Women entrepreneurs are leading the sustainability charge in business and investing, which is not surprising. According to a new report, a majority of women say reducing their carbon footprint is their top measure of success in investing, more important than financial returns. The 2020 BNP Paribas Global Entrepreneur Report found that beyond financial returns, a full 54 percent of women entrepreneurs prioritize climate impact, compared to 41 percent of men.
That’s significant. I’ve been working with entrepreneurs and private business owners for more than 25 years, most recently with Bank of the West’s Wealth Management Group, where I also participated in the inaugural Stanford Women’s Entrepreneur program, so my lack of surprise over the report’s findings is rooted in experience. I’ve witnessed women face all kinds of challenges as business leaders: lack of access, funding barriers, obstacles to inclusivity, and more. This report shows that women are applying their hurdle-clearing skills to a new set of challenges—ones that will benefit all of us. Women entrepreneurs’ sustainability leadership has reached a critical mass just as we need it most—as we face the need for a sustainable recovery from COVID-19 worldwide.
To unpack what this emerging leadership means, I sat down with my friend and colleague Julie Davitz, Bank of the West’s Head of Impact Solutions. She has worked in this space for decades, and she’s written about women taking the lead in impact investing. So when the BNP Entrepreneur Report revealed women emerging as business sustainability leaders, I knew she’d have some insights to share on why—and what their impact could be.
Kristin: What was your reaction to the report’s finding that women entrepreneurs are leading the charge in adopting environmental goals and measures of success?
Julie: It makes complete sense to me. In my work, women, generally, have had a serious concern about the future. Women can be more sensitive to threats to society—maybe this is a nature-versus-nurture question—but there’s a real energy behind these women entrepreneurs to protect their planet for future generations.
You can see the pattern starting in philanthropy, which, for decades, has been an endeavor that many women felt passionate about. We’ve seen an increasing trend in women caring about building a better future—not only for their own families and communities but for society at large. Even today, nearly 75 percent of nonprofit employees are women. There’s a gender gap in leadership, which is an issue that needs addressing, but the overarching point is that women have long fueled philanthropic work in the world.
Now that women have more options to start a business and drive change, they are focused on protecting the future. They are able to look at investment and the creation of businesses as things that go way beyond just return. I certainly wouldn’t want to give the impression that women don’t care about making money. But it seems to be easier for women to recognize that you can have financial returns and a social return as well.
Kristin: Our research in the Entrepreneur Report shows that it’s not just carbon emissions that women care about when it comes to the environment. They are also more likely to see a reduction in the use of non-biodegradable material (like plastic) as a measure of successful investing. In fact, it is the third most important success metric for women entrepreneurs beyond financial returns.
From your perspective, why are women leading the charge here?
Julie: Women tend to take a very practical approach to sustainability, both in business and in their personal lives. A 2020 survey found that women are far more likely to be conscious consumers than men—63 percent of women think about sustainability when shopping, compared to 50 percent of men. The trend is that they’re just more willing to make lifestyle changes for a healthier economy, a healthier planet, and to reduce poverty.
That translates very easily into environmentally friendly behavior in their business lives, like focusing on reducing plastics. It’s an outgrowth of women’s general concerns for the future.
“The second most important measure of success for women entrepreneurs is reducing unemployment. ”
Women are also quite used to coming up against barriers, whether it’s access to capital or cultural issues. And because of that, I have found that they deeply understand structural obstacles and the special skills required to overcome them. So I believe it’s less daunting for them to just get to work, even when faced with big challenges like climate change, because they have the skills to do it. I think it’s exciting when women can take those great skills that may have applied to more personal issues in the past and apply them to global challenges.
Kristin: The second most important measure of success for women entrepreneurs is reducing unemployment. Entrepreneurs are often job creators through their companies, but of course, unemployment is a complex issue. What social sustainability issues are at play for women in addressing the reduction of unemployment?
Julie: As we know, during COVID-19, women have been hit much harder than men in terms of unemployment, and that’s a big sustainability concern. We don’t want to lose the progress we’ve made in terms of women in the workforce. Women entrepreneurs will play a role in helping other women back into employment because they understand what happened. They understand the set of factors that drove women out of the workforce in 2020, like insufficient childcare, low pay, lack of family-friendly employee policies. These are issues of equity. It’s my hope and expectation that women business leaders will be at the forefront of, not just creating jobs for those women who lost them, but restructuring the workplace so women can experience more stable, resilient careers in the future.
