March 7 is Equal Pay Day in Germany. In other countries, the international day of action, which draws attention to equal pay between women and men, is celebrated on other dates. In the various countries, Equal Pay Day is the day up to which women would work for free if they were paid the same as men from that day onward (for society as a whole). Equal Pay Day will be celebrated in Switzerland on February 20, in Austria on February 21 and in Germany on March 7, 2022.

Since women work part-time more often than men and often have different qualifications, the gender pay gap must be adjusted for these variables. All things considered, women in Germany were paid an average of 18 percent less per hour than men in 2022, according to the Federal Statistical Office. But even when adjusted, a difference remains: women with comparable qualifications, jobs and employment histories to men earned on average 7 percent less per hour than their male colleagues. This is not a phenomenon of German-speaking countries; internationally, the situation is no better, according to the OECD.

Das geschlechtsspezifische Lohngefälle ist das Prinzip der nachteiligen Auswirkungen (PAI)
"Experience to date shows that this grievance is remedied far too slowly on a voluntary basis. Without a binding legal framework, hardly anything happens," says Andreas von Angerer, Head of Impact at Inyova. Inyova is a platform for digital impact investing, based in Zurich. As a result, the EU counts the gender pay gap among the Principle Adverse Impacts (PAI), the most important adverse impacts on sustainability factors that must be reported under the EU Disclosure Regulation (SFDR), he says. "This makes the financial equality of women in companies an important sustainability factor in investment decisions," von Angerer said.

Valid data are required for reporting in accordance with SFDR. Data on the proportion of women in management and supervisory boards as well as in the overall workforce are already collected in many places. However, there is often a lack of data on middle management. "They best show whether there is still the invisible glass ceiling in the company that women bump up against, especially between middle management and C-level," says von Angerer. The data collected also often reveals nothing about salary differences within the same positions, because those who earn outside the pay scale have to negotiate for themselves. In this respect, women are often still more reticent than men. This is perhaps also because they usually have to expect significantly stronger counter-reactions than men.

Investors should demand more transparency
To meet the multiple challenges of our time, companies should strive for diversity and therefore the highest possible proportion of female managers. This requires appropriate guidelines and measures. Transparency is needed to identify positive examples. This can increase the pressure on companies and improve the position of investors to demand necessary changes.

Voting at Apple
There is still a long way to go. This is demonstrated by Apple, whose investors have until March 9 to vote on whether the tech company should publish its average gender and nationality pay gap, including the associated political, reputational, competitive and operational risks. Voting rights consultancy Institutional Shareholder Services (ISS) has advised Apple investors* to vote in favor of the disclosure. "For Inyova, it is natural to support the motion on behalf of impact investors*. Because only with the right data can the success of the company's diversity and inclusion activities and the handling of the associated risks ultimately be assessed," says Andreas von Angerer.

Apple's management rejects the publication. "It remains to be seen how Apple's annual general meeting in 2023 will decide - last year, only about a third voted in favor of publishing the report," von Angerer said.

There are still only a few positive examples
He points to investment firm Arjuna Capital, which reports with shareholder advocate Proxy Impact that only 11 companies currently disclose their average by population and global unadjusted gender pay gaps. They include Mastercard, Bank of New York Mellon, American Express and Citigroup, among others. A European example of transparency in pay for employees of different populations and genders is AcadeMedia, the largest independent education provider in Northern Europe, according to Arjuna Capital. In an annual salary survey, the company ensures that salaries between genders are nearly equal - the difference is marginal at less than one percent.

Other figures show that wage transparency laws do not reduce productivity and profitability. "However, in addition to data collection and transparency, strong enforcement mechanisms for workers - such as exist in Denmark and the UK - are needed to reduce the gender pay gap. Employees must have sufficient bargaining power at both the collective and individual levels to enforce their rights," von Angerer notes. This, in turn, requires more women in management positions, in equivalent positions with far-reaching decision-making powers to those currently held by men. Only with a sufficient number of women in management positions can attitudes be changed at the top of companies and serve as a role model for everyone in the company.

Foto: Inyova

Profilbild von Anke Dembowski

Anke Dembowski

Anke Dembowski is a financial journalist and author of various investment fund-related and other financial books. She is also a co-founder of the "Fondsfrauen" network.

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