The Biden Administration recently released a blueprint for how the U.S. could get nearly half of its electricity from the sun by 2050 called, “The Solar Futures Study.” But reaching that 50% will require an expansive, multi-sector investment of money and resources toward the clean electricity source that meets only about 4% of the nation’s power demand now.

Host Bill Loveless dug into the hows of deploying solar widely and effectively with Mary Powell, the recently-appointed CEO of Sunrun, a leading residential solar company in the U.S. 

Mary previously headed up the Vermont-based electric utility, Green Mountain Power. 

While there, Mary was known for being a disruptor in the utility space in her embrace of clean energy reforms. 

Bill and Mary spoke about the tricky nature of the residential solar market, how solar is figuring into congressional legislation and how electric utilities can work with the clean energy transition instead of fighting it.

This episode originally aired on October 20th, 2020.

From California wildfires and Gulf Coast hurricanes to flooding in China and Pakistan, the impacts of climate change have grown increasingly evident. And whether it is agricultural workers, low-income and minority communities, or the world’s poorest in the Global South, the severe inequities in who bears the burden of climate change as well as in air and water pollution is also receiving growing recognition. 

In this episode of Columbia Energy Exchange, host Jason Bordoff is joined by one of the leading reporters today writing about the links between a warming planet and such issues as race, conflict, natural disasters, and big tech: Somini Sengupta. 

Somini is the international climate reporter for The New York Times. A George Polk Award-winning foreign correspondent, she previously worked in other capacities at The New York Times as its United Nations correspondent, West Africa Bureau Chief, and South Asia Bureau Chief.

She spoke about the critical role journalists play in telling the stories that help illuminate how climate change affects families and workers around the world. 

The Biden Administration has promised that 40% of its investments in clean energy will go into disadvantaged communities that experience the worst impacts of the changing climate. But as they work to make good on these promises, there are questions about how Biden’s team will execute.

In this episode, host Jason Bordoff speaks with Heather McTeer Toney about what true climate justice should look like. She’s a former Mississippi Mayor, Obama EPA Regional Administrator and now a Climate Justice Liaison for the Environmental Defense Fund and Senior Advisor to Moms Clean Air Force.

They spoke about what it will take to elevate black and brown voices in climate policy. The conversation also touched on the massive infrastructure bill making its way through Congress, which will have a material impact on how energy systems, industry, roads, and transit are built in frontline communities.

As the world pushes forward to find ways to reduce carbon emissions and transition to net-zero, hundreds of millions of people still lack access to reliable energy sources like electricity and the basics in life it affords. To bolster its work around this and help ensure the energy transition is just, the Center on Global Energy Policy is pleased to announce Damilola Ogunbiyi, CEO of Sustainable Energy for All, has joined as a member of the board. 

“I am delighted to join the board of Columbia’s Center on Global Energy Policy,” said Ms. Ogunbiyi. “The Center’s data-driven approach and objective analysis to support policy makers is key to ensuring equitable solutions within the energy sector. I am particularly passionate about including voices from different regions to ensure a just transition that considers the realities of both developing and developed economies.”  

Ms. Ogunbiyi also serves as Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy. She brings a wealth of experience and perspective from many parts of the world including from her home country Nigeria. 

“I can’t think of a better person to help guide CGEP, and the entire energy industry for that matter, through what an equitable future must look like if we’re to achieve net-zero,” said Jason Bordoff, Founding Director of CGEP. “It’s not talked about enough; we need to ensure no one is left behind as we build out a global carbon-free economy. Damilola will help get us there.”

SEforALL is an international organization that was founded in 2011 by the UN Secretary-General Ban Ki-moon, who recognized that energy is the critical link that connects economic growth, social equity, and environmental sustainability.

“The mandate of delivering Sustainable Development Goal 7 is to ensure access to affordable, reliable, sustainable and modern energy for all,” said Ms. Ogunbiyi. “With a UN mandate to deliver SDG7, SEforALL has become a trusted global energy leader. As millions more people fall back into energy poverty under COVID-19, SEforALL’s role has never been more crucial. SEforALL advocates for an energy transition that is just and inclusive and that prioritizes energy access for developing nations enabling them to take differentiated paths towards the same net-zero goals by 2050.”

Before joining SEforALL, Ms. Ogunbiyi was the first woman Managing Director of the Nigerian Rural Electrification Agency. She was also responsible for the Energizing Education Programme, which will provide uninterrupted electricity to 37 federal universities and seven teaching hospitals through off-grid captive power.

“The global energy transition is upon us and its success will depend on making sure we have the right policies in place and sufficient resources invested in developing economies,” said Matt Harris, Chairman of CGEP’s Advisory Board. “Damilola’s experience and leadership will be instrumental in achieving this. We are thrilled to have Damilola join the board.”

Ms. Ogunbiyi entered public service as the Senior Special Assistant to the Lagos State Governor on public-private partnerships. She also worked as a Senior Special Assistant to the President on Power and Head of the Advisory Power Team in the Office of the Vice President of Nigeria.

Before joining the Federal Government of Nigeria, Ms. Ogunbiyi was the first woman to be appointed as the General Manager of the Lagos State Electricity Board. Under her leadership, five independent power projects were completed to deliver over 55 megawatts of power to Lagos State hospitals, schools, streetlights and the Government secretariat. Ms. Ogunbiyi has also worked for the United Kingdom Department for International Development (DfID) on public-private partnerships.

Fossil fuel companies are under pressure from shareholders, citizens and the courts to shift their business models to reduce emissions or face huge financial consequences. There are now more than 1,500 large corporations with net-zero emission pledges, including one-quarter of the S&P 500.

In today’s episode, host Bill Loveless speaks with Mindy Lubber — President and CEO of CERES, a sustainability nonprofit that pushes private companies to integrate the risks associated with climate change into their business strategies. 

They spoke about the changes happening in the market and inside boardrooms, and whether any of it is happening fast enough.

NEW YORK — The Center on Global Energy Policy at Columbia University SIPA announced today that Dr. James Glynn, Dr. Luisa Palacios, and Dr. Harry Verhoeven have joined the Center as Senior Research Scholars. At CGEP, they will conduct research, collaborate with the strong community of scholars at the Center as well as across the University, including the newly formed Climate School, and engage with public and private sector leaders, journalists, students and other key stakeholders.

