20-04-2020 · Insight

How a better gender balance boosts profits

Gender equality not only makes for a better workforce – it can be shown to enhance returns, a unique study shows.

Download the publication

RobecoSAM researchers measured the contribution of women in the workplace as part of analysis of a dataset of over 20,720 observations collected through the SAM Corporate Sustainability Assessment from 2013-2018.

The SAM CSA is an annual assessment which uses a scoring methodology to assess the environmental, social and governance (ESG) characteristics of the companies taking part. Gender equality is measured using a variety of metrics, beyond counting the number of women who serve on the company’s board.

On the face of it, the results were only mildly encouraging at first. An increase in gender diversity on corporate boards was a positive finding, but the increase at management level was minimal, rising from 24% in 2013 to 26% in 2018. Furthermore, data for the total workforce over the same time period shows little change.

But then drilling down into the data using regression analysis, the research looked at the presence of women at different corporate levels, and the link with firm fundamentals. Dividing the data into quantiles enabled confirmation of the link between financial performance at every level: corporate board, management and total workforce.

Significantly the results showed that more a positive relationship with a company’s profitability occurs when it has more than 20% of women on the board, more than 30.2% of women in management, and more than 44.7% of women in the total workforce.


Female representation at different levels by sector in 2018. Source: Robeco, SAM Corporate Sustainability Assessment (CSA), 2019

Stay informed on Sustainable investing

Receive our Robeco newsletter and be the first one to get the latest insights or build the greenest portfolio.

Stay updated

Critical mass of women

“Profitability and risk therefore improve with gender diversity,” says Junwei Hafner-Cai, portfolio manager of the RobecoSAM Global Gender Diversity Impact Equities fund. “This suggests that a critical mass of women at each level would have a positive effect on organizational dynamics.”

“Often, improving gender balance in corporates focuses on the lack of women holding board seats. However, the regression analysis also illustrated a positive link between a higher percentage of women in management positions and a firm’s profitability, returns, and earnings volatility – all characteristics of its quality and health of operations.”

Higher female participation is also linked to better earnings stability, which is an essential ingredient in longer-term sustainability, the research shows. It found that ‘top tier’ companies with more than 30.2% of female managers exhibited lower earnings volatility than ‘bottom tier’ companies across all regions.


‘Critical mass’ of women at each level for impact on organizational performance. Source: Robeco CSA, 2019

Candidates for the fund

RobecoSAM uses data from the CSA, along with other sources, to determine whether companies have female representation or policies that are progressive enough to warrant inclusion in the gender equality fund.

“As gender issues become more material for companies, they become a potentially valuable indicator for investors,” Hafner-Cai says. “RobecoSAM looks beyond women at board level to conduct a more holistic assessment of workplace equality.”

“This includes fair and transparent remuneration practices to reduce the salary gap, flexible workplace practices, childcare support, parental leave beyond the statutory requirement, talent retention, various levels of workforce diversity and employee engagement trends.”

Download the publication

Important information

The contents of this document have not been reviewed by the Securities and Futures Commission ("SFC") in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong. This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice. Please refer to the relevant offering documents for details including the risk factors before making any investment decisions. The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.