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Growing ESG Reporting Becomes A Priority For Investors – South Africa’s Stats Look Promising

08 March 2019 Refinitiv

To celebrate International Women’s Day, Refinitiv analyzed some of the gender related metrics in its environmental, social and governance (ESG) database. Highlighted below are five key ESG findings often integrated in the investment decision process.

1. Investors Consider Companies That Report Gender Metrics

Overall, on a global scale, we see companies more willing to report granular data on gender diversity than ever before. In the last five years, we have seen a 6% increase of companies reporting female manager numbers. Companies reporting female employee numbers is also seen as a positive sign for investors looking for transparency as now almost half of companies report on this metric globally.

Companies reporting gender metrics report that they have an average of 37% female managers and 52% female employees.

2. Changes At The Top

While still significantly underrepresented, in the last five years there has been improvement among women at board and executive levels. Little has changed at lower employee level however. The recent improvements at board and executive ranks reflect the increasing focus on gender diversity at the corporate leadership level, with a 5.57% increase in female executives between 2016-2017.

An analysis of the female composition of the workforce reveals the following:
• Female Board Members averaged 13.35% in the 2017 financial year compared to 11.34% in the 2013 financial year;
• Female Executives averaged 18.07% in the 2017 financial year compared to 12.17% in the 2013 financial year;
• Female Managers averaged 26.41% in the 2017 financial year compared to 24.75% in the 2013 financial year; and
• Female Employees averaged 34.92% in the 2017 financial year compared to 33.49% in the 2013 financial year.

3. The Corporate Ladder Gender Gap

There are still some significant barriers when it comes to promotion of women to more senior levels. In an ideal world, we would see comparable average percentages of female representation across all levels but the reality is starkly different. Using female employee percentages as a baseline for comparison against board, executive and non-executive levels, the gender gap is substantial at all levels.

The Gender Gap:

 

US

Japan

Australia

UK

Canada

Taiwan

South Africa

China

Brazil

France

Female Board Members (%)

20.6

4.7

17.7

22.9

20.2

11.0

23.7

10.3

8.4

42.8

Female Executives (%)

15.1

1.3

17.9

15.5

13.7

13.7

20.3

10.6

8.6

14.4

Female Managers (%)

33.3

9.6

28.2

25.2

31.1

28.6

31.5

26.3

29.1

13.1

 

4. Gender Diversity By Region

When comparing countries with the highest GDP, Japanese companies with female board members, executives and managers are conspicuously absent. It is also worth noting that six of the top ten regions have a deficit in female executives, meaning it could be a challenge to keep the board level diverse in the future if there isn’t a healthy pipeline of female executives to promote onto the board.

Female Representation for Six Countries:

US

Board Members – 20.62%

Executives – 15.11%

Managers – 33.27%

Employees – 38.33%

 

China

Board Members – 10.29%

Executives – 10.57%

Managers – 26.31%

Employees – 35.91%

 

Japan

Board Members – 4.68%

Executives – 1.29%

Managers – 9.56%

Employees – 26.28%

 

Germany

Board Members – 27.83%

Executives – 7.90%

Managers – 24.66%

Employees – 36.00%

 

UK

Board Members – 22.93%

Executives – 15.54%

Managers – 25.19%

Employees – 26.59%

 

South Africa

Board Members – 23.67%

Executives – 20.27%

Managers – 31.54%

Employees – 39.65%

 

 

Top Ten Countries with Highest Female Board Representation by GDP:      

Country

Female Board Percentage in 2017

Refinitiv ESG Company Coverage

GDP Ranking

France

42.80

89

7

Italy

33.50

45

9

Germany

27.85

85

4

United Kingdom

22.93

269

5

United States of America

20.62

875

1

Canada

20.21

259

10

India

13.61

89

6

China

10.29

101

2

Brazil

8.39

96

8

Japan

4.68

413

3

 

5. Gender Diversity By Industry

Our data shows that globally, gender composition of the workforce has changed over the years based on industry group. Although changes have been consistent in the top business sectors, we still see severe underrepresentation of female employees in industries that have been traditionally male dominated.

Top Five Business Sectors Ranked by Female Employee Percentage:

1. Drug and Food Retailing – 56.39%
2. Retailers – 55.90%
3. Insurance – 54.54%
4. Healthcare Services and Equipment – 51.51%
5. Banking and Investment Services- 49.42%

Bottom Five Business Sectors Ranked by Female Employee Percentage:

1. Mineral Resources – 15.39%
2. Automobile and Auto Parts – 17.73%
3. Chemicals – 19.73%
4. Applied Resources – 21.54%
5. Industrial Goods – 21.55%

Business Sectors Ranked by the 2017 Female Employee Percentage:

Top 5 Groups

Female Board Representation

Female Executives

Female Managers (Non-Executive)

Female Employees

 

2013

2017

Delta

2013

2017

Delta

2013

2017

Delta

2013

2017

Delta

Food and Drug Retailers

15.60

23.13

7.5

12.59

17.11

4.5

34.59

33.98

-0.6

52.30

56.39

4.1

Retailers

15.35

21.76

6.5

14.56

18.02

3.5

37.04

38.64

1.6

57.00

55.90

-1.1

Insurance

16.31

22.03

5.7

11.00

13.64

2.6

31.49

35.21

3.7

53.42

54.54

1.1

Healthcare Services and Equipment

15.11

25.21

10.1

12.70

15.29

2.6

37.29

34.38

-2.9

55.93

51.51

-4.4

Banking and Investment Services

13.56

19.16

5.6

13.78

16.00

2.7

34.25

35.98

1.7

49.08

49.42

0.3


The financial sector represents two of the top five economic sectors by female employment with the banking and investment services being ranked at the top by female employees and managers.

Some improvements have been seen by female employees in the retail sector appears in the top five for female employees, female managers and female executives. Insurance, and healthcare services and equipment industries show high representation in female employees and female board members; however, the healthcare services and equipment industry has had a gradual decrease in female managers over the last five years.

Another area to keep an eye on is STEM industries. The technology and engineering economic industries are not represented in the top five business sectors based on female employees. The only STEM business sector that has more than 40% female employees is pharmaceuticals and medical research. STEM is an area which has received a lot of controversy and attention for their lack of gender transformation in recent years and we are yet to see if they fulfil their commitment to have more female representation in the near future.

Click here for ESG Data on Gender Reporting

 

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