As a woman and executive, I am proud to share our #ChangePays in energy report, whose original research finds the energy sector worldwide has indeed made progress in the area of gender diversity. Women’s participation in boards and senior executive roles in the energy industry is accelerating.
Why is this important? At S&P Global, through our #ChangePays campaign, we are discovering the many ways diversity “pays.” So far, our research has explored the benefits of increased female participation for the capital markets specifically, and the world economy in general. I hope this report will provide you with the data, analytics and insight needed to set intentions, take action and to make change pay.
The Changing Face of Energy
Growth in women’s representation in energy leadership positions has increased in the past 10 years, but there’s still a long way to go.
Women now occupy less than one-fifth of senior leadership spots at energy companies around the world, but trends this decade show growth for women — on boards of directors, in career paths leading to the executive suite, and at the C-suite level.
That’s according to an S&P Global Platts Analytics and S&P Global Market Intelligence analysis of personnel at companies around the world that are constituents of the S&P Global BMI Energy (Sector) Index and S&P Global BMI Utilities (Sector) Index.
- Gains were most visible on boards, where efforts to diversify are more established and have an added push from investors and regulation.
- Women's representation in CEO, COO, and CFO positions has been low. If the current rate of growth does not increase, it could take until the 2090s for energy C-suites to reach gender parity.
- One of the common explanations for why there aren't more women in the C-suite is that there aren't enough women a step below to promote.
- Despite embracing the goal of increasing diversity in senior leadership ranks, women leaders frequently cited a struggle to attract and build a pipeline of talent, from the entry level on, particularly in the energy sector where there is a high demand for people in technical positions and engineers.
Industry Execs Confident About Diversity, Inclusion
Twelve interviews with women leaders blazing a trail through the industry.
More than three-fifths of C-suite executives in the commodities industry are confident their firms have the capacity to address diversity and inclusion issues, according to the findings of a recent survey commissioned by S&P Global Platts. Female executives said the results were an encouraging reflection of the increasing importance of gender diversity and inclusion, but noted there was a difference between having the capacity for change and actually reaching gender parity.
- The global survey of 400 top-level executives at companies in the commodities sector asked “to what extent do you agree or disagree that your company has the capacity to address issues related to diversity and inclusion?”
- In total, 62% of respondents agreed that their firms did have the capacity – with 50% saying they agreed, and a further 12% saying they strongly agreed. Just 8% of executives said their firms did not have the capacity to address diversity and inclusion.
- The survey involved 100 C-suite executives from the energy/power sector and 50 each drawn from oil and gas, coal, petrochemicals, agriculture and metals. The minimum revenue of most companies was $320 million, with a lower threshold of $130 million applying to agriculture.
Shareholders, Regulators Increase Impetus to Change
While external pressures are a strong force driving companies to address their diversity problems, many female executives say the shift toward more gender-diverse leadership teams is primarily motivated from within.
Institutional investors, activist shareholders, and even potential employees and customers are pushing energy companies to lift their female leadership numbers. Nonetheless, female executives interviewed by S&P Global Platts said the internal drivers at their companies were stronger.
- Governments and regulators are increasingly watchful of companies that are lagging in female representation on corporate boards.
- Investors are also playing a role by standing up to big corporations for sustainability, especially in the context of climate change. For companies that already have women on their boards, the threat of being punished by investors is less of a worry.
- Diverse teams make better decisions. As many CEOs at publicly-traded companies strive to diversify because they think it’s the right thing to do, they need to be mindful and purposeful about the best way to include unqiue people and perspectives.
- Another source of momentum: some trade groups have urged CEOs of their member companies to sign pledges to advance diversity and inclusion.
Renewables Sector Acknowledges Uphill Climb
The renewables sector might edge past the oil and gas sector by some measures of gender parity, but that has not stopped it from taking a hard look the mirror.
The Solar Energy Industries Association and the Solar Foundation, a trade group and non-profit geared toward accelerating solar adoption, respectively, this year released a self-assessment based on two U.S. surveys of employers and employees. The overall verdict: women and African Americans were underrepresented, and there was a major gender gap in wages and opportunities to move up the career ladder.
- The report identified several competitive advantages of expanding recruitment to more diverse candidates. To fully reach its potential, the renewables sector needs to tap a wide pool of talent as it expands.
- More than 80 solar company CEOs have signed an action pledge personally committing to have programs in place that encourage diverse recruitment processes. The SEIA has signed MOUs with a number of organizations, including historically black colleges and universities in the U.S., to provide career opportunities.
- A large percentage of employees in the renewables sector are often in the field, as line workers or technicians at wind or solar facilities, in roles that still tend to be male-dominated, said one female CEO who sees stiff competition to draw and retain women into these career areas.