“Time’s Up”… #MeToo … allegations of abusive behavior by corporate chiefs … the groundswell of public attention to sexual and gender-based violence (SGBV) is revealing how pervasive it is at all levels of society, in all industries. From an investor’s perspective, the burgeoning movement to root out abuse raises the question of whether capital markets participants might be complicit in its persistence.

It also raises the possibility that issues related to SGBV might evolve into a material financial risk for companies that don’t take appropriate action.

Traditionally, impact and gender lens investing has focused on discrimination, pay equity, and workplace conditions more so than the human rights violations embodied by SGBV. Investors lack access to data regarding the extent of the problem and do not possess the means to gauge the consequences for stakeholders or investment performance. We believe it is incumbent upon investors to demand greater transparency on issues of SGBV related to business activity; to hold companies accountable for reducing SGBV; and to incentivize companies to minimize SGBV.

With this report we launch an inquiry into how investors might better understand SGBV and contribute to a solution, as well as examine what kinds of data would generate useful insights. Key findings include:

  • Converging technological, behavioral and regulatory trends may transform SGBV into a strategic and operational risk for companies;
  • SGBV may present a material risk to companies and industries in three key areas: negative productivity impacts; restricted social license to operate; and consumer action.
  • Two initial indicators of companies’ management of SGBV are: disclosure on sexual harassment and initiatives to support victims in reporting it; and impact on outside stakeholders (e.g., whether companies expect local communities to accept the costs of SGBV). How companies are positioned on these issues may yield insights into their exposure to SGBV as a risk, as well as their understanding of their roles in facilitating SGBV.

Download our full report here.

Emma Currier is a Research Associate at Cornerstone Capital Group. Emma graduated with a Bachelors of Arts degree in Economics from Brown University in May 2016. While at school, she worked with the Socially Responsible Investing Fund and as a teaching assistant for the Public Health and Economics departments. She spent her sophomore summer researching differences between American and Indian educational styles in Arunachal Pradesh, India, and completed a summer investment bank analyst position with Citi in the Media & Telecom group in 2015.

Sebastian Vanderzeil is Director, Global Thematic Research Analyst with Cornerstone Capital Group. He holds an MBA from New York University’s Stern School of Business. Previously, Sebastian was an economic consultant with global technical services group AECOM, where he advised on the development and finance of major infrastructure across Asia and Australia. Sebastian also worked with the Queensland State Government on water and climate issues prior to establishing Australia’s first government-owned carbon broker, Ecofund Queensland.