SB'25 San Diego is open for registration! Sign up by January 1st to lock in the pre-launch price!

Want to Make an Impact? Invest in Women

Just 13 of the 200 highest paid CEOs in the U.S. are female, according to data published recently by the New York Times. While gender parity in the workplace is advancing worldwide and many women are heeding the call to ‘Lean in’, progress in changing outcomes is generally slow.

Just 13 of the 200 highest paid CEOs in the U.S. are female, according to data published recently by the New York Times. While gender parity in the workplace is advancing worldwide and many women are heeding the call to ‘Lean in’, progress in changing outcomes is generally slow.

Veris Wealth Partners, an investment advisory firm included on B Corp’s 2015 “Best for World” list, is changing this trend. One of the firm’s focus areas is ‘gender lens’ investing, wherein investors prioritize companies that are led by women, promote gender equity, or that benefit women through their products and services. Veris’ gender lens whitepaper, released earlier this year, highlights the social and economic benefits of investing in women.

Veris cites evidence that investing in gender diversity in the workplace pays off financially: companies’ reported earnings have been shown to correlate with greater gender diversity in senior management; microfinance institutions with more women clients have lower write−offs and credit−loss provisions; and Fortune 500 companies with three or more female corporate directors significantly outperformed those without any.

Patricia Farrar−Rivas, founding principal and CEO of Veris, has witnessed the changing role of women in the workplace first−hand. I spoke with her about her career, and what makes her hopeful about the future of sustainable finance.

Veris’ white paper argues that a ‘gender lens’ is inclusionary of other impact lenses − that it supports efforts to alleviate poverty, build community wealth, and combat climate change. How does supporting women advance these objectives? It also cites evidence that companies run by women outperform their counterparts. What is it about women that helps them achieve results?

PFR: I think the most important thing is to understand that diverse groups make better decisions. What we're looking for is parity. It's not just women; it's through women that we can bring in other diverse groups. Often you'll see companies that have more women in leadership also will have more women of color. So you're also looking for other areas of diversity − whether it's around disabilities, sexual orientation, age − especially among in the companies that serve a broad sector of society.

From a business point of view, 51 percent of the buying population is female, so women also bring the mindset of what the female customer is seeking. This may bring a different mindset and a different approach in the long run. It could also potentially bring better products and solutions. There are studies that show that companies with more women on boards or in leadership make better decisions around sustainability. I hate to generalize 'women think this way,' 'men think that way,' but I think that women have a tendency to be a little bit more risk−averse. In companies, that can play out positively because you're looking at how to mitigate risks that they may face in the future. Women also have a tendency to multitask, so not just looking at ‘what are our products and sales?’ but rather, ‘what is the long−term effect of those products and services? Is there a positive environmental aspect to it?’ I’ve also observed that women tend to ask more questions than men do.

Over the next 20 years, women are going to be managing and making most of the household financial decisions. You can't go to a [financial services] conference today where they don't have sessions on 'how do you talk to women?' about financial services. And when you talk to [women], you're not just talking about numbers and statistics; you're talking about what a company is, what they do, and what kind of value they bring.

As a woman in a leadership position, how do you personally relate to advancing gender lens investing? How has the workplace changed since you started your career in financial services?

PFR: I think it's very different when you're looking at young women leaders today, versus women that were in the financial services industry early on, like myself. When I started, there were 3−5 percent women in the financial services industry that were in an executive or professional position. That's changed; we're more in the 17 percent range today.

One of the things that have been really clear is the ability of women today to think more like a team. For example, although I was very athletic, I did not have the same team opportunities many young women have today. Men came in with a certain level of these skills, and women my age didn't have that kind of team training. So it was easy for us to get singled out versus being viewed as part of the team. But every player is important. Now the important question is: how do we bring young women into teams? How do we bring focus that's it's really the team that gets the best work done? This goal is really compatible with the idea that a more diverse population gets the best work done.

At the very top, we're not seeing the numbers change − number of women on boards, number of women CEOs. But I am seeing them change at that next tier down. In higher levels of management I have observed more women, and more teams of potentially all women. In the financial services industry you're seeing a few more female CEOs; you're seeing more women you can go to that can mentor you that have this experience, than when I first started in this industry. So, there is that glass ceiling. It hasn't cracked through, but it feels like there are a lot of people bumping up against it now. A lot more than there were.

What are a few qualities in yourself or advice you took to heart that contributed to your career success?

PFR: I had a lot of experience working as a team, and I think that that's been valuable to me. I also think choosing other people to mentor you, whether it's a male or female, but choosing to have mentors, looking for advice from other people, and meeting with people that have gone through experiences that are new to you, is helpful.

What makes you hopeful about the future of ESG investing? What new developments are you excited about?

One of the things that makes me most hopeful for the future is who I'm talking to about sustainable finance. I do not feel as if I'm marginalized anymore, even though there's still a little bit of that in some instances. Whatever conference I go to, the pocket of people that are interested in this is growing, and there's more people at leadership levels that I talk to that get this and ‘grok’ it.

That has changed significantly. I've been doing this since 1992. It’s very, very different than it was then. You're seeing large banks − UBS, Bank of America, BlackRock, for example − that are taking this seriously. Larger consulting institutions like Cambridge and Mercer, and large foundations − they all they have to have a team addressing this now. They have to have people within their institutions that are knowledgeable about [sustainable finance].

I am also encouraged by institutions like SASB, which engage with analysts and investors and corporations, and understand it’s really important to identify what the proper metrics are. It means that people believe that sustainability is important and they want to report on things the correct way. We’re just seeing all of these indicators now. [Sustainability] is no longer being pushed off to the side anymore − no longer viewed as the cause of rabble−rousers! It is becoming a core part of many businesses.