Equileap, the organisation which aims to accelerate progress towards gender equality in the workplace, has teamed up with Solactive for the launch of a family of three indices tracking leading companies in the field of gender equality. The Solactive Equileap Europe Gender Equality Index, Solactive Equileap US Gender Equality Index and Solactive Equileap Global Gender Equality Index, which will be used as the underlying baskets for structured products and exchange-traded funds (ETFs), all offer investors different geographic exposures to the same gender lens methodology.

The UN enlisted gender equality as one of the 17 goals of the 2030 Agenda for Sustainable Development adopted by more than 150 world leaders, and, according to Diana van Maasdijk (pictured), CEO and co-founder of Equileap, there has been a lot of research in the past 10 years highlighting that companies with a better gender balance in management and leadership tend to perform better and take less risk.

"Both the business case and the social case have been made and we have seen a strong demand from investors for responsible investing, whether it is about ethics, ESG (environmental, social and governance) or even gender," said Van Maasdijk.

Most investment products that had been made until now, if not all of them, focus purely on a couple of criteria such as women in the board and women in leadership, according to Van Maasdijk. "What we wanted to do is to create a tool that is much more encompassing of gender equality throughout the company.

"This family of indices we are launching now is based on 19 criteria that look at gender balance and leadership in the workforce, but also look at things such as equal pay, parental leave, both for fathers and mothers, as well as the whole range of policies from the boardroom to the supply chain," said Van Maasdijk.

It is not the first time Solactive, which is the index calculator and administrator, has integrated a gender-focused perspective in one of its indices. Back in November 2016 the German index engineer launched the Solactive Global Gender Diversity Index which was based on a gender equality screening from Sustainalytics, a provider of ESG research and ratings, and which was licensed to UBS.

"For that index, we used four factors to assess companies that are working towards gender diversity [...] for the new family of indices we have evaluated companies on 19 gender equality factors, based on detailed information we get from Equileap," said Fabian Colin, head of sales, Solactive.

There are several studies showing that considering ESG factors in the portfolio leads to better long term performance, according to Colin. "You can see that the chances to outperform are higher if you have an ESG or a diversity approach in your portfolio," he said.

"There is a significant trend," said Van Maasdijk. "A lot of key players we met with mentioned the fact that the next few years will be the years for ESG investing and that the ethical investment movement is going to strengthen. We really want to bring gender equality into that movement," she said. "We met with many investors who were interested in the investment theme but couldn't find a proper financial product in the market to diversify their portfolio with gender equality."

The indices are calculated as gross total return, price return and net total return. "The price return is generally used for structured products, as you can create cheaper options and ETFs are usually issued on gross or total return indices," said Colin.

In general, every ETF or structured products provider can get a license for the index family and indices can be licensed to more than one provider. "We have exclusivity but these are usually limited to the product type and to the countries and over a certain time," said Colin.

"This family of indices is for any client that would want to use it as a benchmark or underlying and not for one specific client," added Van Maasdijk.

Click the link to view the index guideline and presentation.

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