As of 12/15/23, Impax has updated its fossil fuel policy. Learn more here.

A version of this article first appeared in Green Money Journal.

Gender lens investing in the United States was really an invention of the late, great Linda Pei and her business partner, Leslie Christiansen. These two pioneers founded FEMMX Financial Co., which launched the Women’s Equity Fund in 1993. At the time, there was scant research backing their investment thesis – the first studies linking gender diverse corporate leadership with financial results were published by Catalyst in 2004 – but Linda and Leslie believed that women’s contribution to the bottom line would be measurable and accretive over time.

I had a hunch that they were right. When I became President of Impax (then Pax World) in 2005, one of the first things I did was reach out to see whether they might be interested in partnering, or even selling their business. I had just finished reading The Wealth and Poverty of Nations by historian David E. Landes, in which he wrote: “The best clue to a nation’s growth and development potential is the status and role of women”. I recall thinking that if gender equality contributes at the macro-economic level, it likely contributes at the micro-economic level as well. If it is good for countries, then it must be good for companies.

Prior to joining Impax, I had already been involved in co-authoring, along with Julie Gorte and Nikki Daruwala, the Calvert Women’s Principles – the first global code of conduct on how companies should treat, advance and empower women. The UN, which had embraced David E. Landes’ thesis that gender equality can help lift countries out of poverty, was so enamored that they adopted them as the UN Women’s Empowerment Principles. I was later honored to co-chair the Leadership Group of the Women’s Empowerment Principles for several years.

Impax purchased FEMMX in 2006 as the basis for the development of the Impax Global Women’s Leadership Index, a proprietary index consisting of companies committed to advancing and empowering women. In 2014, in partnership with Sallie Krawcheck and Ellevate, we adopted a more systematic investment approach that we believed would better isolate the contribution that the ‘gender factor’ makes to a strategy’s performance. We hoped to make an apples-to-apples comparison between gender diverse companies and the broader market, and to prove that companies with greater gender equity outperform less enlightened competitors and the overall market over time. I believe we have met that burden of proof.

Those early, lonesome Catalyst studies have now been bolstered by decades of research demonstrating that gender diversity and equity are correlated with stronger financial performance. In my view, the research at this point is beyond compelling; it is overwhelming.

My colleague, Julie Gorte, publishes an annual review of the research linking gender equity, and equity, diversity and inclusion more broadly, with financial performance. Her most recent paper, “The Financial Impact of Diversity and Culture” was published in August 2023. In it, Julie not only reviews the literature on board diversity and management diversity, but on diversity and innovation, measured by such things as the number of patents, patent citations, research and development spending, and profits derived from new products. She also reviews the research linking diversity with sustainability, with better HR policies and increased productivity, and with stronger corporate cultures.

Suffice it to say that the literature supports a positive correlation between diversity – particularly gender diversity in executive teams – and better corporate financial performance. A strong relationship between corporate culture and human resources policies, and their correlation with financial performance, is another emerging theme. Finally, Julie finds that diversity supports both environmental and social aspects of the transition to a more sustainable economy, as it is positively correlated with more robust financial accounting and better sustainability outcomes, including environmental reporting and climate disclosures.

What’s more, our own proprietary company research aligns with trends Julie captures in her paper. In 2014, we created a proprietary tool, the Impax Gender Score, from a custom data set regarding both gender-diverse leadership and other measures of gender equity that we add to as more company information becomes available. We use this to rank each company in the MSCI World Index, from which we construct the Impax Global Women’s Leadership Index. The Gender Score has two aspects:

Leadership factors: women in executive management; women on boards; female CEO, CFO or board chair.

Workplace equity factors: pay equity initiatives; disclosure of demographic data; diversity targets; diverse talent pipeline initiatives; signatory to UN Women’s Empowerment Principles (yes, the Women’s Empowerment Principles remain relevant to this day!). An Impax team, led by portfolio manager Christine Cappabianca, recently conducted a quantitative study of each element of the Gender Score to determine whether the companies we consider leaders in promoting gender equity – both in leadership and in workplace practices – have better prospects for delivering alpha, or excess investment returns.

Chart title: Leadership factor performance
Subhead: Gender leaders vs gender laggards

Overview: The chart shows the equal weighted, cumulative monthly excess return of the top quartile of MSCI World Index companies versus the bottom quartile for the period of 12/31/2014 – 8/31/2023.

Source/footnote: Impax research and FactSet data as of 8/31/23

More information: Companies who do/don’t meet the following gender leadership criteria – women on board, women in management, woman CFO and woman CEO – are quartiled and the difference is shown for each factor over time.