Dr. Glynn has over 15 years of experience within energy systems analysis and energy technology research, development and deployment, collaborating with governments, technologists and energy analysts in the United States, Europe, and Asia. He is an expert developer and user of the International Energy Agency’s Energy Technology Systems Analysis Programmes’ (IEA-ETSAP) TIMES source code, developing global and national energy systems models.These model applications have provided insights into Irish, European and International energy policy in collaboration with a broad range of stakeholders. He has affiliations to the MaREI Center in University College Cork, Imperial College London, and is an executive committee member of the IEA-ETSAP. Dr. Glynn received a master’s degree in Energy Systems and the Environment from the University of Strathclyde, a master’s degree in Economic & Environmental Modelling from National University of Ireland Galway, and a Ph.D. In Energy Engineering from University College Cork. His research will focus on developing and applying integrated energy systems models to explore the interactions between the climate, economy, and society in order to find resilient pathways to future sustainable development goals.

Dr. Palacios comes to the center after a multidisciplinary career in the intersection of energy, finance and policy. Most recently, she completed a two-year period in the Board of Directors of Houston-based Citgo Petroleum Corporation, the 5th-largest independent U.S. refiner during most of which she served as Chairwoman. Palacios led Citgo during a critical period in the company’s history, as it faced significant geopolitical challenges. As Citgo’s first-ever chairwoman, Palacios shaped efforts to strengthen corporate governance, ethics, and social responsibility, including the publication of the company’s first-ever ESG report. She received a master’s degree in international affairs from Columbia University’s School of International and Public Affairs and a Ph.D. in international affairs from The John Hopkins University School of Advanced International Studies. Her research will focus on Latin America’s energy sector in the context of the energy transition.

Dr. Verhoeven is a well-known scholar of International Relations who has previously taught and/or been affiliated with the University of Oxford, Georgetown University, the School of Oriental and African Studies and the University of Cambridge. He serves as a Senior Advisor to the European Institute of Peace and has collaborated extensively with key policy actors, including the World Bank, the European Union, various agencies of the United Nations, governments in Africa, Europe, the Middle East and North America and non-governmental organizations. For more than a decade, he has served as an expert in legal cases pertaining to development-induced displacement and human rights violations in various African states. He also founded the Oxford University China-Africa Network in 2009 and remains its Convenor. Dr. Verhoeven holds a master’s degree from the London School of Economics and Political Science and a DPhil (Ph.D.) from the University of Oxford. His research at SIPA and the Center will continue to focus on climate change, international relations and the linkages between water, energy and food security, with a particular focus on Africa.

“We’re so thrilled that James, Harry, and Luisa have joined our extraordinary team of scholars at the Center,” said Jason Bordoff, Co-Founding Dean of Columbia’s Climate School, Professor of Professional Practice in International and Public Affairs, and Founding Director of CGEP. “With this new crop of scholars, CGEP is expanding its energy modeling capacity, exploring new intersections between international relations and energy security, and further examining Latin America’s energy markets and geopolitical risks. All three of their research areas are essential to understanding an energy system in transition and to moving the needle forward to prevent the worst impacts of climate change on people and the planet. We look forward to their engagement with the scholarship at the Center and at Columbia University more broadly.”

“Since its founding, the Center on Global Energy Policy has strived to bridge the gap between academic research and policy. The appointments of Dr. James Glynn, Dr. Luisa Palacios, and Dr. Harry Verhoeven will further advance this mission,”  said Dr. Geoffrey M. Heal, Donald C. Waite III Professor of Social Enterprise in the Faculty of Business and co-chair of CGEP’s Academic Steering Committee. 

“As CGEP continues to grow its research capacity, we’re excited to bring in new technical capabilities and geographic expertise to our team to help advance smart, actionable, and evidence-based energy and climate solutions. Please join us in welcoming Harry, Luisa, and James to the Center,” said Dr. Melissa C. Lott, Senior Research Scholar and Director of Research.  

About the Center on Global Energy Policy 

The Center on Global Energy Policy at Columbia University SIPA advances smart, actionable and evidence-based energy and climate solutions through research, education and dialogue. Based at one of the world’s top research universities, what sets CGEP apart is our ability to communicate academic research, scholarship and insights in formats and on timescales that are useful to decision makers. We bridge the gap between academic research and policy — complementing and strengthening the world-class research already underway at Columbia University, while providing support, expertise, and policy recommendations to foster stronger, evidence-based policy. Recently, Columbia University President Lee Bollinger announced the creation of a new Climate School — the first in the nation — to tackle the most urgent environmental and public health challenges facing humanity.

WASHINGTON DC, Apr 8 2021 (IPS) – As the world looks to address issues of gender equity, development and climate change, the importance of increasing the participation of women in the energy sector is gaining attention. To date, this topic has generally been framed around the underrepresentation of women in the energy workforce.

But this ignores an important reality: millions of women already participate as producers of energy – specifically of bioenergy for poor households.  To support sustainable development and gender goals, more attention needs to be given to these women energy producers who have remained largely invisible in much of the energy discourse.

Women account for only 22% of the jobs in the oil and gas industry and only 32% in the renewables sector.  When it comes to managerial and other decision-making positions, the share of women is even lower; for example, their representation in energy company boardrooms is less than 5%.

In response, several programs have been launched to increase women’s participation in the energy sector. These programs are succeeding in raising awareness about the need for more women in the sector, building networks to support women practitioners, and giving visibility to the women already working in energy – albeit with a focus on the formal, professionalized segments that constitute the energy industry.

But this focus on addressing underrepresentation in the formal segments of the sector – a very important effort — can generate the misperception that women are in fact not active in producing the world’s energy. Many assume their role is largely limited to consuming energy (e.g., at home, at work, or for leisure), not supplying it.  And therein lies an overlooked reality: millions of women worldwide are producers of biomass, a form of bioenergy.

About 2.5 billion people globally rely for cooking on the traditional use of solid biomass, notably fuelwood, charcoal and dung.  This figure includes 680 million people in India and 800 million throughout Sub-Saharan Africa.

