By Katherine Fritz, Genevieve Smith, & Marissa Wesely

Over the past decade, the private sector has increased its engagement with women’s empowerment and gender equity. More companies have begun to invest in gender-related policies and initiatives, and the quality of that engagement has improved for those in the vanguard of this work. Corporations are getting better at identifying where the status of women is material to their business—as board members, employees, suppliers, customers, and distributors, and as members of the communities in which they operate. This recognition is resulting in greater investments to establish gender pay equity, remove barriers for women to advance to senior leadership positions, source from women-owned businesses, improve the skills and capabilities of women workers, develop unique products for women consumers, implement community initiatives to address gender-based violence, and more. For many companies, uprooting gender inequities across the value chain is now considered both good for society and good for business.

Yet, still, only a fraction of Fortune 500 companies are addressing gender-based issues and opportunities. What’s keeping most companies on the sidelines?

Thirty years ago, environmentalists asked the same question. Today the case for building environmentally sustainable businesses is undeniable, and there is a strong global movement of corporations that have made public commitments to environmental stewardship. Indeed, almost half of Fortune 500 companies (48 percent) have at least one climate change or clean-energy target.

This work is ongoing, but it is not too early to explore what we can learn from the successful integration of environmental sustainability across corporate value chains. How can we adapt the approaches used in that effort to build a similar movement to eliminate gender disparities?

Critically, many companies and investors recognize that environmental issues are material to business and that environmental sustainability represents a competitive advantage central to long-term success. Indeed, over the past decade, companies have sought to analyze the business implications of adverse environmental impacts from their activities, as well as dependencies on fragile ecosystems. With support and guidance from NGOs, governments, and other partners, a handful of companies have been developing and implementing sophisticated data collection, management, and analytics for tracking and quantifying impacts related to a wide range of climate-smart business practices. (See, for example, Kering’s Environmental Profit & Loss tool, which allows companies to calculate the monetary value of their environmental footprint).

We argue that eliminating gender inequities and advancing women’s opportunity and empowerment is equally material to companies’ competitiveness and sustainability. Unfortunately, companies aren’t collecting data—nor does enough research exist—to adequately back materiality arguments for gender equity across industries and the value chain. As with the environment, gathering more evidence would likely drive future private sector investment; it could encourage companies already investing in women to do more, heighten demand from investors, and encourage companies sitting on the sidelines to get involved.

The Sustainability Accounting Standards Board (SASB) has made some headway by highlighting that diversity and inclusion in certain industries is material for investors and should therefore be disclosed in 10-K filings. While this is a good start, it limits the materiality conversation to women as employees in certain industries, not fully accounting for the true potential business value of addressing gender issues and opportunities throughout the value chain.

Until companies and investors recognize gender equity and women’s empowerment as important competitive and sustainability issues, and evaluate where and how they have a material impact in their value chains, they will not embed progress markers into their business models and will limit resources to address these issues to corporate foundation and corporate social responsibility (CSR) department budgets. At the same time, the companies that drive innovation in building this business case will likely become the leaders of the most sustainable businesses in the 21st century.

So, how can we better understand the business impacts of gender equity and women’s empowerment across the value chain?

Taking a page from the corporate environmental sustainability playbook, we should look at how gender issues impact risk, productivity, and growth. Gender impacts these factors in different ways and to different extents depending on the industry, company, and value chain segment.

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