Women on boardWoman CFOWoman CEOWomen in management
12/31/2014-0.044.325.736.36
12/31/2015-5.830.846.462.92
12/30/2016-8.51-3.314.113.92
12/29/2017-4.7-1.584.971.02
12/31/2018-4.993.117.227.27
12/31/20190.378.076.479.38
12/31/2020-2.519.84-0.895.04
12/31/202110.438.045.517.05
12/30/202214.938.029.5619.62
8/31/202311.654.958.2614.43

As you can see in the chart above, one leadership factor — women in management — has been a particularly significant contributor to alpha and indicator of company outperformance. Our analysis reveals that corporate culture counts, too.

Chart title: Workplace equity factor performance
Subhead: Gender leaders vs gender laggards

Overview: The chart shows the equal weighted, cumulative monthly excess return of the top quartile of MSCI World Index companies versus the bottom quartile for the period of 11/1/2020 – 8/31/2023.

Source/footnote: Impax research and FactSet data as of 8/31/23

More information: Companies who do/don’t employ the following policies or practices – pay equity initiatives, diversity targets, diverse talent pipeline and demographic data – are quartiled by investment returns and the difference between the top returning and bottom returning quartile is shown for each factor over time.

Diversity targetsDemographic dataPay equity initiativesDiverse talent pipelineThree or more diversity factors
11/30/20200.610.060.94-0.020.47
12/31/20200.510.320.3100.36
1/29/2021-0.4201.061.111.11
2/26/20210.221.280.932.943.64
3/31/2021-0.750.12.433.833.57
4/30/20210.872.263.674.786.69
5/31/2021-0.631.043.684.954.07
6/30/2021-1.280.683.924.824.46
7/30/2021-0.950.993.865.694.56
8/31/20210.442.073.255.746.26
9/30/2021-1.121.94.957.285.88
10/29/2021-2.581.094.37.255.29
11/30/2021-1.63.316.079.289.27
12/31/20210.326.188.8811.6515.43
1/31/20220.155.138.6710.7614.3
2/28/2022-1.575.278.3612.0415.01
3/31/20220.548.7710.9913.3220.25
4/29/20222.319.9612.0713.8421
5/31/20221.779.111.6111.6618.68
6/30/2022-1.067.3410.3812.2215.9
7/29/2022-1.926.029.6412.7614.63
8/31/2022-1.856.359.7113.315.69
9/30/2022-1.77.7711.1817.419.47
10/31/2022-0.438.1412.0715.2419.67
11/30/20221.5810.812.5814.1322.81
12/30/20220.798.9214.1314.721.08
1/31/20231.869.715.4315.323.73
2/28/20232.4311.081413.8424.2
3/31/20234.2713.5116.112.8126.81
4/28/20232.7410.0813.8513.6524.49
5/31/20232.127.7613.5916.3224.32
6/30/20231.766.9413.8316.2424.86
7/31/20232.137.4913.6417.5925.65
8/31/20232.897.813.6117.6326.8

Based on newer datasets that only go back to 2020, we found that workplace equity factors — specifically pay equity and diverse talent pipeline initiatives — emerged as significant gender-related factors correlating with company performance over this three-year period. Moreover, companies with three or more of these indicators tend to outperform those with two or fewer. In other words, specific practices advancing gender equity provide a window into culture, and stronger cultures contribute to better performance.

Our research reinforces that inclusive cultures and purpose-driven business practices can be contributors to outperformance. Although the Impax Global Women’s Leadership Index has faced some performance headwinds over the past few years – particularly being fossil-fuel-free at a time when the energy sector outperformed and not owning certain technology stocks – our approach to indexing gender leaders and avoiding gender laggards has illustrated added value over time, certainly since 2014. Inclusive companies tend to attract and retain talented employees from diverse backgrounds who can then drive innovation, productivity, customer loyalty and resilience.

Linda Pei and Leslie Christiansen were right. The UN was right. Impax is right.

Investing in gender equity, and in equity, diversity and inclusion (E,D&I) more broadly, is simply smart investing. It’s about investing in leaders rather than laggards, in the future rather than the past, which is what investing is all about. Finally, while the Impax Global Women’s Leadership Index may focus on gender diversity, we fully understand that diversity is a broader concept and category, and that gender is a broader concept and category as well. We anticipate and look forward to more research over time underscoring that it is people, in all their diversity and variety, who make the difference, and that organizations with people-focused cultures will make the strongest contributions over time as we transition to a more sustainable and inclusive economy.