Biomass is also used by the poor for other purposes, such as heating homes in colder regions.  In many lower-income countries, biomass can constitute over 90 percent of the energy that poor households use.  It is provided through small-scale commercial ventures, but much is also generated by households for their own use.

Around the developing world, women play a central role in producing this bioenergy, notably by gathering wood and making charcoal. In fact, this is a segment of the energy sector where women are often overrepresented.

As the World Bank reported last year, “across most of Sub-Saharan Arica and in parts of China, women are the primary fuel wood collectors,” which is also the case in areas of South Asia. This is time-consuming and physically demanding work that can involve “collecting and carrying loads of wood that weigh as much as 25-50 kilogrammes” and can “take up to 20 or more hours per week.”  Unfortunately, we lack hard data about the number of women engaged in this energy production.

Biomass has already been receiving attention in development circles because of the problems associated with its use in traditional cookstoves, such as negative health impacts on notably the women who cook and the burdens of collecting firewood.

To address this issue, the United Nations has adopted as one of its Sustainable Development Goals the replacement of traditional biomass use with clean cooking technologies. This targeting of biomass and its harmful impacts does not, however, negate the role its women producers play in the energy sector (just as the climate and environmental concerns surrounding coal do not erase the role of miners).

Several actions can help to make these women producers more visible in the energy discourse.

First, recognizing the role they play in energy supply can help to shift the notion and perception of dependency: women actively participate in the production, not just the use, of household energy.

Failing to understand women’s contribution to global energy production will continue to perpetuate the myth of women as mainly (dependent) energy users, which can hamper efforts to ensure their full participation in decision-making and leadership roles within all levels of society.

Second, there is a paucity of data regarding these women producers – a situation that reflects the lack of attention they receive and also contributes to their lack of visibility.

How many women work in producing biomass (generally as unpaid labor)? How many women will be affected by changes in biomass production systems?  What will they do in a changed world?  This type of information can help address their needs and to plan for their engagement in the energy transition.  We need more data.

Third, it is important to acknowledge and properly value this work in producing household bioenergy, and to report it in energy workforce statistics. When a company produces electricity for its own use, it is called a “self-producer.”

When a woman produces biomass for use in her home, it all too often goes nameless.  The recognition of this women’s labor would also help in the effort to “achieve gender equality and empower all women and girls,” the UN’s fifth Sustainable Development Goal.

Fourth, in developing programs and initiatives to shift households from traditional biomass use to clean cooking technologies, it is important not only to consider the effect on women as consumers, but also address the impact on women as energy producers to ensure that their needs are being met.

Moreover, because these efforts to shift how households use biomass will also affect greenhouse gas emissions, the topic has entered the climate discourse. As world leaders discuss how to limit climate change at the upcoming summit convened by US President Biden or thereafter at the international COP negotiations, it is important to ensure that the situation of these women producers — their voices, concerns, and aspirations — are adequately taken into account when planning the clean energy transition (just as the concerns of coal miners and others are also considered).

Acknowledging the central role that millions of women play in producing the world’s bioenergy can lead to a greater empowerment of women across the sector.

As efforts to boost the participation of women in energy mature, it will be important to better recognize and analyze the contributions of these women producers, and to design policies that will help improve their standards of living, including as part of the clean energy transition.

NEW YORK – Columbia University’s Center on Global Energy Policy announced today that former Chair of the California Air Resources Board Mary Nichols will join the Center as a Distinguished Visiting Fellow. At CGEP, Nichols will advance smart, actionable and evidence-based energy and climate solutions through research, education and dialogue. She will contribute to energy and climate scholarship at the Center and across the University, engage with the University’s vibrant student community, and participate in public and private events, workshops and lectures organized by the Center.

“Perhaps no one has done more to champion environmental protection in the US over the last half century than Mary Nichols. Mary has a long and distinguished career in public service and environmental policy and has pioneered several landmark climate initiatives, including California’s cap-and-trade program. She’s known for enacting tough, legally sound regulations on pollution control and conservation that have served as models for national and international environmental law,” said Jason Bordoff, Professor of Professional Practice in International and Public Affairs and Founding Director of the Center on Global Energy Policy. “We are thrilled that Mary will be joining the Center as a Distinguished Visiting Fellow to help advance smart, actionable and evidence-based energy and climate solutions through research, education and dialogue.”

Over a career as an environmental lawyer spanning over 45 years, Nichols has played a key role in California and the nation’s progress toward healthy air. She most recently served as the Chair of the California Air Resources Board where she led the Board in crafting California’s internationally recognized climate action plan. 

“Climate change is already upon us, and even as people begin to experience the effects of a warming planet, global emissions are still rising. To avoid the worst impacts of climate change, we need to look for safe and sustainable ways to eliminate carbon from the atmosphere, and we’ll need to go far beyond business as usual,” said Nichols. “I’m proud to join the team at the Center on Global Energy Policy, an established leader taking an interdisciplinary and pragmatic approach to addressing the climate crisis through energy policy. I look forward to being a part of their work.”

CGEP’s Distinguished Fellows Program brings veterans of public and private sector life into the Columbia community. Distinguished Fellows serve as adjunct research scholars, collaborate on articles and op-eds published through CGEP, participate in public events at Columbia University, speak to campus and faculty groups, and may teach a course or supervise a student research team.

ABOUT MARY NICHOLS

Mary Nichols is the former Chair of the California Air Resources Board, where she occupied the attorney seat. She has served on the Board under Governor Edmund G. Brown, Jr. (1975–82 and 2010–18), Governor Arnold Schwarzenegger (2007–2010) and Governor Gavin Newsom (2019–present). She also served as California’s Secretary for Natural Resources (1999–2003), appointed by Gov. Gray Davis. When not working for the State of California, Nichols was a senior staff attorney for the Natural Resources Defense Council; Assistant Administrator for U.S. EPA’s Office of Air and Radiation, in the administration of President William Jefferson Clinton; and headed the Institute of Environment and Sustainability at UCLA. Over a career as an environmental lawyer spanning over 45 years, Nichols has played a key role in California and the nation’s progress toward healthy air. She has also led the Board in crafting California’s internationally recognized climate action plan. Nichols is a graduate of Yale Law School and serves on the faculty at the UCLA School of Law.

