses standardised data from private sector companies with more than 100 employees, who submit an annual report to the Workplace Gender Equality Agency. While similar gender equality indexes have been established overseas, including by Bloomberg and Impact Shares in the US, no other financial institution in Australia uses a similar investment measure.
Verve Super said it developed the index to identify the top-performing companies on gender equality within the ASX 200, and to direct investment towards them, and also screen out the poor performers. While researching the index, Verve found that 96 per cent of its members thought it was important the super fund invested in companies that are creating good workplaces for women.
Verve will only include companies in its index that report to the Workplace Gender Equality Agency, and can’t include companies on the ASX that don’t report at all.