The views, opinions, and forecasts included or expressed herein are as of the date indicated and are subject to change without notice. There can be no assurance that the strategies described will achieve their objectives and goals. The information presented herein is provided for general informational purposes only and is not intended to provide legal, tax, investment, or financial planning advice. It does not constitute an offer, invitation, solicitation, recommendation, or advice to buy or sell any securities, financial instruments, investments; to follow a particular investment strategy; to engage in any other transaction; or to engage Impax to provide investment advisory or other services.

Certain content (including data) contained within may include, or be based on, data obtained from statistical services, company reports or communications, or other third-party sources, that Impax believes are reliable. However, Impax has generally not verified this information where Impax believes the third-party source is reliable and, therefore, there is a risk that information from such third-party sources is inaccurate or incomplete. You should not rely on the information presented here as a basis for investment decisions.

The Impax Global Women’s Leadership Index is a customized market capitalization-weighted index created and licensed by Impax Asset Management (“IAM”) consisting of equity securities of issuers organized or operating in countries around the world that demonstrate a commitment to advancing and empowering women through gender diversity on their boards, in management and through other policies and programs, and an understanding of the potential business advantages associated with greater gender diversity, as rated by the IAM Gender Analytics team, with final approval by the IAM Women’s Index Committee. In addition, the companies comprising the Women’s Index meet certain environmental, social and governance (ESG) or sustainability thresholds, as rated by MSCI ESG Research.

The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. The MSCI World Index consists of the following 23 developed market country indices: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

Indexes are unmanaged and not available for direct investment.

The Impax Gender Score broadly seeks to measure a company’s performance on issues related to gender diversity and equality. The Impax Gender Analytics team conducts in-house gender research and assigns the Impax Gender Score, a rating for each company in the MSCI World Index universe, that is based on the following gender leadership criteria: representation of women on boards of directors and in executive management, the hiring, promotion and retention of women, gender pay equity, a company’s ability to proactively issue and/or meet gender goals, or be a signatory to the Women’s Empowerment Principles (a joint initiative of the UN Global Compact and UN Women), as well as a company’s transparency about gender diversity data. These criteria are given different weights, with representation by women on boards and in management receiving the highest weightings. The final gender ranking is calculated by blending the scores over time to capture consistency of gender leadership. Companies are scored from 1-100, and a lower score indicates a higher ranking, with 1 being the highest score and 100 being the lowest score.

Impax Asset Management Group plc includes Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd., Impax Asset Management Ireland Ltd, Impax Asset Management LLC, and Impax Asset Management (Hong Kong) Limited (together, “Impax”). Impax Asset Management Ltd, Impax Asset Management (AIFM) Ltd and Impax Asset Management LLC are registered as investment advisers with the U.S. Securities and Exchange Commission (“SEC”), pursuant the Investment Advisers Act of 1940 (“Advisers Act”). Registration with the SEC does not imply a certain level of skill or training.

Sallie Krawcheck and Ellevate are not affiliated with Impax Asset Management. Impax is a trademark of Impax Asset Management Group Plc. Impax is a registered trademark in the EU, US, Hong Kong and Australia. © Impax Asset Management LLC, Impax Asset Management Limited and/or Impax Asset Management (Ireland) Limited. All rights reserved.

Joseph Keefe

Former President, North America

Joe Keefe held the role of President and CEO of Pax World Management starting in 2005, and continued serving as President of Impax Asset Management, North America, from the firm’s acquisition in 2018 through his retirement in 2024. Joe is a recognized leader in the sustainable investing industry in the US, acknowledged for his work promoting sustainable investing and ESG analysis, and especially for his advocacy supporting and enabling gender lens investing. Though his leadership, Joe exemplified the culture and values of Impax.

Prior to joining the firm, Joe was President of NewCircle Communications, a strategic consulting and communications firm specializing in corporate social responsibility and public policy communications. He served as Senior Advisor for Strategic Social Policy at Calvert Group from 2003-2005 and as Executive Vice President and General Counsel of Citizens Advisers from 1997-2000. He is a former member of the Board of Directors (2000-2006) of US SIF, the trade association representing asset managers and investors engaged in sustainable investing throughout the United States. Joe co-founded the Thirty Percent Coalition and is former co-chair of the leadership group for the Women’s Empowerment Principles, a joint program of the United Nations Global Compact and UN Women. Before entering the investment management industry, Joe worked in private law practice for 16 years.

Joe holds a Juris Doctor from the University of Virginia School of Law and a Bachelor of Arts in philosophy from the College of the Holy Cross.

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