Private Sector and Women’s Economic Empowerment: US Chamber of Commerce
Today, I am giving a talk at the International Women’s Day Forum at the US Chamber of Commerce. As a gathering of business leaders, this venue gives me a good chance to carry forward the message launched at Chatham House in November:
That women’s economic empowerment is one of the premier strategies for good in view today, both for growth and humanitarian reasons
That business has a core role to play, especially if we want the reforms and interventions currently being tested around the world to be taken up on a sustainable basis
That business represents the potential to “scale” gender equality in a way that charities and governments cannot reasonably be expected to do, but the interventions have to “work” within a true business case.
My intention today will be to focus on presenting the business case as such. Up until now, the so-called business case that has been put forward within the WEE community has actually been a macroeconomic case: to wit, gender equality leads to national economic growth. This outcome is great for everyone, but it is not a business case. To have a true business case, you must be able to show specific ways that a program can contribute to business outcomes for a company, in addition to the positive impact on women, growth, and so forth.
Fortunately, I was able to synthesize from the many discussions the Global Business Coalition for Women’s Economic Empowerment has had over the past three years a list of business “wins” that they had experienced with their programs. These companies, who represent some of the largest and most geographically diverse private sector players in the world, felt that the list I came up with were a good summary of what a business might find beneficial from programs aimed at women’s economic empowerment. The group also represents a wide spread of industries: Coca-Cola, ExxonMobil, Goldman Sachs, Marks & Spencer, Mastercard, Mondelēz International, PwC, Qualcomm, and Walmart.
By engaging in women’s economic empowerment, companies can look for the following business gains:
Product and supply improvement. Three aspects of supply can be highlighted here. First, ensuring the quality and quantity of supply. If you are a major producer or retailer, you must always be mindful of the future supply of ingredients or products that are essential to your core business. So, for instance, if cocoa is an essential ingredient in your line of cookies and biscuits, as in the case of Mondelēz International, you are monitoring the quality, stability, and quantity of cocoa. If you are selling a lot of, say, coffee or bananas in your stores, such as is the case for Marks & Spencer and Walmart, then you need to be sure that those agricultural products are available and will be available in the future–in both the amounts and quality you require. Especially given the trend toward feminization in agriculture, these kinds of companies are finding it important to be reaching out to female smallholder farmers to help them yield better quality and higher quantity produce. (To understand this a little better, it is good to watch this video.) Secondly, to maintain consumer interest, such companies are always trying to develop new products. Several companies in the Coalition have found that by engaging with new suppliers, they also discover new ingredients, as well as new finished products, that present viable new options for the consumer market.
Reaching and developing new markets. To ensure the growth that is essential to maintaining company value, multinationals often seek to reach new geographies or new consumers with their offerings. Qualcomm, for example, is substantially expanding their reach into developing markets via customized services that meet the needs of women, as consumers, entrepreneurs, and the recipients of essential services, such as healthcare. At the same time, these large companies must be mindful of maintaining the loyalty of existing consumers. In the developed markets, between 70% and 80% of goods are purchased by women. Research indicates that women, as consumers, like to help women as producers. So, a solid women’s economic empowerment program helps keep that base happy and engaged.
Attracting and retaining talent. According to PwC’s research (PwC is a member of the Coalition), 78% of employers are currently focused on hiring more women. Retaining women, especially as they grow into their careers, is also an important consideration. Indeed, some of the women’s empowerment initiatives among the Coalition have grown specifically out of efforts to attract, retain, and promote women within their own ranks. For instance, Coca-Cola’s 5by20 effort was the brainchild of their global women’s leadership group. Particularly when you consider (1) the skills gap that experts see coming and (2) the fact that women now vastly outnumber men in tertiary education, the power of women’s economic programs to win the trust and loyalty of female recruits makes them quite a good investment.
Improving the labor pool. nIn developing countries, the population often has little experience with the basic expectations of formal employment, as well as a shortfall of necessary education. Women, in particular, often need additional training to succeed in formal jobs. So, multinational engagement in programs aimed at helping women make that transition also improves the readiness of employees in emerging markets. Coalition members have also discovered that targeting training programs and other interventions at this level results in measurable increases in productivity.
Building relationships with external audiences. As explained in the report, corporations see their external audiences in a very different way than in the past. For instance, what used to be seen as “government relations” is more accurately described as “government partnerships” at this point. Because women’s economic empowerment is needed pretty much everywhere, but especially in developing nations, a corporation that has expertise and programs aimed at this issue can provide governments with valuable support. Further, corporations also look at local community operations quite differently. Especially in the agricultural interventions mentioned above, for instance, the corporation’s presence in the community is more integrated into everyday life. Companies are keen for these “integrated relationships” with local communities to be positive. Thus, supporting community integration becomes an important benefit for major multinationals.
Supporting the value of corporate capital. Increasingly shareholders expect corporations to be good citizens. Furthermore, investment experts who offer ratings and advice on the value of corporations build sustainability and governance into their pricing recommendations. It has long been recognized that the companies with the best reputations are also the most valued. Women’s economic empowerment helps corporate capital valuation in these two ways. On the internal side, having women in top management has been shown, time and time again, to result in better financial performance. For financial institutions such as banks, better financial inclusion for women increases the customer base while also maintaining or improving both growth and reliability. Macro-economic analyses also show that more diverse and equitable inclusion in the financial system results in more stability of the overall financial sector.
Further details of and evidence for the business case is in the report, released under the Said Business School/University of Oxford imprint, which you can access here. My talk is at 3.50PM.