The need for the financial sector to commit to equitable leadership – and to address the ‘S’ in ESG – was a dominant topic across all three days of Ethical Finance 2021.

The financial service industry has made commendable steps towards fostering more holistic progress-led and sustainable policies over the course of the Covid-19 pandemic alone, as illustrated both by the launch of TNFD last week, and the recent news that Monzo Bank will be offering all staff shared leave after any form of pregnancy loss from this year.

However, a new report from LSE and Women in Banking and Finance (WIBF) published this week paints a more troubling picture. Despite applauding examples of a sector-wide shift towards inclusive hiring policies, the report indicated that self-identifying women, and particularly women of colour, are still more likely to face increased levels of pressure to deliver consistently at work, and face more severe repercussions for lapses in performance, than their male counterparts.

The report drew attention to a pervasive trend of “mediocre men surviving the industry in high numbers”, whilst also citing a tendency for managers to fake empathy when managing women in a nod to its ‘value’ and ‘return rate’ among managers and customers alike.

The question of what value we place on individuals, and on the holistic or inclusive business models designed to support their wellbeing at work, has only been accelerated by the Covid-19 pandemic. In Oliver Wyman’s Women in Financial Services 2021 report it was estimated that there is now a $700 billion revenue opportunity from better serving women as customers, including supplying products designed around demand from women, and recognising women entrepreneurs as potential loanees or investors. A growing momentum on the part of shareholders to see an implementation of  hybrid work patterns was also flagged by the report, and later seemingly corroborated by the news that Deloitte are now offering employees the possibility to work from home for life.

Over the course of Ethical Finance 2021, our panel discussions offered glimpses of what the seemingly unquantifiable ‘S’ of ESG governance might look like on an organisational level, and how organisations can lead with this ‘social’ purpose in mind. Mandatory disclosures for companies, public commitments to deliver policy and leadership change within organisations, and a shift to hybrid office culture, were all options recommended by panellists and audience members alike.

Yet, in the same week as our Ethical Finance 2021 discussions, Charlotte Wood APFS, Financial Planning Director at Rosewood penned an unflinching (and somewhat less optimistic) account of navigating a return to work in financial services after her first pregnancy. Reactions to her piece ranged from declarations of solidarity to Wood being repeatedly asked to justify why women should be spared from the ‘consequences’ of having children in their professional lives. Maternity leave was labelled an irresponsible act by several commentators, with Wood’s desire to return to a more flexible, supportive work culture after the birth of her child branded an example of ‘cakeism’– having your cake and eating it – on several occasions.

So how do we bridge the gap between the lofty goals of integrating the ‘S in ESG’ into financial decision-making, with the lived experiences of those who actually work in finance? How do we emphasise the need for social equality while maintaining the admirable progress finance has made on the environment? Ethical Finance 2021 and our recent Ethical Finance Round Table on Leadership have provided important entry points into this unfolding conversation. It is clear, however, that the financial services industry must do more to deliver on ESG and empower the companies they work with to do the same. The first part of this process must be one of accountability: a recognition of the unique experience faced by historically marginalised groups and the impact these experiences have on the ability to feel safe and secure at work- a step that feels particularly prescient as Pride Month draws to a close. But there also needs be a clearer acknowledgement that finance cannot be considered ethical based on environmental sustainability alone: financial institutions, and the companies they lend to and invest in, must work harder to foster equitable work environments.

When the right to bodily autonomy – to planning when and how one has a family – is dismissed as fatalistic career-sacrifice, we cannot be truly sustainable. Whilst a sector culture that allows contemptuous comments of ‘cakeism’ to flourish is still rife, finance cannot truly be ‘ethical’.

Without steps to foster genuine equality, including flexible work and equal parental leave for any men or women who need to use it, the ‘S’ in ESGs will only ever filter through in frustrating fragments: crumbs of a cake that was never intended to be sliced fairly. If the financial services industry wants to deliver on ESG commitments there must be a genuine appetite for equality at both an individual and organisational level, as well as a sharply renewed focus on the social dimension of our commitments to sustainability.