ABOUT THE CENTER ON GLOBAL ENERGY POLICY

The Center on Global Energy Policy advances smart, actionable and evidence-based energy and climate solutions through research, education and dialogue. Based at one of the world’s top research universities, what sets CGEP apart is our ability to communicate academic research, scholarship and insights in formats and on timescales that are useful to decision makers. We bridge the gap between academic research and policy — complementing and strengthening the world-class research already underway at Columbia University, while providing support, expertise, and policy recommendations to foster stronger, evidence-based policy. Recently, Columbia University President Lee Bollinger announced the creation of a new Climate School — the first in the nation — to tackle the most urgent environmental and public health challenges facing humanity.

This commentary represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. Contributions to SIPA for the benefit of CGEP are general use gifts, which gives the Center discretion in how it allocates these funds. More information is available at Our Partners. Rare cases of sponsored projects are clearly indicated.

As pressure mounts on energy companies to address environmental, social, and governance (ESG) concerns, now front and center for many large investors, the “social” aspects of ESG are coming to the fore. “Social” considerations gained attention during the 2020 shareholder proxy season, as witnessed by an intensification of focus on human capital and talent management in generating long-term value.[1]

The COVID-19 pandemic has brought worker well-being, safety, and fair compensation across the economy directly into the public eye. Similar to the 2009 financial crisis, the current economic downturn has disproportionately impacted women and people of color. McKinsey’s Women in the Workplace 2020 report calculated that overall, women’s jobs are 1.8 times more vulnerable in this current crisis than men’s jobs.[2] The immediacy of COVID’s disparate impacts has been accentuated by the increased attention to racial justice and gender equality in wider public discourse in the United States and beyond. As downsizing has taken place in energy companies during COVID, workforce diversity and inclusion policies have come under greater investor scrutiny.[3]

Given these trends, energy companies are under pressure to take bolder ESG initiatives to ensure continued access to investment by institutional investors.[4] For example, one new area within the “S” dimension of ESG that is being incorporated into portfolio strategies is searching for opportunities based on workplace gender equality. Coined in the late 2000s as “gender-lens investing,” a new class of impact investors is considering gender issues in financial analysis to better inform investment decision-making.[5]

This commentary discusses the approaches ESG-oriented institutional investors and engaged impact investors are taking to make apparent the gender and broader diversity standards that companies, including energy companies, will need to meet to maintain access to their capital. This commentary also considers the role a diverse workforce and leadership can play in promoting other ESG goals, such as environmental performance. It then takes a step back to examine early investing through venture capital. This is important because many energy companies begin as smaller ventures backed by risk finance. The role of venture capital in energy start-ups means that the onus is not just on the energy companies themselves to consider gender issues in long-term sustainability and profitability but also on early-stage investors of the energy industry to recognize the potential in women-owned and women-run start-ups and the biases holding them back.

Gender Lens and Diversity as an Investment Screen

Several diversity factors have been shown to positively impact investment outcomes. Early studies show that companies commended for diversity have had an initial positive stock price move in the aftermath of such announcements.[6] Also, Quantamental Research, a unit of Standard & Poor’s Global Market Intelligence, found that Russell 3000 companies with female chief financial officers generated $1.8 trillion more in gross profit between 2002 and 2019 than the average for sector competitors, as well as generated more share value appreciation.[7] And the Institutional Shareholder Services Group (ISS) 2020 report The Five Tenets of Diversity: Values Create Value found that firms whose corporate boards have at least two women board members outperform the average Russell 3000 companies’ returns over three, four, and five year periods.[8] A study by Diversity also links diverse collaborations that include women and underrepresented minorities (as opposed to heterogenous teams) with higher overall fund returns for venture capital firms.[9]

In recent years, as racial and gender inequality have stood out in US public discourse, ESG investors have become increasingly concerned that poor performance on diversity will have a negative impact on long-term corporate performance.[10] Shareholders filed proposals for corporate engagement on over 400 environmental, social, and sustainability issues during the 2020 proxy season, including on gender and racial diversity.[11] Last year, 77 percent of Fortune 100 companies voluntarily highlighted human capital initiatives, up from 32 percent in 2017. Now 69 percent of those companies have explicitly assigned diversity, corporate culture, and workforce issues to board or management committee oversight, up from just 28 percent in 2017.[12]

In line with these trends, several US states have passed board diversity standards, with California requiring all publicly traded companies with principal executive offices in the state to have two to three women board members by 2021, depending on the size of the board. Similar bills have been introduced in Illinois, New Jersey, and Massachusetts.[13] Nasdaq, the US electronic stock exchange known for growth-oriented, innovative companies, has also weighed in with proposed new rulemaking that would require companies listed on its exchange to have at least one woman and one person who identifies as an underrepresented minority on their board of directors.[14] Nasdaq is also tightening rules for required disclosure of diversity information. As encouraging as these recent movements are for ESG investors, the United States still lags other developed countries/regions, such as Europe and Canada, when it comes to diversity on corporate boards. For example, while 13.4 percent of Russell 3000 companies still don’t have a single woman on their boards, Norway has been mandating a 40 percent minimum female representation on public corporate boards since 2008.[15]

Research also has demonstrated a link between gender diversity on corporate boards and environmental performance, broadening the relevance of diverse boards to a wider aspect of corporate performance. A 2017 evidence-based study by Central China Normal University, using S&P Compustat data on publicly listed companies on the New York Stock Exchange and corporate databases from MSCI (boards), ISS (board diversity), and KLD (environmental policy), found that “the more likely firms in a given industry are to cause environmental pollution, the more salient will be the beneficial effect of gender diversity on boards on firms’ environmental policy in the industry.”[16]

In some cases, ESG investors are beginning to screen out companies or industries with poor records on gender equality from their equity portfolios, fearing that diversity issues are an indication of a deficit in management oversight as well as a potential disadvantage for firms in competing for workforce talent. This could have direct bearing on energy companies who have lagged other industries in recruiting and retaining women and promoting them to senior ranks. Women’s share of the energy workforce ranges from 23 percent to 32 percent.[17] Women represent less than one-fifth of senior executive positions at energy companies. Minorities are even less represented in energy company leadership.

