Investing with Purpose

"We are proud to feature an article by Rejina Rahim of Wahine Capital Sdn Bhd, where she examines Malaysia's poor gender equality rankings and barriers facing women's economic empowerment, explores how gender-sensitive finance approaches like gender-responsive budgeting and gender-based investing can help drive social impact, discusses women's growing global wealth projected to outpace men's worth over US$72 trillion, and offers perspectives on influencing policy through conscientious consumption and investment while advocating a gender-sensitive approach for a more equitable financial future; we invite readers to gain from Ms. Rahim's leadership on empowering women financially by reading the full article in Star Biz."

WOMEN wield considerable financial influence globally, controlling assets worth more than US$72 trillion (RM343.9 trillion) and a significant portion of spending, estimated at US$31.8 trillion. Studies project that women’s assets will outpace that of men’s in the coming years.

Investing trends are moving towards social responsibility and sustainability as a result of gender-sensitive finance, which includes strategies such as gender-responsive budgeting and gender-based investing.

This month’s column explores the pivotal role a more nuanced, female-focused financial approach can play in reshaping investment strategies and fostering wealth redistribution with consciousness.

Examining Malaysia’s position

The status of Malaysia in global gender equality metrics is rarely mentioned in our local mainstream media and should be given serious consideration.

In the World Economic Forum’s Global Gender Gap Report 2023, Malaysia ranked 102 out of 146 countries, behind Cambodia, Indonesia, Singapore, Thailand and Brunei. The report evaluates economic participation, education attainment, health, survival and political empowerment.

World Bank’s Women, Business and the Law Index 2023 highlights Malaysia’s poor performance, a score of 50, across eight indicators affecting women’s economic opportunities, such as mobility, pension, work, parenthood, pay and assets.

Women in Malaysia face significant barriers to economic empowerment in spite of their strong educational achievements. This shouldn’t happen in this day and age. If laws and policies cannot change the tide, I believe money will. According to Bursa Malaysia, the number of CDS accounts held by women have risen from 32% in 2020 to 36% as of Q1 2022.

Gender sensitivity in finance

Women have for a very long time faced barriers in accessing financial resources and opportunities, resulting in their under-representation in the financial sector.

With increasing awareness and advocacy, however, gender-sensitive finance is gaining momentum. Malaysia has made strides in achieving gender diversity on corporate boards, having achieved the minimum 30% women on Boards for the Top 100 PLCs last June 2023, but more efforts are needed to ensure equal economic distribution.

Financial empowerment of women is not just about benefitting half the population; it yields broader societal and economic advantages.

SRI and Islamic finance

Socially Responsible Investment (SRI) aligns with Islamic finance principles emphasising ethics and sustainability. However, there are few products or services harnessing the potential of women’s economic empowerment or Islamic finance as an SRI tool. Financial solutions that incorporate gender considerations are needed to address social issues such as poverty among single women-headed households.

Gender-responsive budgeting (GRB)

GRB is a key approach to address gender disparities in government budgets, policies and programmes. It aims to promote gender equity by analysing how budget allocations impact men and women differently across various sectors.

Malaysia has made some progress in adopting GRB, but more concerted efforts are needed to achieve meaningful change and improve global gender equality rankings, especially since a Gender Budgeting Manual was released by the Malaysian Women’s Ministry back in December 2005!

Gender-based investing

In gender-based investing, also called gender-smart investing, gender analysis is integrated into investment processes. In spite of the substantial growth of women’s assets globally, gender-based investing remains underutilised at 0.056%, representing only a fraction of the global US$30 trillion in sustainable investments.

An analysis by BCG and Nikkei Asia estimates that Asian women (ex-Japan) will hold US$27 trillion in wealth by 2026, US$6 trillion more than women in Western Europe. That’s a lot of money and an opportunity that should be considered and taken advantage of. Malaysia should leverage its position as a global Islamic finance leader to develop innovative products that drive social impact through gender-based investments.

As individuals, we may wonder how much influence we can have on policymakers and businesses. The answer lies in your power as consumers and investors. It is imperative that you consider the broader implications of your investment decisions as you navigate your journey of financial decision-making.

By adopting a gender-sensitive approach to consumption and finance, we can contribute to a more equitable and sustainable future. Let’s challenge traditional norms and channel our financial resources towards investments that benefit society as a whole. As we usher in the Lunar New Year, let’s embrace the Dragon’s spirit of benevolence and strive to create positive change through our financial actions.

If we started to care, perhaps we can move the needle in helping to get more foreign investments and increase the demand for the ringgit?