The Role of ESG in Closing the Gender Equity Gap

Published on:
by Aaroshi Rathor
Image of burning female sign on black background

Women have frequently experienced discrimination based on their gender throughout history. Women have always faced various forms of social and economic discrimination, whether they are applying for jobs or asking for a salary that is equal to that of their coworkers. So, how can we guarantee that women receive comparable employment opportunities and compensation for equivalent amounts of effort as men? 

Herein lies the value of ESG and how it can help both address the issue and implement policies that close the gender equity gap. 

Featured Article: Why is gender equality important for a sustainable tomorrow?

Stronger ESG strategies help with equal gender workforce 

When investing in a potential firm, public companies and institutional investors are growing more and more concerned about gender equality, inclusivity, and diversity. Companies must embrace gender-neutral practices and guarantee that women are equally represented in the workforce through strict ESG policies and measurements. 

Through ESG measures, businesses can aim to enhance their policies for hiring more women and providing more flexible work arrangements to make their organisation more inclusive and gender-varied from the grassroots to the highest levels of senior management. 

According to a report by McKinsey on diversity and inclusivity, It has been discovered that businesses with more gender diversity and inclusivity in top management roles typically generate more profits than those with less gender diversity in their operations.  

Featured Article: What Are The Benefits Of Gender Equality in the Workplace?

Women in the workplace: Unequal wages and discrimination   

Women experience discrimination in many different ways, some of which include getting paid less for doing the same amount of work as men, being passed over for promotions or leadership positions, being sexually harassed at work, being bullied based on their gender, and being given fewer possibilities for career progression than males. 

According to a report by Oxfam India, it was found that women in India face discrimination in the workforce despite having the same educational background and work experience as men due to cultural and employer stereotypes. 

According to the survey, discrimination accounts for 100% of the employment inequality that women experience in the labour market in rural areas and 98.6% in urban areas. For women looking for work, gender discrimination and the wage gap are major issues on a global scale. 

According to another report on the gender wage gap by Pew Research Center, it was found that On an hourly and full-time basis, women made on average 82% of what men made in 2022. Additionally, it was noted that there was an 8 cent difference between the average earnings of males and women in the same age range for women between the ages of 25 and 34. 

Featured Article: ESG Issues: Racial Equity

How can companies with strong ESG policies close the gender wage gap? 

Companies can contribute to the inclusion of Diversity, Equity and Inclusion (DEI) as a moral agenda and deliver fair and equitable outcomes for their employees in order for them to be fully productive at work by implementing ESG policies and programmes. ESG data can be very helpful in tackling salary inequality and fostering a more equitable and open work environment. 

A proposal recently announced by the European Commission would require businesses with more than 250 employees to report data on their gender pay inequality. In order for men and women in the EU to receive equal pay for equivalent labour, the proposal seeks to increase pay transparency. The proposal outlines pay transparency measures, including salary information for job seekers, a right to know the pay levels for employees performing the same activity, and reporting requirements for large corporations regarding gender pay gaps. 

The proposal also improves access to justice and boosts the resources available to workers to assert their rights. Employers will be required to share pay-related anonymized data upon request instead of asking job applicants about their prior wages. This plan will provide organisations and enterprises with tools to address pay discrimination at the workplace and assist women in becoming more aware of the pay circumstances in the company. 

Featured Article: Gender Equality and ESG: Women’s Rights in Business

ESG helps in promoting talent and a good company culture 

Employee burnout, decreased productivity, and emotional agony are frequently the results of toxic workplaces and unfair work practices. Sadly, it is women that have been disproportionately impacted by job loss due to toxic work environments and inflexible work policies

In a report by Oxfam International, it was found that women globally lost USD 800 billion in income due to the Covid-19 pandemic. Herein comes the significance of implementing fair ESG programmes in business organisations. In addition to keeping companies accountable for their environmental sustainability initiatives, ESG fosters a positive workplace environment where talented workers excel. 

A more diverse workplace environment also promotes creativity and productivity while ensuring fair labour practices and employee rights. A study by Marsh & McLennan Advantage showed that companies with highly satisfied employees perform 14% better in terms of ESG. These companies frequently have greater diversity and lower carbon emissions. They also put more effort into understanding the emotions of their employees since they are more emotionally intelligent. 

Similarly, in another survey by Society for Human Resources Management (SHRM) on employee engagement and ESG, it was found that 86 per cent of employees in companies with ESG-related objectives stated that their employer's ESG goals make them happy to work there, make their jobs more fulfilling, and encourage them to continue with their company.    

Featured Article: How Gender Equality Drives ESG Funds in 2023


For businesses to function sustainably in the long run, ESG policies and strategies are equally crucial to ensuring fair and just social and governance policies as it is to monitor their environmental duties towards the earth. 

In order for business operations to run smoothly, successfully, ethically, and profitably around the world, it is crucial that all three of these elements are placed in such a way that they do not conflict with one another. This is where the ESG as a whole comes into play, and can provide a framework for sustainable, inclusive growth that is measured on not just profitability, but the equal access to opportunity for all genders that also values personal development, talent, and emotional intelligence.

How are companies doing in terms of closing the gender equity gap? Find out more by searching the ESG ratings and reports from our comprehensive listing of global firms.   

Featured Article: The Importance of Gender Equality in the Workplace and its Effect on your Business


Featured Article Headlines

Streamline Your Emissions: Top Carbon Accounting Software Solutions for Efficient Sustainability Tracking

Streamline Your Emissions: Top Carbon Accounting Software Solutions for Efficient Sustainability Tracking

The Rise of Impact Investing: Paving the Way for Positive Social and Environmental Change

The Rise of Impact Investing: Paving the Way for Positive Social and Environmental Change

An Interview with Label Collective founder Julian Roberts on diversity, sustainability and innovation

The 0100 Europe 2024 PE & VC Conference

KnowESG Launching the Premier ESG Marketplace: Unique Place to Find Partners in Sustainability Transition

ESG Voice: Skillfulness Delivered - The Importance of ESG Education

Is Water Sustainable? Understanding the Reality and Solutions for Future Generations

Best Practices to Enhance ESG Reporting Processes and Outcomes

Thematic-ESG Mutual Funds: A Comprehensive Guide for Sustainable Investing

How EU’s Digital Markets Act Changes Big Tech