By Katja Iversen | KPMG | 25 January 2018
When the world invests in girls and women, there is a ripple effect that benefits families, communities, countries AND economies.
This week, business and political leaders, economists, academics and NGOs have been meeting in the mountain village Davos for the 48th World Economic Forum Annual Meeting. They’ve been discussing some of the leading issues affecting our world – conflict, economic uncertainty and political and social discord, just to name a few.
If these leaders want to put the world on a good path and get a good return on their investments, they must invest in girls and women.
We know that when the world invests in girls and women, there is a ripple effect that benefits families, communities, countries AND economies.
For example, if another 600 million women had access to the internet, annual GDP could increase by as much as US$18 billion across 144 developing countries.
If we integrated contraceptive services with maternal and newborn health services in the developing world, we would see a net savings of US$6.9 billion. Preventing gender based and sexual violence would yield billions more for the global economy.
And according to McKinsey, if women participated in the economy on an equal footing to men, they would add as much as US$28 trillion to the annual global GDP by 2025. That’s not short change, but the equivalent of the combined GDP of the United States and China, the world’s two largest economies.
The evidence is equally as compelling when we look at investing in women at an individual business level.
A recent study of companies across 91 countries showed that having women occupy at least 30% of leadership positions added 6 percent to net profit margins.
Another study by Gallup linked gender diversity in corporations with positive business metrics such as productivity and high employee retention.
And a 2015 study found that companies performing in the top 25% for gender diversity were 15 percent more likely to see financial returns above their respective national industry medians.
Holding back half the population from achieving their full potential is not right, and simply does not make good business sense.
Yet despite the evidence that investing in girls and women is good for people, economies and businesses alike, far too many women still struggle to find their equal pay and place in the boardroom, or have pay parity with male colleagues at every level of work across the world. We also know that many women can’t own the very land they work so hard to cultivate, let alone earn and control their own independent income. And far too many women don’t have control over their own bodies, impeding their opportunities across the board.
So how do we address the barriers around women’s economic empowerment, knowing that it would benefit women, businesses and economies?
A concerted global effort is needed to advance gender equality. The World Economic Forum is setting the right tone with a bigger focus on gender in the formal program, and all women co-chairing the meeting.
But the business and governmental leaders attending Davos need to take it down the mountain and into their own businesses, policies and programs.
From the political leaders, we need commitments to invest in girls and women at home and around the globe. These investments can come in the form of dollars - both overseas development aid and national investments - but also via changing national legislative barriers in the way of economic empowerment, education and health, including reproductive health, for girls and women. For example, the World Bank found that 90% of the countries covered by its research had at least one law limiting women’s economic participation. Laws are restricting women from certain types of professions, hindering their freedom to travel outside the home or country, or constraining their ability to inherit or own land.
For the business leaders, I would urge every company to drive change in the areas where it has direct control. Women Deliver collaborated with BSR and the Dutch Ministry of Foreign Affairs to release a framework on business action on how to invest in women in the value chain. The framework provides guidelines on how businesses can work together with governments, unions, NGOs, business partners and other key stakeholders to advance women’s health, rights and wellbeing – to the benefit of both women and business.
The framework suggests numerous ways that companies should begin to address gender equality and invest in women, from bringing more women into leadership positions, to providing equal pay for equal work, to creating fair parental leave policies, to providing health care and developing programs to address violence and harassment in the workplace, to ending stereotyping in marketing. Business leaders can create a more gender equal world, and benefit their bottom line.
And many already are.
Mobile companies, for example, saw an opportunity to expand their customer base when they realized 300 million fewer women own a mobile phone than men. These companies not only saw an untapped market, but also saw an opportunity to help women access information, acquire new skills, and increase their incomes through online marketplaces to sell goods and handicrafts.
Companies are also addressing gender equality through advertising. Procter & Gamble has worked to change the narrative around menstruation and build girls’ confidence through their Like A Girl campaign. And in 2016 Unilever made a commitment to stop stereotyping in their advertising, instead showcasing women as strong, smart and leading. Of their commitment, Unilever’s Chief Marketing and Communications Officer said, “This is not a moral issue, it’s an economic issue.”
I would go a step further and urge the leaders attending the World Economic Forum at Davos this week to see it as both.
Investing in girls and women is not only the right thing to do, it’s the smart thing to do.