The investment decision of divesting (selling one’s ownership stake) versus engaging with companies is a critical one. There is no right answer. However, it is worth noting that constructive engagement by institutional investors has brought positive change to energy companies in other areas, such as environmental practices, in recent years.[18] The advocacy group Ceres reported that shareholder engagements spurred company commitments to address specific climate-change-related issues such as greater disclosure, higher greenhouse gas emissions reduction targets, and improved strategic planning related to the energy transition.[19]

Investor Engagement on Transparency of Gender Roles and Pay

Some investors are engaging companies by issuing shareholder initiatives to advance gender parity. Some efforts are focused around disclosure and reporting, with shareholders asking companies to disclose compensation data to reveal whether a gender pay gap exists across the firm. In a famous case in 2019, Citigroup Inc. responded to shareholder engagement initiatives by improving the transparency of its reporting on compensation issues.[20] The bank disclosed that women were receiving 29 percent less in compensation than men on a global median basis corporate-wide, based on underrepresentation in the bank’s top ranks. Women account for 37 percent of senior positions at Citi, compared to 50 percent of the total workforce. When adjusting for job function, level, and geography, women earn 99 percent of men, the bank added. Currently, 27 percent of Fortune 100 companies report a measure of workforce diversity data, including the percentage of women and minorities across the workforce and in certain leadership and management categories.[21] Only 10 percent of firms have announced concrete forward-looking targets for senior level roles, and only a few firms disclose specific pay ratios related to diversity.

A new law in Canada (C-25) enacts an important change for public companies in that country. Stopping short of imposing quotas, which are highly debated across industries, the new law requires companies to report various diversity metrics for both their boards and senior management.[22]

Shareholder Activism on Corporate Culture Accountability in the C-Suite and on Boards

Research shows that firms with highly satisfied employees outperform in terms of shareholder return.[23] Positive culture is promoted when there is a well-articulated alignment between a company’s purpose and its core values and daily operations.

Accountability for corporate culture extends to the C-suite and board of directors, which set an example for the larger entity. The National Association of Corporate Directors 2017 report on corporate culture notes that directors should review board culture on a regular basis and make culture an explicit criterion in the selection and evaluation of the chief executive officer. In particular, it recommends that compensation committees review recognition and reward systems to ensure they are promoting company values, including diversity and pay equality.[24] Increasingly, public company shareholders are considering “say-on-pay” resolutions, which assert shareholders’ rights to vote on the remuneration of corporate leaders. Higher scrutiny and engagement on executive salaries is a building block to consider pay inequity and to monitor and promote improved corporate performance on culture, equity, and inclusion. For the energy industry, where corporate performance on diversity and inclusion culture is lagging and there is scope for improvement in corporate culture, shareholder action on executive pay and social factors could intensify moving forward.

Beyond establishing a link between executive pay and performance related to corporate culture and diversity, shareholders can take, and are taking, a more proactive role in ensuring gender balance in the selection of independent board members. The Council on Institutional Investors, an influential governance group of important asset owners and asset managers, has begun tracking independent directors who receive less than majority support but still remain on boards.[25] This is significant because shareholders vote each year to renew each independent board member serving on the board of directors of public companies. Concerns about diversity and performance are now leading activist investors to use this annual vote to express dissatisfaction with board composition that lacks female representation.[26] Specifically, these activist shareholders vote against the renewal of directors who are members of board nominating committees who are failing to propose a diverse slate of independent board members for the board where they serve. It is the job of nominating committee members to propose new appointments when there is a vacancy for new independent board members. Average opposition to nominating chairs at all-male S&P 1500 boards was about 30 percent in 2019.[27] Proxy advisory firm Glass Lewis & Co. is now recommending against reelecting directors who chair nominating committees at Russell 3000 companies with all-male boards.[28] Two of the largest asset management firms, BlackRock and State Street, have begun to vote against all-male boards with no plans to add women.[29] BlackRock sent out warning letters in 2020 to companies with fewer than two women directors on their boards. And Goldman Sachs announced last year that it will not take companies public and work with them as IPO underwriters if the companies have all-male boards of directors.[30]

The prevalence of all-male boards or boards with few women and underrepresented minorities raises questions about the energy industry’s ability to attract investment dollars from ESG-oriented institutional investors managed by firms like BlackRock and State Street. That’s a problem for an industry that is already reeling from falling stock valuations amid lower prices, flagging cash flows, and high debt. In 2019, women represented just over 12 percent of board seats for energy companies in the Russell 3000 Index, where almost a third of energy companies still had all-male boards.[31] Only 6 percent of energy board seats could be characterized as ethnically diverse.

Women-Owned Companies and Access to Venture Capital

In a 2019 report, the International Energy Agency (IEA) found that more energy investment funding than ever is going to energy venture capital deals. The IEA noted that risk-taking capital like venture capital (VC) is an essential complement to government and corporate spending.[32] The IEA study observed that large energy companies and large technology companies are increasingly buying up or taking an equity stake in energy start-up firms to expand their investment portfolios in clean energy and energy innovation. Because energy infrastructure tends to be expensive and long-lasting, access to risk funding is all the more critical to energy entrepreneurs.[33]

The importance of venture finance in energy innovation raises questions about whether there are disparities in access to VC funding for women-owned start-ups. To the extent that many energy company strategies for the future include acquisition of interesting energy start-up firms, a lack of funding for women-owned and minority-owned energy start-ups can perpetuate the lack of diversity inside existing energy companies. Disparities in women’s access to venture funding also discourages the development of diverse talent pipelines, which are linked in large measure to visibility of opportunity.

