Legal & General Investment Management (LGIM) has launched the first fund that aims to increase gender diversity in UK companies.
The L&G Future World Gender in Leadership UK Index (GIRL) fund will focus on UK-listed companies and aims to boost gender diversity. The fund will invest more capital in companies that have better levels of female representation.
LGIM head of personal investing Helena Morrissey said: “Gender inequality is one of the key issues of our time – and one that generates so much frustration. Rather than feeling trapped or despondent, let’s do something about it.
“I’m excited about the launch of the GIRL fund, which empowers us all to use our money to help companies to progress. When we invest in the success of women, we are investing in the success of business. Collectively, we can help achieve gender equality and improve gender diversity in the UK.”
The fund’s investment process will rank a company based on four factors that demonstrate its gender diversity: women on the board, women executives, women at management level and women in the workforce. Companies are then ranked and scored based on these factors.
L&G Future World Gender in Leadership will track an index created by the firm that consists of 350 of the largest companies in the UK and will be available to retail investors through LGIM’s platform and also through financial advisers.
Clare Payn, head of corporate governance, North America at LGIM said: “LGIM has been active in the diversity debate since 2011, and has been voting against all male boards since 2015. We see this as a business issue. Tapping into the most diverse talent pool is vital in a competitive and changing market for companies to remain relevant.
“Boards made up of just men, from the same socioeconomic backgrounds, cannot be the best forum for challenging debates. The fund is a natural progression given the engagement we’ve been undertaking.”
Earlier this year, the fund group exerted further pressure on UK companies when it made the decision to start voting against the chairs of boards of FTSE 350 companies that did not meet the 2017 target of appointing a 25 per cent female board.