And truly, it’s more than just a hope. Research has shown that women tend to hire more women than men do. It’s certainly not the responsibility of women business leaders alone to expand employment to more women—everyone should be focused on that, particularly now—but it’s just reality. It’s what women do.
Kristin: Is compassion a motivator for leadership? Does caring more about something, like the environment, help women take the lead in sustainable business?
Julie: Yes. The very strong answer to the first question is yes. Caring about something is not gender-specific. For example, Bill Gates cared very, very deeply about transforming the world through his company. And I think he was successful because he cared so much.
But women do care so much about the environment—again, it relates to a healthy world, healthy families, a healthy economy. One great example is right in our own backyard. As a bank, we are very supportive of the Sustainable Ocean Alliance and its founder Daniela Fernandez, who is such an amazing young woman entrepreneur. She started Sustainable Ocean Alliance—a global network of ocean advocates—because she cared so much about what was happening. There’s another really impressive woman, Lynn Jurich, CEO of Sunrun, who founded the residential solar company because she really wanted to get less expensive clean energy to families. A number of women entrepreneurs have gone into sustainable fashion, for example, to eliminate waste and set environmental standards.
The list is huge, and for all of these women entrepreneurs, it stems from a passion for making the world a better place and recognizing needs.
“Women business leaders are finding that adhering to ESG standards makes for a healthier, more sustainable business. ”
Kristin: Do you have advice for women entrepreneurs looking to bridge the gap between their environmental and social values and building their business?
Julie: Even if they don’t have a stated mission about sustainability, women business leaders are finding that adhering to the ESG standards makes for a healthier, more sustainable business. Greater transparency, better governance, diversity, gender parity, and environmental concerns—in terms of risk management and costs, those things all make a much stronger business. So even if your business isn’t focused on sustainability right now, being focused on ESG is simply a good business practice, and it’s a good starting point.
The other thing they can do is align their financial decisions around sustainability. That can mean seeking out a sustainable option at every point of the financial spectrum, starting from where you hold your mortgage to how you invest your portfolio, how you manage donor-advised funds for charitable giving and even all the way to a foundation endowment. All of those things can help bridge the gap between your current business practices and your concerns about the environment and social values.
Kristin: What advice would you give women looking to invest in their values in other ways, whether that is investing in businesses, in public markets, or something else?
Julie: There are so many ways to invest in your values these days. Fifteen years ago, it was much, much more limited. Public markets are the easiest way to go. It’s the low-hanging fruit, including everything from ETFs to mutual funds to structured notes or custom portfolios. There are lots of ways to support women-led businesses now. In fact, there are private equity funds that just focus on supporting women-led businesses, so that’s a really exciting option.
But again, I would start by looking to something very simple: Where does your checking account sit? Where does your mortgage sit? Where are your foundation dollars and your donor-advised fund dollars? All of those things matter.
Kristin: The Entrepreneur Report tells us that those who already invest sustainably in public markets are prepared to quadruple their financial commitment to sustainable investments over time. How will these values and commitments shape the future of investing and even shape our world?
Julie: There is no way to overstate the impact of entrepreneurs quadrupling their sustainable investments. That change in investing will help shape our future. These business leaders can clearly see that the future is all about the energy transition and building cleaner, more responsible industry. And by investing in that future, they are helping to realize it.
It’s also surprising because it’s not surprising. Their plans show just how mainstream sustainable investing is today. Anyone who still thinks it’s a fringe activity isn’t following the money. They’re not seeing the writing on the wall. There is major innovation on the horizon—and women aren’t afraid of it. They are embracing it as an area of opportunity.
From a personal standpoint, because we’ve seen this enormous growth—we’re talking trillions of dollars flowing into sustainable solutions in the last few years—this will shape our world because these dollars are actually flowing to solutions. When I say “solutions,” what I really mean are the UN Sustainable Development Goals (SDGs). We have 17 identified global challenges. The more dollars we can get to flow into these sustainability challenges, the more funding and policy will be in place to shape the future of impact investing, and the world will be a better place for the future. No question.
Kristin: Thank you, Julie. I think we both agree that this is a critical time where women are leading the way, and collectively we can all make a difference in a sustainable recovery.
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