In 2016, I published an article in the Huffington Post with an almost identical title. Since that time, this thesis has only grown stronger; having women in leadership roles, and in particular on boards of directors, is one of the best ways for organizations to further their sustainability or ESG (Environment, Social, Governance) initiatives.
Women make over 85% of all purchasing decisions, which is why companies who market products or services that support sustainable practices—environmental or social—have found a more attentive and discerning customer in women. In the U.S., women hold 60% of the country’s personal wealth, and that number is growing twice as fast for women as it is for men. Beyond their buying strength, women are also more conscious consumers and more likely to buy products marked with a “sustainability” seal. In a recent consumer report published by Fair Trade Certified™, 53% of women said they would be more likely to purchase a Fair Trade Certified product compared to 47% of men.
According to the recent Girl Power Marketing report, 91% of women say advertisers do not understand them or their needs. This customer segment (women) accounts for $7 trillion in consumer and business spending, so having more women leading the design, production, and marketing of products catered to women is not just common sense—it’s better business.
Boards with more women have better ESG performance
But it’s not just design, operations, or sales and marketing leadership that matters. Greater female board representation leads to more robust and active ESG programs and better performance. In fact, in a study led by BloombergNEF and the Sasakawa Peace Foundation, a direct correlation was determined between gender diversity, climate performance and innovation in business. That study found companies with at least 30% of women on their boards are outperforming their peers in climate policy and transparency.
Similarly, the 2021 Sustainability Board Report concludes that women are driving the board-level conversation on sustainability, with 52% of women on boards surveyed being “ESG conscious” versus 36% of their male counterparts. Finally, the most recent MSCI study on gender diversity on boards found that companies with sustained board diversity (companies that currently have at least three women directors who have served for at least three years) had stronger reductions in carbon-emissions intensity than their sector peers and were more likely (16% versus 6.3%) to have environmental targets linked to executive compensation.
An opportunity to raise our collective ESG efforts
There is an opportunity in ESG—right now—to recognize how environmental, social, and economic initiatives are interconnected, and how impact in one area can produce positive outcomes in another. By recognizing that ESG is a journey which requires a long-term view, these connections—governed through corporate performance and reporting—become more evident. Gender equity is a great example of this, because while seemingly a social issue, study after study has proven the connection with better environmental and economic performance.
As you think about celebrating Earth Month and Earth Day this year, remember that one of the best things you can do for the planet is to commit to having more women in leadership roles and on your board of directors.
