By Oxfam India
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Banking On Gender Equality – Women’s Advancement A Critical Element Of Sustainable Finance

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What have financial institutions got to do with gender equality? Far more than many realize.

The sustainable finance initiative has been underway since the 1990s as a branch of the ‘responsible business conduct’ movement. ‘Sustainable finance’ encourages financial institutions (FIs) not only to fund sustainable businesses or projects – such as green bonds or low-income housing – but also to do so in a sustainable manner, by monitoring and mitigating the negative impacts their own business activities, loans, and investments have on workers and communities. 1

Since the ‘90s, many FIs have taken steps to improve their environmental, social, and governance (ESG) conduct. Governance-level reforms often include creating sustainability teams within boards of directors, while environmental reforms involve choosing to fund green energies, or incorporating environmental measures into standard risk due diligence analyses for new clients and projects.

But FIs are doing less to address their negative social impacts, including on gender equality. Why? Because ‘sustainability’ is often wrongly interpreted to mean just environmental sustainability; because harmful social impacts are a little harder to quantify and mitigate than environmental ones; and because widespread biases against women make many FI directors think women’s equality is neither 1) particularly needful for FIs to prioritize, nor 2) within their power to address.

That is FIs’ big mistake. Let’s explore both of these misconceptions here.

First, gender equality is incredibly worthwhile to prioritize. Not only is gender equality a legal right under international and Indian law, including the Indian Constitution, but it is also a sustainable development goal for its own sake and for the myriad trickle-down benefits it brings to families’ health, educational-attainment, poverty alleviation, and income levels. 2

Further, many don’t realize that promoting gender equality is strongly correlated with high GDP and growth.3 In India, research shows that achieving gender parity would boost India’s GDP by $2.9 trillion in 2025, a full 60 percent more than expected growth under business-as-usual practices; nor is it coincidence that Indian states with the lowest gender equality levels also have lowest GDPs. 4 FIs, as investors in the economy, would benefit strongly from such economic growth. FIs would also particularly benefit from bringing more unbanked and uninsured women in as financial customers.

Finally, gender equality is good for a company’s bottom lines. Companies including FIs with more women on their boards have higher returns on equity, net profit margins, and earnings per share, 5 as well as lower volatility. 6 Workplace diversity is a primary indicator of numbers of customers and profitability. 7 And the better a company is at promoting women generally, the more profitable it tends to be. 8

So, prioritizing women’s equality benefits women, society, and FIs directly. But what can FIs actually do to advance women? A lot. Gender equality is not a problem solely for governments to solve. Businesses like FIs, with broad economic influence and a clear stake in women’s advancement, have an important role to play.

FIs that want to prioritize gender equality can adopt reforms in four areas of their practice:

1. At the Leadership and Governance level, FIs can reap economic, management, and reputational benefits from mainstreaming gender equality as a value throughout all aspects of their business, promoting women into board and senior positions, and increasing transparency on gender-related policies, statistics, and action plans.

In India, many FIs have appointed one or more female directors, but they have far to go to embed gender equality into all their workplace policies and increase transparency on those policies.

2. In their Workplace Practices, FIs can raise profits, reduce costs, and achieve greater innovation by embracing women’s perspectives, hiring equal numbers of women as men, promoting women and men equally into leadership positions, ensuring equal pay for equal work, and prioritizing women’s professional advancement and work-life balance.

Many Indian FIs are taking small steps to support female employees, but with FI workplace diversity at just an average 25% and no transparency on whether women serve at the top or bottom of the hierarchy, FIs have much progress to make.

3. Through their Consumer Protection and Outreach, FIs can become innovators and brand leaders by designing products and services targeting women’s unique needs while ensuring gender-sensitive consumer protections. Too many Indian FIs consider financial inclusion as a charitable project. Innovative banks that see women as valuable customers with unique financial needs will secure a significant market.

4. Finally, in their Due Diligence of Clients, FIs can proactively avoid costs and build their reputation by embedding women’s perspectives, experiences, and needs into their lending and investment decisions, understanding and addressing harms caused to women workers and community members impacted by FIs’ transactions.

Many FIs believe they have no responsibility regarding the impacts of their clients, but by international consensus, they do.9 Furthermore, as the sustainability trend is going, FIs will only face increasing legal human rights compliance requirements in coming years. FIs should thus be proactive now, beating their competitors to fund socially good business in a socially good manner.

The financial sector is vastly powerful, with much benefit to gain, and much good to cause, by acting sustainability to advance women among its leadership, workforce, and customer base, and through its financial transactions.

This paper was written by Marian G. Ingrams during her tenure as a Fulbright-Nehru researcher at the National Institute of Public Finance and Policy, New Delhi. You can read her full research paper on Banking on Gender Equality here.

  1. International Finance Corporation (IFC) (n.d.). Resources on Sustainable Finance, available at, (last accessed 6 November 2017).
  2. See, e.g. World Bank (2011). World Development Report 2012: Gender Equality and Development; and United Nations (2005). Secretary-General’s Millennium Development Goals Report. Progress towards the Millennium Development Goals, 1990–2005.
  3. Sriani Ameratunga Kring et al (2009) International Labour Office (ILO). Guidelines on Gender in Employment Policies, pg. 9.
  4. Jonathan Woetzel et al. (2015), McKinsey Global Institute. The Power of Parity: Advancing Women’s Equality in India, pg. 1, 11-12.
  5. Rena Zuabi (2015). Value for Women. The bottom line: Why Gender Inclusion is Good for Business, pg. 4; Marcus Noland et al (2016). Peterson Institute for International Economics, Working Paper 16-3. Is Gender Diversity Pro table? Evidence from a Global Survey, pg. 9
  6. Morgan Stanley (2017). An Investor’s Guide to Gender Diversity.
  7. Katherine Miles et al (2009). Global Reporting Initiative (GRI)-IFC. Embedding Gender in Sustainability Reporting: A Practitioner’s Guide, pg. 27.
  8. Roy Adler (November 2001). Women and Profits. Harvard Business Review, Vol. 79, Iss. 10, pg. 30.
  9. ohn Ruggie (2011). UN Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy Framework.”