NAB’s Chief Economist, Alan Oster provides his thoughts on the Australian and Global economy.
Research continues to show that companies with gender diversity in their leadership teams deliver better financial results. A new product from NAB – and Australia’s very first ‘social bond’ – allows investors to put their money where their mouth is and finally invest in gender-inclusive organisations.
Does gender diversity at work pay off? Research suggests the answer is yes and Australia’s first ‘social bond’ allows investors to be part of the success story.
Studies show that companies with gender diversity in their leadership teams – and ranks – are more productive and profitable than those where one gender predominates. Now, a new product from NAB – and Australia’s first ‘social bond’ – allows investors to put their money where their mouth is and invest in gender-inclusive organisations.
There are sound economic as well as social reasons for companies to encourage gender diversity at all levels.
A global study of 2360 companies in 2012 found that those with at least one woman on the board outperformed businesses with no female board members by 26 per cent over six years. A 2014 Gallup study of over 800 business units in the retail and hospitality industries, meanwhile, found that gender-diverse units had better financial outcomes than those dominated by one gender.
Men’s and women’s differing viewpoints, ideas and insights led to better problem-solving and superior performance, the Gallup study concluded, while gender diverse workforces allowed companies to better serve increasingly diverse customer bases.
While performance is one aspect of investment, so too is social responsibility. NAB’s Head of Group Funding Eva Zileli says the launch of the NAB Social Bond (Gender Equality) comes in response to growing demand for investment options which enable clients to put their money to work in socially responsible ways.
“More and more investors want products that help address pressing social and environmental issues and which meet their own social and environmental criteria,” Zileli says.
“NAB is committed to building a strong market for socially responsible investments that give investors more choices and options to act on social issues. We see this bond as a critical step in that process and in building the transparent reporting tools that investors need to measure the impact of these investments.”
The launch of the NAB Social Bond (Gender Equality) aims to raise awareness of the actions corporate Australia needs to take, in order to foster greater gender equality in the workplace.
It’s a collective push which has received wholehearted endorsement from NAB’s executive team. The bank has long been a champion of gender equality, both in its own workplace and in the thousands of Australian businesses of all sizes and stripes it services every day.
NAB CEO Andrew Thorburn is a member of Male Champions of Change and has been a Workplace Gender Equality Agency Pay Equity Ambassador since 2014, while executives Cathryn Carver and Angela Mentis, and director Anne Loveridge, are all members of Chief Executive Women.
“NAB is committed to fostering a diverse and inclusive culture because we know it leads to better business outcomes,” Carver says.
The NAB Social Bond (Gender Equality) will enable investors to participate in financing or refinancing organisations which have been named Employers of Choice for Gender Equality (EOCGE) by the Workplace Gender Equality Agency (WGEA).
EOCGE citations were awarded to 106 organisations in 2016, based on their implementation of initiatives such as flexible work policies, analysis and correction of gender pay gaps and programs to support women into technical and leadership positions.
The initial NAB Social Bond (Gender Equality) portfolio includes local property giants Lend Lease, Mirvac and Stockland, accountants KPMG Australia and PwC, Monash University and the Australian Catholic University and a tranche of national law firms.
In addition to meeting EOCGE criteria, organisations in the Social Bond (Gender Equality) portfolio must not be involved in serious controversies of an environmental, social or governance nature and their primary activities must not involve alcohol, gambling, tobacco, military weapons, predatory lending, fossil fuels, palm oil, live cattle transport or whaling.
National law firm Gilbert + Tobin believes it’s reaping the benefits of a swag of gender equality initiatives which resulted in its inclusion in the inaugural NAB Social Bond (Gender Equality) portfolio. A third of its partners are female, along with a high proportion of the leadership team.
Gender pay equity is analysed annually and the firm conducts a biannual diversity audit and runs programs to build awareness of issues such as diversity, inclusion and unconscious bias.
Around a quarter of Gilbert + Tobin staff work part-time or take advantage of family-friendly arrangements such as job sharing and remote working. The firm has found flexibility benefits employer and employee alike; leading to better performance and increased productivity and helping it to engage and retain experienced, high calibre staff.
Superannuation funds, and groups based in Australia, the UK, Hong Kong, Singapore, Switzerland, Korea and Taiwan that focus on socially responsible assets, are among investors that have purchased the five-year bonds.
The bonds are five-year fixed rate bonds, with proceeds having been earmarked for refinancing a portfolio of businesses and assets funded by NAB. The bonds are senior, unsecured obligations of NAB, with no recourse to, or security over, the loans to earmarked businesses.
NAB continues to explore a range of social bond concepts as part of its usual funding program, subject to market conditions and the availability of eligible ‘social’ assets.
For more information, please contact your Private Banker.
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