“As an investment opportunity, gender diversity is about identifying the ways in which achieving balance in representation, empowerment and economic opportunity is material for financial outcomes,” said Lily Scott Trager, director of Investing with Impact at Morgan Stanley Wealth Management.

The framework incorporates the following approaches:

• Gender diversity as a screen: Minimize exposure to companies with poor gender diversity records;
• Gender diversity leaders: Identifying companies with leading gender diversity records as a means of achieving both financial return alongside greater gender balance or equality;
• Gender lens investing: Through this approach, financial decisions are evaluated with the aim of creating greater gender balance and a better world for women and girls. Examples include investments in companies with greater representation of women on boards of directors and in senior leadership, and in funds focused on women’s healthcare solutions or increasing access to capital for women entrepreneurs in developing countries. ;
• Shareholder engagement: The idea that, across all approaches, engagement with publicly-traded companies can be an important and effective tool in driving better outcomes; and
• Manager and strategy selection: Choosing portfolio managers or investment firms that are female- and/or minority-owned.

“As greater gender diversity and balance is reached across the macroeconomic landscape and as the business case for gender diversity becomes more apparent, our objective is to help investors position their portfolios to take advantage of these opportunities,” said Lisa Shalett, head of investment and portfolio strategies at Morgan Stanley.

The firm launched its Investing with Impact Platform in 2012.