Prioritizing gender equality
The beauty of balance
Managers of Nordea’s Global Gender Diversity Strategy find value in companies prioritizing gender equality
Managers of Nordea’s Global Gender Diversity Strategy have chosen L’Oréal as one of their holdings. Of the UN’s 17 Sustainable Development Goals (SDGs), the company is actively working on 14 of them. One is Goal number 5: Gender Equality. This issue has been addressed in L’Oréal’s values for decades, long before the introduction of the SDGs.
Recognizing gender equality as a fundamental human right and a necessary foundation for peace, prosperity and sustainability, many public and private actors are taking steps to close the gender gap. This initiative has gained significant traction because in addition to being a worthy social cause, it has genuine economic merit. “Ensuring that more women are working and leading in the workplace is simply good business. For companies it should make sense to take advantage of the largest talent pool especially as demographic headwinds emerge,” says Julie Bech, co-Manager of Nordea’s Global Gender Diversity Strategy.
For years, L’Oréal has been strongly committed to ethics and equality. For example, there is a system in place throughout the organization that gives all mothers at least 14 weeks of paid leave – even if local maternity leave is shorter and unpaid. In addition, the company aims to provide all fathers or parents with 10 days of paid vacation, no matter where in the world they work.
In the Nordics, L’Oréal’s practice of increased pay during maternity leave is not unusual, but in other parts of the world it represents a significant improvement for women.
Equal pay is also important to the company, and senior management wants to increase equality in areas where it is not in order. The aim is to have an equal number of men and women in the workforce and to include people from different social, cultural and ethnic backgrounds.
“It is important for our organization to reflect the reality in which users of our products live,” says Mai-Britt Rasmussen, Marketing Director, Consumer Products, L’Oréal Denmark. “This requires a strong commitment to equality and diversity. We set individual concrete goals and strive to achieve them regardless of local circumstances.
“However, we are a commercial company competing with others for profit, so we also pay great attention to having the best talent. Therefore, it makes no sense to allow gender to dictate hiring restrictions, but rather to ensure that all professionals have the opportunity to use their skills.”
L’Oréal has approximately 86,000 employees in 150 countries. The company’s in-house Share & Care program ensures common ethical values throughout the organization. At the local level, the company offers health care, day care and assistance to sick or elderly workers in areas where public services are inadequate. L’Oréal also emphasizes ethical values when working with external partners.
“We are a global player, and we are also active in markets and societies that do not necessarily share our values and our vision of equality,” says Rasmussen.
This is the case, for example, in Southern Morocco, where L’Oréal procures vegetable argan oil for use in many of its skin and hair care products. Oil is squeezed from the fruit of argan trees growing in the Moroccan desert. Until the turn of the millennium, it was mainly used by locals. Today it is one of the most popular ingredients in beauty care products. As L’Oréal needs more and more oil, the company has been involved in setting up small local Fair Trade cooperatives. They enable local women to support their families independently of their male family members, while contributing to economic growth in the area..
L’Oréal in numbers
- At Q3 2019, L’Oréal generated revenue of EUR 21.99 billion, a record 7.5 percent growth.
- In 2018, women accounted for 69 percent of L’Oréal’s total staff. 46 percent of the Board was women, 31 percent of the executive committee was women and 66 percent of general management positions were held by women.
- In 2020, L’Oréal made the Bloomberg Gender Equality Index for the third year running. For the tenth time in 2018, the Ethisphere Institute named L’Oréal one of the most ethical companies in the world.
L’Oréal’s collaboration with South Moroccan women helps them manage their income, invest in the future and send their children to school. (photo: L’Oréal)
Lofty goals are easy to set, but delivering results is a matter of commitment. How can the objective of equal numbers of men and women be achieved in practice, without quotas being used to recruit workers?
Mumina Hassan is L’Oréal’s Head of Human Resources in Copenhagen. In her view, the importance of equality and diversity needs to be made clear. Because top management has integrated gender equality into its strategy, results are constantly being measured within the organization.
“At the corporate level, human capital is something a company can really profit on, and something that is very hard for competitors to copy,” says Julie Bech. “There is great demand for the best talent, so if a company succeeds in creating equal opportunities for everyone, it will have a wider pool to choose from. This gives the company an edge compared to competitors who will not have the same growth potential. Further, the company will be more capable of maintaining and facilitating the development of its best talent if it takes an objective approach to advancing employees. Likewise, when a company hires externally, the pool of talented candidates is simply larger if it includes all available candidates. There are multiple studies that show gender diversity is good for a company’s bottom line. This is, amongst other things, due to the widening of the talent pool.”.
L’Oréal’s “Sharing Beauty With All – The L’Oréal Sustainability Commitment” reports that by 2018, the company’s Solidarity Sourcing program had helped 63,584 people in socially or economically disadvantaged areas all over the world to get jobs. The goal is to help 100,000 people get jobs by 2020.
