March 11, 2009
Goal of New Index Series Is to Advance Gender Equality
by Robert Kropp
Pax World and KLD launch an index series sponsored by the International Finance Corporation to
increase gender empowerment.
The timing could not have been more symbolic for the announcement of a new index series developed
by Pax World, a leader in the field of
sustainable investing, and KLD Research &
Analytics, an investment research firm providing tools for the integration of environmental,
social and governance factors (ESG) into investment decisions.
On March 8—International Women's Day—the two firms
announced that they have joined to construct the first Gender Investment Index series for the International Finance Corporation (IFC), a member of
the World Bank Group. IFC's Gender Program provides financial products and advisory services that
increase access to finance for women entrepreneurs and reduce gender-based barriers in the business
The objective of the five indices in the IFC Gender Index series, which will
use the FTSE All-World Developed Index as the starting universe of companies, is to increase
interest among corporations and investors in gender empowerment.
Referring to research
done by Pax World, Julie Gorte, Senior Vice President for Sustainable Investing, told
SocialFunds.com, "Our review of literature indicates that with very few exceptions a positive
correlation, and in some cases a positive causality, can be found to exist between gender
empowerment and financial performance."
"What we found to be especially interesting in our
research was the positive correlation between gender diversity in Boards of Directors and senior
management and the quality of earnings reported by companies," Gorte continued. "Sustainability is
a robust indicator of high quality of earnings, and gender issues are very much a part of
"Investors really need to have companies report on issues of gender in
The Index series will include large and mid cap companies that recruit,
retain, and promote women. The goal of the Index series is to advance gender equality and women’s
empowerment in the workplace and beyond. The five indices in the series include a benchmark, three
regional indexes, and a global top 100 best performers in gender empowerment. The Index series is
industry and region neutral.
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