PAI Indicator: Unadjusted Gender Pay Gap

The European Commission (EC) established in the SFDR a set of Principal Adverse Impact ('PAI') indicators that can be used to measure the principal adverse impacts of your investment decisions on sustainability factors. These indicators aim to measure the negative effects an investment decision might have on sustainability.

ℹ️ Looking for a list of the PAIs? Check this article.

Here is how the EU defines it: "The difference between average gross hourly earnings of male-paid employees and of female-paid employees as a percentage of average gross hourly earnings of male-paid employees"

What is an 'adjusted' pay gap then?

The gender wage gap, once adjusted considering elements like profession and education, is referred to as the "adjusted or controlled gender pay gap".

The difference between the unadjusted and adjusted gender pay gap arises due to the circumstances that women may often work fewer hours or engage in less hazardous occupations.

What does this PAI measure?

The unadjusted gender pay gap isn't directly an indicator of discrimination. Instead, it combines the average earnings differences between men and women to provide a means of comparison.

Variables that contribute to the explanation of the unadjusted gender pay gap encompass aspects like economic participation, working hours, and length of employment. Elements related to gender, including disparities in qualifications between genders, discrimination, the general wage layout, and the variance in pay across different industry sectors, all have a bearing on the gender pay gap.

Here is the EU average for comparison:

In 2023, the gender pay gap in the EU was reported to be 12%, exhibiting minimal alteration over the past ten years. Therefore, on average women earned 12% less per hour compared to men.

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