Managers of Nordea’s Global Gender Diversity Strategy find value in companies prioritizing gender equality

Managers of Nordea’s Global Gender Diversity Strategy have chosen L’Oréal as one of their holdings. Of the UN’s 17 Sustainable Development Goals (SDGs), the company is actively working on 14 of them. One is Goal number 5: Gender Equality. This issue has been addressed in L’Oréal’s values for decades, long before the introduction of the SDGs.

Recognizing gender equality as a fundamental human right and a necessary foundation for peace, prosperity and sustainability, many public and private actors are taking steps to close the gender gap. This initiative has gained significant traction because in addition to being a worthy social cause, it has genuine economic merit. “Ensuring that more women are working and leading in the workplace is simply good business. For companies it should make sense to take advantage of the largest talent pool especially as demographic headwinds emerge,” says Julie Bech, co-Manager of Nordea’s Global Gender Diversity Strategy.

For years, L’Oréal has been strongly committed to ethics and equality. For example, there is a system in place throughout the organization that gives all mothers at least 14 weeks of paid leave – even if local maternity leave is shorter and unpaid. In addition, the company aims to provide all fathers or parents with 10 days of paid vacation, no matter where in the world they work.

In the Nordics, L’Oréal’s practice of increased pay during maternity leave is not unusual, but in other parts of the world it represents a significant improvement for women.

Equal pay is also important to the company, and senior management wants to increase equality in areas where it is not in order. The aim is to have an equal number of men and women in the workforce and to include people from different social, cultural and ethnic backgrounds.

“It is important for our organization to reflect the reality in which users of our products live,” says Mai-Britt Rasmussen, Marketing Director, Consumer Products, L’Oréal Denmark. “This requires a strong commitment to equality and diversity. We set individual concrete goals and strive to achieve them regardless of local circumstances.

“However, we are a commercial company competing with others for profit, so we also pay great attention to having the best talent. Therefore, it makes no sense to allow gender to dictate hiring restrictions, but rather to ensure that all professionals have the opportunity to use their skills.”

L’Oréal has approximately 86,000 employees in 150 countries. The company’s in-house Share & Care program ensures common ethical values throughout the organization. At the local level, the company offers health care, day care and assistance to sick or elderly workers in areas where public services are inadequate. L’Oréal also emphasizes ethical values when working with external partners.

“We are a global player, and we are also active in markets and societies that do not necessarily share our values and our vision of equality,” says Rasmussen.

This is the case, for example, in Southern Morocco, where L’Oréal procures vegetable argan oil for use in many of its skin and hair care products. Oil is squeezed from the fruit of argan trees growing in the Moroccan desert. Until the turn of the millennium, it was mainly used by locals. Today it is one of the most popular ingredients in beauty care products. As L’Oréal needs more and more oil, the company has been involved in setting up small local Fair Trade cooperatives. They enable local women to support their families independently of their male family members, while contributing to economic growth in the area..

L’Oréal’s collaboration with South Moroccan women helps them manage their income, invest in the future and send their children to school. (photo: L’Oréal)

Lofty goals are easy to set, but delivering results is a matter of commitment. How can the objective of equal numbers of men and women be achieved in practice, without quotas being used to recruit workers?
Mumina Hassan is L’Oréal’s Head of Human Resources in Copenhagen. In her view, the importance of equality and diversity needs to be made clear. Because top management has integrated gender equality into its strategy, results are constantly being measured within the organization.

“At the corporate level, human capital is something a company can really profit on, and something that is very hard for competitors to copy,” says Julie Bech. “There is great demand for the best talent, so if a company succeeds in creating equal opportunities for everyone, it will have a wider pool to choose from. This gives the company an edge compared to competitors who will not have the same growth potential. Further, the company will be more capable of maintaining and facilitating the development of its best talent if it takes an objective approach to advancing employees. Likewise, when a company hires externally, the pool of talented candidates is simply larger if it includes all available candidates. There are multiple studies that show gender diversity is good for a company’s bottom line. This is, amongst other things, due to the widening of the talent pool.”.

Today, ethical values enhance L’Oréal’s recruitment potential. Rasmussen, who has been with L’Oréal for over 20 years, emphasizes the importance of senior management setting value goals. “When things can be measured, they can lead to action and launch projects to ensure success,” she says. “Today, there are far more women in senior management and the social background of employees is much more diverse. This means that we no longer value similarity because we can learn more from each other as diversity increases. I see it in my own teams as well, when there are many different perspectives and views. We reflect much better the reality in which the users of our products live. I think it’s good for the whole organization”

She recently attended a conference in Morocco where L’Oréal’s country manager is a woman. “The organization sends such a conscious message, because in this country’s culture, a woman is not the self-evident first choice. Situations can be more difficult because the leader is a woman and not a man. However, our message is that the head of the Moroccan office is qualified and competent.”

Out of a total of 17 sustainability goals, L’Oréal is actively working on 14 goals. One of them is Goal number 5: gender equality. These issues have been taken into account in the company’s values for decades, well before the introduction of the Sustainable Development Goals.

“We have clearly noticed that awareness of these issues is increasing. People are often surprised to hear how strongly L’Oréal’s values are reflected in our organization and how far we have taken responsibility, ethics, equality and sustainable development,” says Rasmussen. “Many may think that the beauty industry is all about strong brands and beautiful products. However, senior management is strongly committed to our ethical values and is therefore a strategic priority that is reflected throughout the organization.”

L’Oréal achieved the highest level of growth in more than a decade in Q3 2019, continuing to outperform the beauty market. In addition, the company has been named one of the most ethical companies in the world over 10 times and remains at the forefront of various equality studies.

“First and foremost, we want to create value for our customers,” says Julie Bech. “Nordea’s Global Gender Diversity Strategy offers clients the possibility of good returns with a twist where they can actually impact society by reaching sustainability goals related to diversity. Sustainable investments will play a big role in the future. The companies willing and able to put in the extra resources to make sure they are diverse will benefit from those actions going forward.”