How Investors Can Support Prioritizing Gender: The EU’s CSDDD and beyond
Investors committed to respecting human rights have welcomed the EU’s Sustainable Corporate Governance Initiative, in particular the legislation on mandatory human rights and environmental due diligence. This legislation reinforces responsible business conduct as a corporate duty and not simply a voluntary matter, and it helps ensure a harmonized standard of conduct for companies across their full value chains. However, for this legislation to effectively tackle human rights risks and impacts, it must intentionally and explicitly capture a gender perspective. Unfortunately, the European Commission’s legislative proposal for a Directive on Corporate Sustainability Due Diligence (“the Directive” or CSDDD) does not take a gender-responsive approach. The proposal does not even mention the words “gender” or “women” once in its 70 pages. This is a missed opportunity for coherence among the EU’s strategy, policies, and activities. With the final language of the Directive yet to be negotiated, this critical gap must be addressed to ensure that women and girls are not left behind.
Boston Common Asset Management is committed to addressing this missed opportunity as part of our efforts to prioritize gender and encourage other investors to prioritize gender. Until now, investor approaches on gender have largely been focused on board or leadership diversity alone. Even among initiatives focused on business and human rights or on the “S in ESG,” gender is addressed implicitly at best – not clearly defined nor directly addressed.
Recognizing that the COVID-19 pandemic has widened the global gender gap by a generation, from 99.5 years to 135.6 years, our firm recently developed new Investor Guidance for Prioritizing Gender across the value chain from workplace practices, supply chains, products & services, and communities. In line with this guidance, we are actively participating in public policy engagement to drive gender equity systemically. This includes an investor statement calling on EU policymakers to address gender in the new Directive on Corporate Sustainability Due Diligence, and asking policymakers to ensure the Directive is gender-responsive and explicitly captures a gender perspective. This statement is consistent with the European Commission’s Gender Equality Strategy 2020-2025 and Gender Action Plan III as well as gender guidance provided by the UN Working Group on Business and Human Rights and the OECD.
The investor statement asks the European Commission to recognize the gender-specific impacts of business activities, adjust the list of relevant violations, prohibitions, conventions, and instruments, and explicitly articulate the gender-responsive due diligence obligations of companies within the Directive. For example, the Directive does not yet clearly articulate that human rights and environmental risk/impact assessments and indicators must be gender responsive. These assessments should use data disaggregated by sex/gender and other intersectional aspects of identity, and specifically acknowledge gender-based violence and harassment as a severe risk to be prevented and redressed. While the Directive focuses on “neutralizing adverse impacts or minimizing their extent,” it should instead explicitly address remedies beyond financial compensation. Furthermore, the Directive does not explicitly address some major barriers to justice often faced by claimants. It must consider the specific barriers that women face when accessing justice and obtaining an effective remedy – both non-judicially and judicially – as well as ensure impartial and fair procedures free from inappropriate influence. We believe that explicitly capturing a gender perspective in the Directive would make a significant contribution to protecting women’s rights and advancing gender equality. If it remains implicit, progress toward gender equality will remain limited and women and girls will be left behind. We welcome others joining us in this call to action to the European Commission.
Read the investor statement here
If interested in joining, please reach out to Lauren Compere, Head of Stewardship and Engagement at lcompere@bostoncommonasset.com.
Lauren Compere, Managing Director, Head of Stewardship & Engagement
