How neglecting women costs financial industry $700bn a year
Oliver Wyman, a US management consultancy...
A new report shows that gender inequality in the financial sector is harming industries and consumers alike.
Oliver Wyman, a US management consultancy, has said that the finance industry is losing out on US$70bn revenue annually, according to a recent report. By not taking women into consideration when presenting products to the market, financial institutions have been limiting their reach significantly.
“Women are arguably the single largest under-served group of customers in financial services,” Jessica Clempner, the report’s lead author, said in a statement on 12 November. “Firms are leaving money on the table by not listening to and understanding their women customers.”
A debate has grown around the issue of lender bias within the financial industry, particularly since a tweet from David Heinemeier Hansson, creator of Ruby on Rails, went live on 10 November. In the tweet, Hansson pointed out that his wife was offered a rate 20 times lower than his own when applying for an Apple card. An investigation is currently underway looking into unintentional bias in the algorithms used to determine the limits offered to customers.
According to the report, when products are presented as gender neutral they are often defaulting to male centric requirements, with wealth products being a major contributor to this imbalance. An example is given around insurers: if life policies aimed at women were granted the same rates as those offered to men, the industry could generate an extra $500mn in new premiums, according to Oliver Wyman’s estimations. Women also have a tendency to hold more assets in cash rather than stocks or intangible finances, costing wealth and asset managers a potential $25bn in annual fees.
The issues are exacerbated by a lack of women at a senior level within the industry. Just 20% of finance executives are female, which is an improvement since the 16% of 2016, according to Oliver Wyman’s report. The financial sector has therefore made improvements in recent history, but it still has some considerable distance before a balance is struck around gender equality in the industry. In the meantime, it is costing the financial sector billions each year.
UK's emissions target: to reduce emissions by 78% by 2035.
The UK government announced two days prior to Earth Day, that it will set the world’s most ambitious climate change target into law, to reduce emissions by 78% by 2035.
This Carbon Budget limits the volume of greenhouse gases emitted over a 5-year period, from 2033 to 2037, taking the UK more than three-quarters of the way to reaching net-zero, by 2050.
It will ensure that Britain remains on track to end its contribution to climate change, whilst remaining consistent with the Paris Agreement temperature goal to limit global warming to well below 2°C and pursue efforts towards 1.5°C.
For the first time, this Carbon Budget will incorporate the UK’s share of international aviation and shipping emissions.
On Earth Day (22 April), Prime Minister Boris Johnson will address the opening session of the US Leaders’ Summit on Climate, hosted by President Biden. The Prime Minister will urge countries to raise ambition on tackling climate change and join the UK in stretching targets for reducing emissions by 2030, to align with net-zero.
The government is already working towards its commitment to reduce emissions in 2030, by at least 68% compared to 1990 levels through the UK’s latest Nationally Determined Contribution - the highest reduction target made by a major economy to date. Today’s world-leading announcement builds on this goal to achieve a 78% reduction by 2035.
The new target will become enshrined in law by the end of June 2021, with legislation setting out the UK government’s commitments laid in Parliament tomorrow (Wednesday 21 April).
Prime Minister, Boris Johnson, said:
“We want to continue to raise the bar on tackling climate change, and that’s why we’re setting the most ambitious target to cut emissions in the world.
“The UK will be home to pioneering businesses, new technologies and green innovation as we make progress to net zero emissions, laying the foundations for decades of economic growth in a way that creates thousands of jobs.
“We want to see world leaders follow our lead and match our ambition in the run up to the crucial climate summit COP26, as we will only build back greener and protect our planet if we come together to take action.”
Business and Energy Secretary, Kwasi Kwarteng, said:
“The UK is leading the world in tackling climate change and today’s announcement means our low carbon future is now in sight. The targets we’ve set ourselves in the sixth Carbon Budget will see us go further and faster than any other major economy to achieve a completely carbon neutral future.
“This latest target shows the world that the UK is serious about protecting the health of our planet, while also seizing the new economic opportunities it will bring and capitalising on green technologies – yet another step as we build back greener from the pandemic we lead the world towards a cleaner, more prosperous future for this generation and those to come.”
The UK over-achieved against its first and second Carbon Budgets and is on track to outperform the third Carbon Budget which ends in 2022.
This is due to significant cuts in greenhouse gases across the economy and industry, with the UK bringing emissions down 44% overall between 1990 and 2019, and two-thirds in the power sector.
Moreover, the UK continues to break records in renewable electricity generation, which has more than quadrupled since 2010 while low carbon electricity overall now gives us over 50% of our total generation.