India markets closed
  • BSE SENSEX

    49,591.32
    -154.89 (-0.31%)
     
  • Nifty 50

    14,834.85
    -38.95 (-0.26%)
     
  • USD/INR

    74.7190
    +0.1580 (+0.21%)
     
  • Dow

    33,800.60
    +297.03 (+0.89%)
     
  • Nasdaq

    13,900.19
    +70.88 (+0.51%)
     
  • BTC-INR

    4,418,247.50
    +46,325.50 (+1.06%)
     
  • CMC Crypto 200

    1,235.89
    +8.34 (+0.68%)
     
  • Hang Seng

    28,698.80
    -309.27 (-1.07%)
     
  • Nikkei

    29,768.06
    +59.08 (+0.20%)
     
  • EUR/INR

    88.9028
    +0.0430 (+0.05%)
     
  • GBP/INR

    102.3868
    -0.0108 (-0.01%)
     
  • AED/INR

    20.2980
    +0.0430 (+0.21%)
     
  • INR/JPY

    1.4647
    +0.0019 (+0.13%)
     
  • SGD/INR

    55.7130
    +0.0690 (+0.12%)
     

Full gender equality could increase world GDP up to $28 trillion by 2025: BofA

Melody Hahm
·West Coast Correspondent
·3-min read

For the first time ever, BofA has published a comprehensive report analyzing diversity and inequality at major corporations, looking at factors such as race, ethnicity, gender, sexuality, immigration, and disability. The authors note that while diversity has become part of the corporate vernacular, the U.S. has a long way to go when it comes to true inclusion and the amplification of diverse voices.

There is, however, a silver lining. The writers note that if companies embrace true diversity and inclusion, "society can build back better, fairer and richer post-COVID." The U.S is only getting more diverse in makeup. If the workforce reflects that diversity, the report found, the economy could benefit.

Lily Williams of Denver, Colorado dressed as Rosie the Riveter, holds up a sign as demonstrators march past her during during the Women's March in Denver, Colorado on January 19, 2019. - Thousands of women gathered across the United States for their annual message opposing Donald Trump and supporting women's rights. (Photo by Jason Connolly / AFP)        (Photo credit should read JASON CONNOLLY/AFP via Getty Images)
Lily Williams of Denver, Colorado dressed as Rosie the Riveter, holds up a sign as demonstrators march past her during during the Women's March in Denver, Colorado on January 19, 2019. - (Photo by Jason Connolly / AFP) (Photo credit should read JASON CONNOLLY/AFP via Getty Images)

"Today in the U.S., there are already more kids from ethnic minority backgrounds than white peers, more Spanish speakers than in Spain, while globally women are accumulating financial assets 1.5x faster than men. Full gender equality globally would increase world GDP by up to $28 trillion by 2025," the BofA team writes.

Corporate America is having an existential reckoning, as employees and stakeholders demand equality for historically underrepresented voices, ranging from women to LGBTQ+ employees and ethnic minorities.

While the idea of ESG investing, or putting money toward environmental, social and corporate governance initiatives, and supporting companies that value them, has been around since 2004, it's become a key part of conversation among money managers and investment professionals as analysis finds doing good does indeed contribute to the bottom line.

The COVID-19 pandemic has been an additional setback to closing the economic gender gap. At today's rate, it will take 257 years until men and women get paid the same rate for the same work.
The COVID-19 pandemic has been an additional setback to closing the economic gender gap. At today's rate, it will take 257 years until men and women get paid the same rate for the same work.

"Closing gender and race gaps in education and employment would have generated $2.6 trillion more in economic output in 2019 and the cumulative gains from 1990 would have been $70 trillion in 2019 dollars, all else equal. Furthermore, closing the racial earnings gap resulting from disparities in health, education, incarceration and employment opportunities would boost trend growth by 0.5% per year through 2050," according to the report.

While the gender gap had been worsening even before the pandemic, COVID-19 has been an additional setback. According to the report, 96 million people will slide into extreme poverty this year, 47 million of whom will be women. Jobs held by women were 19% more at risk and women took up an even greater share of childcare and unpaid labor as many had to juggle working from home. At today's rate, it will take 257 years to close the gender economic gap, a dramatic increase from 2016's projection of 170 years.

If executives needed further reason to invest in diversity and inclusion, it just makes plain business sense. According to the BofA report, "S&P 500 companies with above-median gender diversity on their boards see 15% higher return on equity. And overall more diverse companies see lower earnings risk one year out compared with less diverse peers."

Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm and on LinkedIn.

Read more:

Here's how brands are responding to hate crimes against Asian Americans

Airbnb CEO Brian Chesky: 'We’ve seen a paradigm shift in how people search for travel'

Triller CEO Mike Lu says the world chose the app as a 'successor' to TikTok

Bumble CEO: 'If you want to behave poorly, you cannot do it here'