Source: Sharing Beauty With All – The L’Oréal Sustainability Commitment
Today, ethical values enhance L’Oréal’s recruitment potential. Rasmussen, who has been with L’Oréal for over 20 years, emphasizes the importance of senior management setting value goals. “When things can be measured, they can lead to action and launch projects to ensure success,” she says. “Today, there are far more women in senior management and the social background of employees is much more diverse. This means that we no longer value similarity because we can learn more from each other as diversity increases. I see it in my own teams as well, when there are many different perspectives and views. We reflect much better the reality in which the users of our products live. I think it’s good for the whole organization”
She recently attended a conference in Morocco where L’Oréal’s country manager is a woman. “The organization sends such a conscious message, because in this country’s culture, a woman is not the self-evident first choice. Situations can be more difficult because the leader is a woman and not a man. However, our message is that the head of the Moroccan office is qualified and competent.”
Out of a total of 17 sustainability goals, L’Oréal is actively working on 14 goals. One of them is Goal number 5: gender equality. These issues have been taken into account in the company’s values for decades, well before the introduction of the Sustainable Development Goals.
“We have clearly noticed that awareness of these issues is increasing. People are often surprised to hear how strongly L’Oréal’s values are reflected in our organization and how far we have taken responsibility, ethics, equality and sustainable development,” says Rasmussen. “Many may think that the beauty industry is all about strong brands and beautiful products. However, senior management is strongly committed to our ethical values and is therefore a strategic priority that is reflected throughout the organization.”
L’Oréal achieved the highest level of growth in more than a decade in Q3 2019, continuing to outperform the beauty market. In addition, the company has been named one of the most ethical companies in the world over 10 times and remains at the forefront of various equality studies.
“First and foremost, we want to create value for our customers,” says Julie Bech. “Nordea’s Global Gender Diversity Strategy offers clients the possibility of good returns with a twist where they can actually impact society by reaching sustainability goals related to diversity. Sustainable investments will play a big role in the future. The companies willing and able to put in the extra resources to make sure they are diverse will benefit from those actions going forward.”
Equileap recently published its 2020 European Report in which it evaluated 225 companies.
L´Oréal ranked first in terms of gender equality
Nordea Asset Management is the functional name of the asset management business conducted by the legal entities Nordea Investment Funds S.A. and Nordea Investment Management AB (“the Legal Entities”) and their branches, subsidiaries and representative offices. This document is intended to provide the reader with information on Nordea’s specific capabilities. This document (or any views or opinions expressed in this document) does not amount to an investment advice nor does it constitute a recommendation to invest in any financial product, investment structure or instrument, to enter into or unwind any transaction or to participate in any particular trading strategy. This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instruments or to participate to any such trading strategy. Any such offering may be made only by an Offering Memorandum, or any similar contractual arrangement. Consequently, the information contained herein will be superseded in its entirety by such Offering Memorandum or contractual arrangement in its final form. Any investment decision should therefore only be based on the final legal documentation, without limitation and if applicable, Offering Memorandum, contractual arrangement, any relevant prospectus and the latest key investor information document (where applicable) relating to the investment. The appropriateness of an investment or strategy will depend on an investor’s full circumstances and objectives. Nordea Investment Management AB recommends that investors independently evaluate particular investments and strategies as well as encourages investors to seek the advice of independent financial advisors when deemed relevant by the investor. Any products, securities, instruments or strategies discussed in this document may not be suitable for all investors. This document contains information which has been taken from a number of sources. While the information herein is considered to be correct, no representation or warranty can be given on the ultimate accuracy or completeness of such information and investors may use further sources to form a well-informed investment decision. Prospective investors or counterparties should discuss with their professional tax, legal, accounting and other adviser(s) with regards to the potential effect of any investment that they may enter into, including the possible risks and benefits of such investment. Prospective investors or counterparties should also fully understand the potential investment and ascertain that they have made an independent assessment of the appropriateness of such potential investment, based solely on their own intentions and ambitions. Investments in derivative and foreign exchange related transactions may be subject to significant fluctuations which may affect the value of an investment. Investments in Emerging Markets involve a higher element of risk. The value of the investment can greatly fluctuate and cannot be ensured. Investments in equity and debt instruments issued by banks could bear the risk of being subject to the bail-in mechanism (meaning that equity and debt instruments could be written down in order to ensure that most unsecured creditors of an institution bear appropriate losses) as foreseen in EU Directive 2014/59/EU. Nordea Asset Management has decided to bear the cost for research, i.e. such cost is covered by existing fee arrangements (Management-/Administration-Fee). Published and created by the Legal Entities adherent to Nordea Asset Management. The Legal Entities are licensed and supervised by the Financial Supervisory Authority in Sweden and Luxembourg respectively. The Legal Entities’ branches, subsidiaries and representative offices are licensed as well as regulated by their local financial supervisory authority in their respective country of domiciliation. Source (unless otherwise stated): Nordea Investment Funds S.A. Unless otherwise stated, all views expressed are those of the Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches, subsidiaries and representative offices. This document may not be reproduced or circulated without prior permission. Reference to companies or other investments mentioned within this document should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future. © The Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches, subsidiaries and/or representative offices.