In 2020, 2.1 percent of overall US venture capital[34] and 1.8 percent of European VC went to companies whose CEO was a woman, despite a sizable increase in the number of women-owned businesses.[35] Studies have shown that gender bias can be present during the pitch process to VC firms. Research on the TechCrunch competition found that women were asked different questions than their male counterparts, with men more often given the opportunity to discuss upside potential for their ventures, while women were asked questions of a more preventive nature (e.g., how they would avoid potential losses and mitigate risk).[36] Entrepreneurs asked questions about upside received six times more money than those asked about risk mitigation. By contrast, Boston Consulting Group found, in a recent survey of MassChallenge[37]-accelerated businesses, that start-ups founded or cofounded by women generated 10 percent more in cumulative revenue over a five-year period than male-founded firms.[38] Meanwhile, less than half of US startups had at least one woman in an executive position in 2020, according to Silicon Valley Bank’s annual survey.[39]

While venture capital is not the only asset class with significant female underrepresentation, it is receiving increased attention because reform in this sector could directly help fix the “pipeline issue” of a lack of female- or diverse-owned companies, including in the energy industry. Having more women-owned or women-started ventures supported by the VC industry would increase the number of firms that could grow over time to become medium- and large-sized women-owned or women-run companies.

Some VC firms have shifted to a digitally mediated process to reduce gender bias in early stage screening. Also, some newer VC firms are emerging that specifically focus on companies with female founders. One such example is the Vinetta Project, which recently launched an initiative with JPMorgan to help close the gender funding gap.[40]

Since barriers to female founders accessing capital in the venture space are well understood and documented, there have been encouraging signs of mitigating this issue. For example, Caisse de dépôt et placement du Québec (CDPQ), one of the largest Canadian pension funds, launched a new initiative in 2020 called Equity 253, an investment fund aimed at increasing diversity and inclusion in the SME space (small and medium enterprises).[41] Specifically, companies eligible for this program will be required to have 25 percent of their board of directors, management teams, and shareholders comprised of diverse people.[42]

The venture space is not the only part of the investment chain lacking in women leadership. The dearth of women-leading companies further along in their life cycle, such as in the growth equity and private equity businesses, is equally perplexing.

To address the disparities in early finance, some investors are specifically seeking out investment opportunities in women-owned companies or companies known to advance women through their internal governance structures. Several large Wall Street firms have launched gender-lens investing products or initiatives, and experts believe the market could expand to over $30 billion in products by 2025, especially as more women become leaders in family offices (investment firms focused on the portfolios of ultrahigh-net-worth families) or as asset owners.[43]

One way to reduce bias across energy funding ecosystems is to ensure there is sufficient diversity among the officers in pension funds and family offices whose capital is allocated to be deployed by venture capitalists, private equity managers, and large asset management firms. By promoting a diverse composition of investment professionals making investment decisions, it would likely reduce bias and result in allocation of capital to companies, including energy companies, with better long-term prospects—which, as discussed, are companies that have sustainable business models and are led by diverse management teams and boards.

Recommendations

Energy companies seeking broad investor support, including from the ESG community, will need to increase transparency and improve disclosure regarding human capital, including publishing data on workforce diversity and compensation. Companies should also assign board-level oversight responsibilities for promoting an inclusive corporate culture, workforce diversity, and equal pay. Boards should tie executive compensation to diversity performance and should issue explicit statements on the company’s philosophy and aims for corporate culture. Executive leadership should ensure diversity objectives are part of management’s annual performance reviews. Companies should consider using annual employee surveys or other means to study and track improvement of business culture.

Venture capital firms should consider incorporating gender-lens investing strategies when funding start-ups. To combat bias early in the decision-making phase, they can employ a “blind” application process by removing names from proposals and not requiring the founder, male or female, to pitch the product. Instead, VC firms can review proposals solely on the numbers and results, or have a third-party partner deliver the pitch.

Conclusion

2020 was a remarkable year in terms of bringing diversity, inclusion, and equity to the forefront of ESG investor priorities. However, the implementation and measurement of tangible results is key to establishing success.

The energy industry faces unique challenges from the increased scrutiny of ESG factors in investment decision-making. As ESG-oriented investors turn their attention to social factors, many energy companies are not well positioned to make the case that their corporate culture and governance structures reach the level of diversity needed to promote higher returns known to be associated with a well-run, diverse workforce and C-suite. The ability to change this limiting situation rests not only with energy companies but also with venture capital firms, which can remove social bias from financial elements of the energy innovation process. Meanwhile, shareholders are playing an important role in spotlighting the benefits of diversity, and firms that need to access capital markets will increasingly have to focus on cultivating a corporate culture that promotes a diverse executive leadership and workforce.

Acknowledgments

This commentary represents the research and views of the authors. It does not necessarily represent the views of the Center on Global Energy Policy. This work was made possible by support from the Center on Global Energy Policy. More information is available at https://energypolicy.columbia.edu/about/partners.

Notes

[1] Jamie Smith, “Four ESG Highlights from the 2020 Proxy Season,” Ernst & Young, July 28, 2020, https://www.ey.com/en_us/board-matters/four-esg-highlights-from-the-2020-proxy-season.

[2] Sarah Coury, Jess Huang, Ankur Kumar, Sara Prince, Alexis Krivkovich, and Lareina Yee, “Women in the Workplace 2020,” McKinsey & Company, September 30, 2020, https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace.

[3] Maitaine Sardon, “Sustainability Investors Shift Their Focus to Social Issues,” Wall Street Journal, October 19, 2020, https://www.wsj.com/articles/sustainability-investors-shift-their-focus-to-social-issues-11602342000.

[4] April Lord and Henrietta Worthington, “Incorporating ESG into the Oil and Gas Industry,” JD Supra, December 2, 2020, https://www.jdsupra.com/legalnews/incorporating-esg-into-the-oil-and-gas-60433/.

[5] “How Gender Lens Investing Is Gaining Ground,” Knowledge@Wharton, Wharton School, October 2, 2020, https://knowledge.wharton.upenn.edu/article/how-gender-lens-investing-is-gaining-ground/.

[6] Amy McMillan-Capehart, Joshua R. Aaron, and Brandon N. Cline, “Investor Reactions to Diversity Reputation Signals,” Corporate Reputation Reviews 13 (2010): 184–97, https://doi.org/10.1057/crr.2010.20.

[7] Lindsey White, “Study: Female Execs Generated Higher Profit, Stock Price Returns than Male Peers,” S&P Global Market Intelligence, October 16, 2019, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/study-female-execs-generated-higher-profit-stock-price-returns-than-male-peers-54788813.

