Triodos IM: Support women and improve the wellbeing of society

Triodos IM: Support women and improve the wellbeing of society

Diversity ESG
Nieuwe baan vrouw (06) on the move

In the past decades, the rate of women’s participation in the global labour force has grown but is still far from being at par with men’s participation. An economy cannot operate at its full potential if half of its population cannot effectively contribute to it.

When asked if they prefer to work in paid jobs, care for their families or do both, an astonishing 70% of women across the globe said they prefer to work in paid jobs, regardless of their employment status.

The reality is that only 47% of women are active in today’s labour markets, compared to 72% of men. Whereas in most advanced economies the participation of women has slightly risen in the past years, in some of the largest emerging economies it has fallen. India’s female participation rate is one of the lowest at 27%, also showing a sharp decline. Barriers for female labour participation include cultural and economic factors, but also the absence of family-friendly policies such as parental leave and childcare support.

The low female labour participation rate, particularly in some emerging economies, obscures the fact that many women are actually working, but in occupations that go unpaid and unrecognised in the official national accounting systems or statistics. This has a lot to do with the traditional role of women in the family. Indeed, women often work long hours that are not accounted for, and they are often led to curtail their employment or stop working altogether to accommodate their domestic responsibilities. Additionally, women are also over-represented in the informal sector, where activities are unreported and not regulated.

While the women formally employed are strongly represented in the healthcare and childcare sectors. Here the share of jobs held by women is above 90%, followed by teaching and education, where the share is around 70% and food services and related activities with around 60%. Agriculture and related activities, according to these statistics, are mostly dominated by men. Indeed, in many emerging economies, women working on the land have no land ownership and hence no access to finance, ending up in supportive roles, largely unpaid or as seasonal workers.

Yet, whether formally or informally employed, women hugely contribute to the wellbeing of society and a well-functioning economy.

Financing women in the agribusiness – a call to action

Women are critical actors in small-scale agribusiness value chains and subsistence farming. In Africa, women are active along the entire food value-chain, from planting, cultivating, and harvesting, to processing, logistics, and sales of food. However, women have limited access to financing and to information to improve the methods of production and distribution. And to enter the labour market, they need access to family support, including childcare and from their partners in sharing family responsibilities.

Additionally, less than 20% of the world's landholders are women. In fact, nearly 40% of the world’s economies still limit women’s property rights, which also severely impedes their access to credit. They receive less than 10% of small farm credit and only 1% of total credit to the agricultural sector. This makes it difficult for women to be formally employed in the agribusiness sector.

There is also a financial case for investing in women. Evidence shows that microfinance lending targeted at women has high recovery rates. Women are better savers than men, better at repaying loans, and more willing to form effective groups to collect savings and decrease the cost of delivering many small loans.

Financial institutions that capitalise on women are investing in the future. Triodos Investment Management is a global player investing in advanced and emerging economies and is involved at different levels in the transition towards gender equality. We support investments in the areas of healthcare, childcare and financial inclusion.

  • Triodos Future Generations Fund invests in such companies as Poppins in Japan and Bright Horizons in the US, providers of childcare services. Access to childcare is one the key enablers of higher participation of women in the workforce. An important engagement topic is family-friendly work policies, which includes maternity leave, access to daycare, but also living wages when investing in companies.
  • Triodos Microfinance Fund and Triodos Fair Share Fund invest in financial institutions, largely in low-income countries, that promote gender equality by facilitating access to credit to female entrepreneurs, which help unleash women’s economic potential. Around 79% of all loan clients at the financial institutions both our financial inclusion funds invest in, are women and many in rural areas. We also encourage investees to develop products that are better suited for women’s needs as consumers, for example when offering fintech services.

Having paid work is important for women’s individual well-being and empowerment, and also for societies’ wellbeing. Stable paid work for women brings additional income to the family and supports financial stability for raising a family. And because women mostly work as caretakers, educators, doctors, healthcare providers and food suppliers, they support the broader wellbeing of societies.

Money is a key tool for female empowerment: financial institutions are therefore well positioned to contribute to this cause, but they need to make gender equality one of their priorities. If we want better and happier societies, women need all the support they can get in bringing economies to their full potential.