The gender pay gap at the Scottish National Investment Bank has increased by almost a quarter in the 20 months since it was established, according to a new report.
Described by First Minister Nicola Sturgeon as the UK’s first mission-led development bank, the Bank was launched in November 2020 with £2bn of capital from the Scottish Government.
It was designed to provide long-term investment for Scottish businesses and projects that generate environmental, social and financial benefits to the nation.
However experts claimed that its growing gender pay gap showed the Bank was “failing to live up to expectations”. The Bank said its pay gap was illustrative of a wider challenge in financial services and investment.
The Bank’s recently-published 2022 Equality Strategy reported a mean pay gap of 21.9 per cent and a median pay gap of 28 per cent.
This is an increase of almost 24 percentage points and 11 percentage points respectively, since the Bank’s 2021 Annual Report, which noted a mean pay gap then of two per cent in favour of women, and a median pay gap of 17 per cent in favour of men.
The gender pay gap refers to the percentage difference between men and women’s average hourly pay. Scotland’s gender pay gap is around 10 per cent for full-time employees.
The Bank’s three missions, set by the Scottish Government, are: achieving a Just Transition to net zero by 2045; extending equality of opportunity through improving places by 2040; and harnessing innovation to enable our people to flourish by 2040.
Anna Ritchie Allan, executive director of Close The Gap, a policy and advocacy organisation for women’s participation in the labour market, said the Bank’s pay gap was “stark” and pointed to wider issues in its approach to gender equality.
“The legislation that created the Bank has gender equality at its heart, with a range of progressive provisions specifically designed to advance equality for women. So it’s really concerning that we’re seeing ‘business as usual’, with the Bank reporting a stark gender pay gap, and a lack of clarity on how this will be addressed,” she said.
Ritchie Allan said the Bank had produced a “generic equality strategy in place of the gender equality strategy” it was legally required to publish, and that the focus on women had been diluted as a consequence. The equality strategy does not fully set out the causes of the pay gap or engage with pay inequality, she added.
“The Bank is intended to be a model for doing things differently, but so far it’s failing to live up to expectations and is very far from being a progressive force on women’s economic equality,” Ritchie Allan said.
The legislation that created the Bank has gender equality at its heart, with a range of progressive provisions specifically designed to advance equality for women. So it’s really concerning that we’re seeing ‘business as usual’, with the Bank reporting a stark gender pay gap, and a lack of clarity on how this will be addressed.
Anna Ritchie Allan, executive director of Close The Gap
The Bank’s pay gap appears to have been affected by an increase in staffing. In 2021, it employed 33 people including Eilidh McTaggart as chief executive officer. McTaggart left the role in January this year, but was replaced by a female interim CEO. There are now 61 people employed by the Bank.
The Bank has been marred by controversy since its launch, with questions raised over McTaggart’s sudden resignation and accusations that it invested £50m in a forestry fund with links to tax havens.
Of the increased pay gap, a spokesperson for the Bank said it was “committed to addressing equality, diversity and inclusion through our investment activity, supply chain and as an employer.”
“The Bank has good gender balance overall, with a gender-balanced board, and females representing 49.2 per cent of our total workforce and 66.6 per cent of our Executive Team,” they continued.
However, the Bank’s spokesperson said there are still a higher number of males in senior investment positions, which “reflects a wider challenge in financial services and investment roles more specifically”.
“A key focus of the Bank is to tackle under-representation of women in senior investment roles which in turn will have a positive impact on our gender pay gap.”
The spokesperson said actions to redress the gap will include reviewing its approach to recruitment, benchmarking its employment practices with an external expert, and developing internal talent by supporting under-represented groups.
A key focus of the Bank is to tackle under-representation of women in senior investment roles which in turn will have a positive impact on our gender pay gap.
A spokesperson for Scottish National Investment Bank
A Scottish Government spokesperson claimed the publication of an equality strategy was a “step forward in the Bank’s ambition to champion and endorse equality and fair work”.
They added: “It is positive to see that gender representation across the Bank is fairly even, however further work is needed to address wider equality issues, including the gender pay gap which continues to exist across the UK’s financial sector.
“While pay and recruitment are ultimately matters for the Bank, the Scottish Government welcomes the steps set out in the strategy to address these issues.”
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