Financial Services sector not walking the talk on Gender Pay Gap

Insig AI, a leading AI and machine learning company serving the asset management industry, have developed a database of machine-readable corporate ESG documents. 

Using a combination of technology and manual data validation, they analysed the relationship between pay gap disclosure levels based on keywords and phrases (‘Talk’) and the reported mean hourly gender pay gap % (‘Walk’) for FTSE 100 companies between 2017 and 2021/22 to examine trends (see Appendix E for methodology). 

They found that 14 of the 20 FTSE 100 Financial Services companies that disclosed in 2021/22 have higher than average gender pay gaps (‘Walk’) compared to the FTSE 100.Of these 14 with high pay gaps, the level of disclosure on the issues (‘Talk’) is split half and half when compared to the FTSE100 average (Appendix A). 


This indicates that overall, the sector is talking a lot about the issue, but still struggling to reduce its pay gap in line with other large businesses in the UK (Appendix D).  Companies vary widely when it comes to their relationship between ‘Walk’ vs ‘Talk’ (Appendix C), with some in danger of being called out for ‘social washing’ or on the other hand, lack of engagement.

Since 2017, companies of a certain size in the UK have been required to report their gender pay gap metrics.  The intention is that transparency will drive accountability and action among businesses to address the issue and reduce inequality.

In the 5 years since, Insig AI’s data shows that while ‘Talk’ among the Financial Services sector has more than doubled from an average of 106 mentions to 232, the actual pay gap has reduced from 29.5% to 24.7%, still above the 19% FTSE100 average.


The gender pay gap metric is used by investors and ESG ratings agencies as one of the indicators of how a company manages its workforce risk and opportunity as part of ESG assessment.  Research repeatedly shows that an equitable and diverse workforce is ‘good for business’. 

The two companies that did not disclose their numbers either to Gov.UK or through their own reporting are opting out based on number of UK sub-entity employees falling below the regulatory threshold of 250. 

The research shows that the Financial Services sector has one of the largest ranges between individual companies’ gender pay gaps (‘Walk’) of all sectors, along with the Consumer Discretionary and Consumer Staples sectors.  The data also reveals a high dispersion on levels of Talk, second only to Consumer Staples (Appendix B).  This suggests this peer group of companies are very taking different approaches to the issue, which may impact their reputation through an ESG lens.


Commenting on the analysis, Diana Rose, Head of ESG Research, Insig AI said:

“We know that different sectors have unique profiles when it comes to gender and diversity, bringing legacies and cultures that play out in metrics such as the gender pay gap.  But, this is 2022, and I think it’s fair to expect our largest UK companies to be throwing everything they can at the issue.

“We know this isn’t simple, and absolutely not about quick fixes, but it has been 5 years since regulation made it crystal clear to corporates that their stakeholders care about the gender pay gap, and want to see considered, committed, courageous action.


“The FTSE 100 data appears to be moving in the right direction, but it seems the finance industry still has a long way to go.  There’s wide variety in how companies are tackling the issue.  When there is all the ‘Talk’ and the needle still isn’t moving on the ‘Walk’, then businesses must be called out as this can be evidence of ‘social washing’.  At the same time, some firms are lagging not only on bringing the ‘Walk’ % metric down, but also when it comes to ‘Talk’, which is just as concerning.  

“Suffragette Emily Davison famously said, ‘deeds, not words’. But I believe that words still matter here, as they wrap around the deed with the ‘why’, the ‘what’ and ‘how’.

The Government wants the metrics, but also encourages companies to disclose their strategies and action plans to address the pay gap, wherever it is.  Transparency through disclosure is essential to give context, clarity and accountability around the number, which can never tell the full story by itself. 


“From an investor’s perspective, if a finance company still isn’t engaging on gender diversity in 2022, then questions have to be raised about how well it is managing other workforce issues that will limit its talent pool, skills retention, diversity of thought, reputation and resilience [1].  Gender is fundamental, but just the start; other diversity factors such as ethnicity, age, disability, and education that are not only fundamental to an equitable society, but important for building a brilliant and future-fit workforce.”


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