Women in senior management roles at energy firms remains stubbornly low, but efforts to improve gender diversity are moving apace

Firms with more women at the senior executive level outperform those with lower representation. Yet, historically women have been consistently under-represented in senior managerial positions and in the boardroom across all industries, and even more so in energy-related sectors.

According to an OECD/IEA analysis of data from just under 2 500 firms classified in energy-related sectors, women make up just under 14% of senior managers, with representation strongest in the utility sector. Excluding utilities, women hold less than 12% of leadership roles. This compares with 15.5% of the 30 000 non-energy firms in the sample.

It has been well-documented that women in leadership positions enable companies to maximise the power of diverse perspectives and innovative decision making, which improves the overall success of a firm’s performance. S&P 500 companies with women in senior management above the median saw a 30% higher return on equity and a 30% lower earnings risk relative to lower-ranked peers, according to Bank of America Global Research.

However, looking at the age distribution of executives, there are some signs of improvement in participation of women in senior management roles at energy firms. Nonetheless, the percentage of women as senior managers and board members remains stubbornly low. Given the low starting point, capitalising on women’s potential contribution could be years away for most energy firms.

The data available now on understanding gender gaps in the energy sector and where to focus policy action are limited. This is why the IEA has taken on the role of Co‑ordinator for the Clean Energy, Education and Empowerment International Initiative (C3E international) to strengthen knowledge and data collection work in an effort to accelerate progress on diversity and inclusion. In 2020, the IEA Gender Initiative started work on bringing data-driven solutions to the table by collecting better disaggregated data on gender and energy as well as strengthening methodologies. 

Though the data initiative is still in the early stages, by drilling down in energy company data available as of end-2019 from the Refinitiv PermID database, we have built a composite of energy firms versus firms in other industries to analyse gender diversity in the boardroom and senior management positions. Unless otherwise noted, we use the term “senior management” to reflect both board membership and senior management.

Based on data from almost 2 500 firms and over 38 000 employees, women make up only 13.9% of senior management within the energy and energy utilities composite, which is marginally lower than in the over 30 000 firms in the sample from non-energy industries at 15.5%.

Among the energy business lines, women in senior roles are better represented in the utilities sector at 17.1%, with electric utilities and independent power plants at the low end at 16.5%, followed by natural gas utilities at 18%. Multiline utilities are at the higher end of the distribution at 20.3%.

Excluding utilities, representation for all other energy-related business lines is far lower at an average 12.1%. Somewhat surprisingly, renewable energy firms are well below the composite average at just 10.8%, and only slightly higher than the coal sector, which has the lowest representation at 10.6%. Women represented in oil and gas firms is 12.1%, while firms in the oil and gas equipment and services sub-sector were slightly higher at 13%.

In all industries the dispersion of female representation is wide. The vast majority of industries have a higher mean than median, suggesting a skewed distribution with many firms having low (or no) female representation. This is particularly evident in the energy sector where over 25% of firms show no evidence of women senior managers. 

There is a much higher representation of women leadership positions at large energy‑related multinational enterprises, many of whom have put in place corporate policies focused on diversity and inclusion. There are many reasons for this.

Firstly, larger firms tend to come under increased scrutiny from investors and are therefore more likely to have adopted comprehensive gender employment practices. This is also true for publicly listed firms. In the United States, for the top 500 companies, 90% publish sustainability reports based on environmental, social, and governance goals; however for the next 500 companies (i.e. companies 501‑1 000), this rate falls to 39%, according to a G&A Institute Russell 1000 Research Report, 2020. And finally, firms that operate in multiple markets may also face greater scrutiny, with incentives to meet the demands of the market for which concern over diversity is most pronounced.

It is currently not possible to measure these impacts directly, but in order to cast light on this issue a sample has been generated based on the OECD Analytical Database on Individual Multinationals and their Affiliates (ADIMA) to identify the 500 largest public multinational enterprises (MNEs) and their subsidiaries (approximately 1 500 firms of which 174 are within the energy composite). For the energy composite, ADIMA firms have a higher share (17.1%) in comparison with the non-ADIMA firms (13.6%).

Female representation is relatively lower in more senior management positions relative to less senior management positions. Within the energy sector this is particularly evident for the top posts (e.g. chair of the board, CEO, president), at less than 5%. All of this suggests that a further glass ceiling exists beyond the glass ceiling to enter senior management in general, and that this problem is particularly acute in energy and energy utilities firms.

Women in leadership roles also differ markedly across countries. For example, differences in gender diversity at the board level can be driven by policy and cultural factors by the country headquarters of the firms, according to data from the OECD Corporate Governance Factbook, 2019.

In most countries there are more women in senior management roles in non‑energy firms when compared to energy and energy utility firms. However, in the Russian Federation (“Russia”), Brazil and Japan more women are in senior management roles in energy firms, although only marginally so in the latter two cases.

Indeed, it is striking to see differences of over five-fold between the countries with the highest and lowest female representation for both energy and non-energy firms. The countries with highest representation of women in energy firms are Russia (23.1%), Australia (15.5%) and United Kingdom (15.5%), and the lowest is Japan (3.1%).

While the difference in seniority of management roles can perhaps be explained by other social and cultural issues, it cannot be explained by academic qualifications. Education levels are roughly similar for male and female executives, with around 50% having a bachelor’s degree, 35% a master’s degree and 15% a doctorate degree for both energy and non-energy composites. 

Differences exist, however, in the subjects in which senior managers possess their highest academic qualification, both across industry composites and on a gender basis. In the energy composite, the fields in which given academic qualifications are disproportionately highly represented (> 1.3 in terms of the ratio of the shares) amongst women senior managers are business administration, accounting, law, marketing and political science.

Data show that the millennial women managers in the energy industry are faring much better than previous generations. Comparing the age of senior managers by gender provides some insight on the direction which gender diversity is likely to take in the years ahead. Taking decade of birth as the cohort, both energy and non-energy firms show a consistent pattern, with participation progressively more diverse for the younger cohorts.

However, the pattern is much stronger for the energy industry; and, indeed, by 2020 women were outpacing the non-energy composite by a large margin for the youngest cohort (i.e. staff born in the 1980s and thus aged 30-40). It is quite striking however that in this cohort the female representation is still less than 1 in 3 positions. The evidence is strongest for the natural gas utilities and the renewable energy industries, where the figure for the 1980s cohort is around 40%.

Strengthening gender diversity in the energy sector requires long-term efforts to boost inclusion. There is clearly strong evidence that companies who embrace more gender inclusive pathways for women in senior management will be better positioned to navigate the unprecedented and tumultuous changes of the low‑carbon transition.

To this end, the C3E International Initiative, under the IEA Technology Collaboration Programme and the Clean Energy Ministerial, specifically aims to enable greater gender diversity in clean energy professions. This is essential to harness the diverse and innovative perspectives that senior women managers can provide to accelerate clean energy transitions all over the world.