[8] Sean McPhillips, Anthony Campagna, and Brett Miller, “The Five Tenets of Diversity,” ISS, December 15, 2020, https://www.issgovernance.com/library/the-five-tenets-of-diversity/.

[9] Paul Gompers and Silpa Kovvali, “The Other Diversity Dividend,” Harvard Business Review, July/August 2018, https://hbr.org/2018/07/the-other-diversity-dividend.

[10] Maitane Sardon, “Sustainability Investors Shift Their Focus to Social Issues,” Wall Street Journal, October 10, 2020, https://www.wsj.com/articles/sustainability-investors-shift-their-focus-to-social-issues-11602342000https://www.bsr.org/en/our-insights/blog-view/investors-are-committing-to-action-on-diversity-now-what.

[11] Hazel Bradford, “2020 Proxy Season Includes 400-Plus ESG Resolutions—Report,” Pensions & Investments, March 19, 2020, https://www.pionline.com/governance/2020-proxy-season-includes-400-plus-esg-resolutions-report.

[12] Steve W. Klemash, Rani Doyle, and Jamie C. Smith, “Four ESG Highlights from the 2020 Proxy Season,” Harvard Law School Forum on Corporate Governance (blog), Harvard Law School, August 23, 2020, https://corpgov.law.harvard.edu/2020/08/23/four-esg-highlights-from-the-2020-proxy-season/.

[13] Michael Hatcher and Weldon Latham, “States Are Leading the Charge to Corporate Boards: Diversify!,” Harvard Law School Forum on Corporate Governance (blog), Harvard Law School, May 12, 2020, https://corpgov.law.harvard.edu/2020/05/12/states-are-leading-the-charge-to-corporate-boards-diversify/.

[14] Andrew Ross Sorkin, Jason Karaian, Michael J. de la Merced, Lauren Hirsch, and Ephrat Livni, “Nasdaq Pushes for Diversity in the Boardroom,” New York Times, December 1, 2020, https://www.nytimes.com/2020/12/01/business/dealbook/nasdaq-diversity-boards.html.

[15] Matteo Tonello, Corporate Board Practices in the Russell 3000 and S&P 500, 2020 ed., Conference Board, 2020, https://conferenceboard.esgauge.org/boardpractices.

[16] Ji Li, Fuqiang Zhao, Silu Chen, Wanxing Jiang, Tao Liu, and Shengping Shi, “Gender Diversity on Boards and Firms’ Environmental Policy,” Business Strategy and the Environment 26 (March 2017): 306–17, https://doi.org/10.1002/bse.1918.

[17] National Association of State Energy Officials and Energy Futures Initiative, 2020 U.S. Energy & Employment Report, 2020, https://www.usenergyjobs.org/s/USEER-2020-0615.pdf.

[18] Ceres, The Role of Investors in Supporting Better Corporate ESG Performance: Influence Strategies for Sustainable and Long-Term Value Creation, February 2019, https://www.ceres.org/sites/default/files/reports/2019-04/Investor_Influence_report.pdf.

[19] Ceres, Shareholders Spur Action on Climate Change: Company Commitments From the 2014 & 2015 Proxy Season, October 2015, https://www.ceres.org/sites/default/files/reports/2017-03/Ceres_CoCommitTracker_100615.pdf.

[20] “Citi Says Female Employees Earn 29 Percent Less than Men,” Reuters, January 16, 2019, https://www.reuters.com/article/us-citigroup-pay/citi-says-female-employees-earn-29-percent-less-than-men-idUSKCN1PA28B.

[21] EY Center for Board Matters, Four ESG Highlights from the 2020 Proxy Season, Ernst & Young, July 2020, https://assets.ey.com/content/dam/ey-sites/ey-com/en_us/topics/board-matters/ey-cbm-four-takeaways-from-the-2020-proxy-season.pdf.

[22] “Diversity Disclosure for Boards of Directors and Senior Management Comes into force,” Government of Canada, last updated July 18, 2019, https://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs08317.html.

[23] Alex Edmans, “28 Years of Stock Market Data Shows a Link between Employee Satisfaction and Long-Term Value,” Harvard Business Review, March 24, 2016, https://hbr.org/2016/03/28-years-of-stock-market-data-shows-a-link-between-employee-satisfaction-and-long-term-value.

[24] Report of the NACD Blue Ribbon Commission on Culture as a Corporate Asset, NACD, October 3, 2017, https://www.nacdonline.org/insights/blue_ribbon.cfm?itemnumber=48186.

[25] Council of Institutional Investors, “FAQ: Majority Voting for Directors,” January 4, 2017, https://www.cii.org/files/issues_and_advocacy/board_accountability/majority_voting_directors/CII%20Majority%20Voting%20FAQ%201-4-17.pdf.

[26] EY Center for Board Matters, Four ESG Highlights from the 2020 Proxy Season.

[27] Jamie Smith, “Five Takeaways from the 2019 Proxy Season,” Ernst & Young, July 23, 2019, https://www.ey.com/en_us/board-matters/five-takeaways-from-the-2019-proxy-season.

[28] Glass Lewis, 2020 Proxy Season Review, 2020, https://www.glasslewis.com/wp-content/uploads/2020/09/2020-Proxy-Season-Review-United-States.pdf.

[29] Saijel Kishan, “BlackRock to Push Companies on Racial Diversity in 2021,” Bloomberg, December 10, 2020, https://www.bloomberg.com/news/articles/2020-12-10/blackrock-plans-to-push-companies-on-racial-diversity-in-2021.

[30] Kim Elsesser, “Goldman Sachs Won’t Take Companies Public if They Have All-Male Corporate Boards,” Forbes, January 23, 2020, https://www.forbes.com/sites/kimelsesser/2020/01/23/goldman-sachs-wont-take-companies-public-if-they-have-all-male-corporate-boards/.

[31] Matteo Tonello, “Corporate Board Practices in the Russell 3000 and S&P 500,” Harvard Law School Forum on Corporate Governance (blog), Harvard Law School, October 18, 2020, https://corpgov.law.harvard.edu/2020/10/18/corporate-board-practices-in-the-russell-3000-and-sp-500/.

