ESG – the gender pay gap

: an analysis of the magnitude of the gender pay gap and the potential impact of closing it

Abstract

As part of the Social component of ESG, the gender pay gap remains unresolved and is still under the European Commission’s radar despite equal pay being a part of the European Treaties (article 157TFEU) since 1957. According to 2019 EU data, the gender pay gap stands at 14.1%. The European Commission commits to addressing this issue via the Pay Transparency Directive. The gender pay gap is the average difference between women’s and men’s salaries in gross hourly earnings and is driven by several factors associated with the labour market behaviour (sectoral segregation, part-time work), but also the uneven split of paid and unpaid work, career choices influenced by family care, the fewer and lower-paid female managers and even gender discrimination. A strong joint effort by Governments, Companies, and Social partners is suggested to close the gender pay gap, namely by adopting best practices and enforcing a minimum wage, promoting pay transparency and roles diversification, and investing in social protection and parental leave (Governments); ensuring equal pay, overcoming bias, implementing genderneutral and family-friendly policies, committing to gender balance, betting on transparency, providing adequate training and reducing the impact of parental leave on the parents’ career (Companies); and addressing sector differences and collective bargaining (Governments and social partners). The benefits of closing the gender pay gap comprise reducing poverty, empowering women, and also improving business performance and consequently strengthening the global economy while increasing diversity in the workplace and therefore contributing to a more inclusive economy.

Date of Award	19 Dec 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Alves (Supervisor)