Byline: Kelly Robbins
Quite frankly, the gender considerations in supply chains can be frightening: modern slavery, gender-based violence, and very unstable income situations or unsafe working conditions for informal jobs. We saw a lot of these issues when we worked on gender in recycling supply chains that include waste-picking at landfills. Compounded with care economy issues and the reality that many women in these supply chains bring their children to work with them, the lives directly impacted number in the millions.
We are increasingly finding investable companies within those supply chains that are proactively and independently working on solutions to improve conditions for women. This is particularly encouraging that companies see strong and transparent supply chains as an essential risk or opportunity for more stable return.
Today, more and more investors – both public and private – are looking to address gender issues across their supply chains and are dedicating significant resources and time to support this effort.
We take this seriously, and have begun incorporating gender supply chain considerations into our own processes at Sagana, inside our clients’ portfolios both with existing portfolio companies as well as pipeline companies in due diligence. Our work as investors is focused on understanding companies: understanding what the company knows about itself, assessing what the company doesn’t know about itself or its market, and assessing the risks the company might not be thinking about.
In reality, having a conversation about gender imbalance in the supply chain is no more difficult than the other elements of an investment officer’s role. But it can be uncomfortable and confrontational to walk into a meeting and ask what a company is doing to address modern slavery in their sector. So how can investors develop a process that removes confrontation and increases transparency when working with portfolio companies? It can be as simple as a few steps:
1. Equip investment officers with questions: approaching companies with a set of simple, non-confrontational questions will help your team start conversations to better understand if and what companies are proactively doing to stabilize their supply chains, including whether there are gender or minority considerations included in that process. Including these questions signals that you’re interested in addressing the gender imbalance in supply chains without needing to launch a company-wide policy or program.
2. Recognize this is a nuanced topic: gender inequality isn’t always clearly obvious in all parts of the supply chain, so it is important to recognize that conversations might focus on the stability of supply chains instead of gender.
For example, a discussion might focus on how difficult it is to prove that the materials in a supply chain are legal, such as in the lumber industry, which has been criticized for a lack of transparency around illegal harvesting. While this issue might not seem to have a gender aspect, beginning a conversation about transparency in tracking materials might lead us to better understanding where there is informal employment or other risks stemming from poor oversight. By discussing something at the forefront of the minds of that business, we can open the door to deeper conversations about our impact.
3. Recognize risks and opportunities: investors and companies can work together to take advantage of the ways gender actions can drive growth. For example, companies can increase productivity by increasing workplace safety and reducing instances of gender-based violence. Companies can also strengthen capacity in their supply chains by up-skilling women, which can improve the quality, transparency, and compliance throughout the value chain.
4. Build in an information-gathering exercise into regular reporting cycles: whether during annual monitoring and evaluation, quarterly financial reporting or an initial due diligence phone call, making room for a conversation about supply chains is much more straightforward and collaborative than asking companies to undertake a project or create a report analyzing potential gender considerations or issues. It will allow you to get to the crux of the issues faster and in a way that feels less pressured.
When we approach the subject of gender imbalance in our supply chain, the goal is to make investment processes more transparent and ensure we are designing more inclusive systems. Ultimately, the changes and solutions that address these issues benefit more than women and children alone – by increasing the stability in our supply chains we benefit the men and other populations that are also involved, while strengthening the longevity and performance of the business.