[32] Simon Bennett, “Non-traditional Energy Companies Lead a Record Year for Corporate Investment in Energy Start-Ups,” IEA, September 27, 2019, https://www.iea.org/commentaries/non-traditional-energy-companies-lead-a-record-year-for-corporate-investment-in-energy-start-ups.

[33] Andrew B. Hargadon and Martin Kenney, “Misguided Policy? Following Venture Capital into Clean Technology,” California Review Management 54, no. 2 (Winter 2012): 118–35, https://doi.org/10.1525/cmr.2012.54.2.118.

[34] “The US VC Female Founders Dashboard,” PitchBook, last updated February 4, 2021, https://pitchbook.com/news/articles/the-vc-female-founders-dashboard.

[35] “The European VC Female Founders Dashboard,” PitchBook, last updated February 5, 2021, https://pitchbook.com/news/articles/the-european-vc-female-founders-dashboard.

[36] Dana Kanze, Laura Huang, Mark A. Conley, and E. Tory Higgins, “Male and Female Entrepreneurs Get Asked Different Questions by VCs—and It Affects How Much Funding They Get,” Harvard Business Review, June 2017, https://hbr.org/2017/06/male-and-female-entrepreneurs-get-asked-different-questions-by-vcs-and-it-affects-how-much-funding-they-get.

[37] Founded in 2010, MassChallenge is a US-based global network of accelerators that offers start-up businesses mentors and other resources. It has backed 1,500 firms, which have raised more than $3 billion in funding.

[38] Katie Abouzahr, Matt Krentz, John Harthorne, and Frances Brooks Taplett, “Why Women-Owned Startups Are a Better Bet,” Boston Consulting Group, June 2018, https://www.bcg.com/publications/2018/why-women-owned-startups-are-better-bet.

[39] Silicon Valley Bank, 2020 Women in US Technology Leadership Report, 2020, https://www.svb.com/globalassets/library/uploadedfiles/content/trends_and_insights/reports/women-in-us-technology-leadership-2020-silicon-valley-bank.pdf.

[40] Geoff Nudelman, “20 Minutes with the Vinetta Project Founder and CEO Vanessa Dawson,” Barron’s, June 1, 2020, https://www.barrons.com/articles/20-minutes-with-the-vinetta-project-founder-ceo-vanessa-dawson-01591034507.

[41] Paula Sambo, “Caisse Launches $250 Million Fund to Boost Diversity in Smaller Businesses,” Financial Post, October 20, 2020, https://financialpost.com/entrepreneur/quebec-pension-launches-fund-to-boost-diversity-in-smaller-firms.

[42] “Equity 25: A Fund for Diversity and Inclusion,” CDPQ, accessed February 12, 2021, https://www.cdpq.com/en/equity25-3.

[43] Beth Braverman, “Answering 5 Questions about Gender-Lens Investing,” Impactivate, May 7, 2019, https://www.theimpactivate.com/answering-5-questions-about-gender-lens-investing/.

NEW YORK — The Center on Global Energy Policy at Columbia University’s School of International and Public Affairs announced today that Dr. Melissa C. Lott has been selected as the Center’s Director of Research. Dr. Lott will serve as a key part of the leadership team, working with the Center’s Founding Director to shape the Center’s research efforts that span the economic, environmental, and geopolitical aspects of the current and future energy system.

“Melissa’s deep knowledge and expertise will contribute greatly to the understanding of critical energy issues and enhance the Center’s research, teaching, engagement, and, ultimately, its impact on solutions for climate change. I am really looking forward to working with Melissa,” said Dr. Geoffrey M. Heal, Donald C. Waite III Professor of Social Enterprise at Columbia Business School and Chair of CGEP’s Academic Steering Committee. 

“We could not be more excited that Melissa will be moving into this new position. Melissa exemplifies CGEP’s mission by combining first-rate scholarship with a proven track record of external engagement, communication and impact,” said Jason Bordoff, Professor of Professional Practice in International and Public Affairs and Founding Director of CGEP.

As CGEP’s Research Director, Dr. Lott will develop research collaborations across Columbia University, its new Climate School, and outside academic organizations, oversee CGEP’s external expert review process for research publications, and coordinate the work of CGEP’s research programs to advance academic research that responds to the challenges of today in real-time.

“We are facing a series of critical challenges around the world as we work to mitigate the worst impacts of climate change and protect human health and the environment. The energy sector lies at the heart of the solutions, and detailed, fact-based analysis to support policy solutions is needed more than ever. It is an honor to take on this new role at the Center on Global Energy Policy, and I look forward to developing new research in conjunction with CGEP’s other scholars and our partners both within Columbia University and throughout the global research community,” said Dr. Lott.

About Dr. Melissa C. Lott

Dr. Lott joined CGEP in October 2019, to lead the Center’s Power Sector and Renewables Research Initiative. Prior to joining CGEP, Dr. Lott served as the Assistant Vice President of the Asia Pacific Energy Research Centre, where she led the development of the flagship APEC Energy Demand and Supply Outlook. Dr. Lott also served as the primary author of the International Energy Agency’s technology roadmap on energy storage. She was previously a Presidential Management Fellow at the U.S. Department of Energy, where she was the Lead of Energy Modeling and Simulation for the CFO’s Program Analysis and Evaluation Office. Dr. Lott holds a Ph.D. from University College London and master’s degrees in both mechanical engineering and public affairs from the University of Texas at Austin. She holds a bachelor’s degree in biological systems engineering from the University of California, Davis. An author of more than 350 articles on energy, Dr. Lott is known for her role as a founding author of Scientific American’s Plugged In energy column.

About the Center on Global Energy Policy

The Center on Global Energy Policy at Columbia University SIPA advances smart, actionable, and evidence-based energy and climate solutions through research, education, and dialogue. Based at one of the world’s top research universities, what sets CGEP apart is our ability to communicate academic research, scholarship, and insights in formats and on timescales that are useful to decision-makers. We bridge the gap between academic research and policy — complementing and strengthening the world-class research already underway at Columbia University, while providing support, expertise, and policy recommendations to foster stronger, evidence-based policy. Recently, Columbia University President Lee Bollinger announced the creation of a new Climate School — the first in the nation — to tackle the most urgent environmental and public health challenges facing humanity. Follow us on Twitter @ColumbiaUEnergy.