In Latin America, sustainability means gender equality
A host of up-and-coming women are taking their passion for the environment to the boardrooms
By Michael Molinski
(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.)
SÃO PAULO (Callaway Climate Insights) — Denise Hills is a fighter. As the global head of sustainability at Natura, she fights for climate change. She fights to protect the Amazon. She represents women and the environment to the United Nations. And she fights for investors.
“The companies that pay more attention to the environment and ESG policies are going to be the companies that investors look to in the future,” Hills said. Meeting and establishing environmental, social and governance policies “are now a major risk that companies must follow, and essential to their profitability,” she said.
Natura & Co. Holding (NTCO) is one of the world’s leading manufacturers of natural cosmetics and toiletries, which it distributes through its flagship Natura, Aesop, The Body Shop, and through its largest and most recent acquisition, Avon.
Hills is one of many up-and-coming women that are taking their passion for the environment to the board rooms and management across Latin America.
And it’s working.
“As early adopters of new agricultural techniques, first responders in crises and entrepreneurs of green energy, rural women are a powerful force that can drive global progress,” UN Secretary General António Guterres said in 2019 for the International Day of Rural Women.
“One of the most effective ways to achieve progress on the threats posed by climate change is addressing gender inequality,” he said.
Gender equality and climate change go hand-in-hand
Latin American women have been closing the gap compared to the rest of the world when it comes to gender equality. For example, Latin American women have the highest percentage of women in scientific research at 44%, versus 28% for the rest of the world, according to UNESCO.
And an increasing number of those researchers are entering environmental fields. Women tend to “have greater capacity to respond to climate change and they play important roles in adopting low-carbon technologies, spreading knowledge about climate change, and urging action,” Guterres said.
This is not to say that Latin America doesn’t have issues — and exceptions — when it comes to gender equality.
In Mexico, less than half of women of working age participate in the labor market, said Angel Gurria, the secretary-general of the Organization for Economic Cooperation and Development in a speech at a conference in 2020 on Gender Equality and the Empowerment of Women for Inclusive Growth in Mexico. “This is the second lowest rate of all OECD countries, and much lower than the rate for Mexican men active in the labor market, which is 82%.”
Women are leading ESG investors
In ESG investing, gender equality also plays a strong role when it comes to labor, management and the make-up of corporate boards, which fits into the S and G in ESG. A higher ESG ranking can position a company to gain access to a large pool of ESG investors, and can lead to higher profitability and help it avoid the risks involved with environment, regulatory and human and labor rights.
Leading the push on ESG policies are women like Mexico City Mayor Claudia Sheinbaum Pardo, a biologist and environmental engineer and an active proponent of climate change.
She was instrumental in creating Mexico City’s first bike path and improved mass transit with Metrobus, widely seen as helping to reduce emissions and reduce traffic congestion. Lately though, she has caught criticism for defending President Andrés Manuel Lopez Obrador, a member of Sheinbaum Pardo’s own party, for not doing enough to contain the coronavirus.
Lopez Obrador has publicly said he would not restrict mobility or require the use of face masks. That policy is difficult to enforce for a scientist like Sheinbaum Pardo, who won the Nobel peace prize in 2007 for her work on the UN Intergovernmental Panel on Climate Change.
Research by S&P Global about how gender fits into ESG also showed that firms with high gender diversity on their board of directors have been more profitable and larger than firms with less gender diversity. Nonetheless, the study found female executives remain grossly underrepresented in the C-suite and discrimination and misconduct remain pervasive.
Yet the number of female ESG investors is growing. A survey in 2020 by Responsible Investor and the Sustainable Finance Network showed the ranks of men and women in the business of sustainable finance is almost equal. And a 2019 study by BMO Wealth Institute found that women, who control half of the private wealth in North America, are a driving force in deploying that money through an ESG lens. According to research from Morgan Stanley, 84% of women expressed interest in sustainable investing, compared to 67% of men.