I was as the Bloomberg terminal yesterday checking on some stocks. Then I got distracted because I came across Bloomberg’s Gender-Equality Index (“GEI”). I’m like, wow? Seriously? I’m impressed. Bloomberg really upped the game trying to be the best platform for investors, analysts, companies that are serious about Environmental, Social and Governance (“ESG”) products. And promoting/advancing gender equality is one of the key criteria for company to have high score in Governance. I just discovered that Bloomberg has a tab on ESG under Financial Analysis section of each publicly-held company and you can even find things like “number of female executives, number of female board members, average age of Board members, oldest and youngest age of Board of Director, etc”.
According to Bloomberg, the index has become the “gold seal for companies to publicly demonstrate their commitment to equality and advancing women in the workplace”. The index includes 230 leading companies employing 7m women around the world (out of 15m employees, that’s almost half!). One thing to note is that the information are all obtained directly from the companies, voluntarily (well, that’s what they said). So the idea is that you can trust the data provided and if the data is available, then it is a bonus point for the company because it shows that the company is committed on gender equality in a transparent manner.
And the benefit to investors is that it’s just another avenue to invest and analyse the performance of companies. As per Bloomberg, the Index represents an important opportunity for companies to attract new capital and widen their investor base. But the thing is, I checked yesterday, the return of the index since 2015 is only ~4.0% p.a., that’s just like putting your money in fixed income. The dream is to show that the index outperformed companies that do not promote gender equality. But the catch is that, not all companies are willing to contribute and provide data eventhough they do promote gender equality. I’ve got to go back to Bloomberg and check, it may be the case that 4.0% is just the price return not total return, i.e. includes dividends.