UK: The gender pay gap in 2022: how it affects your ESG score
Your gender pay gap reporting can have a significant impact on your ESG metrics. So, as we head towards the 2022 gender pay gap deadline, what improvements can you make?
Since the gender pay gap regulations first came into effect in April 2017, we have seen organisations report their figures with often little or no change in their reported pay gap. In 2021, the fourth year of reporting, that may have become a little embarrassing.
This year it is different. The lack of progress could have significant financial consequences.
Closing the gender pay gap to improve ESG
An organisation’s gender pay gap could impact their ESG metrics. This could potentially restrict their ability to tender for work or to access a share of the wall of ESG funding that has been building. Organisations best able to demonstrate an accurate understanding and explanation of their gender pay gap will be viewed as having greater transparency, translating into higher ESG scores. This isn’t something that you can simply pull out of the bag, especially as a supplier, when requirements can change overnight. You need to be on the front foot.
It is interesting that the gender pay gap is not just about equity and culture. Research has shown that organisations with lower pay gaps outperform others. Investors could take a view that organisations with a high gender imbalance pose greater risk.
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