You might have missed it, but a U.S. company just made big news in the business world with a welcome announcement about its policies for women in its labor force.
L'Oreal USA has joined Deloitte Switzerland, CEDP Poland, and Compartamos Banco Mexico as the first U.S.-based company to receive the EDGE (Economic Dividends for Gender Equality) certification, according to reports in the Washington Post.
The EDGE certification recognizes companies with exceptional gender practices. It is the only universal business certification that addresses gender.
EDGE Certification isn't easy to attain. For six months, L'Oreal USA shared data and participated in surveys, assessments and evaluations by a third-party auditor. Simply put, L'Oreal USA's certification is a well-earned great step forward.
But as laudable as L'Oreal USA's efforts are, good corporate gender practices can't end with one company -- or at any office door. Women's empowerment requires a much more comprehensive -- even global -- perspective on the sourcing of materials and labor.
Women's collectives in countries like Ghana (where many companies source raw goods such as shea butter) address many of the same issues companies seeking the EDGE certification are attempting to tackle. A natural next step for companies seeking to empower women is to look at how they can also purchase from and employ women's collectives in developing countries.
If widely adopted, such a move could empower millions more women and transform the world.
Around the globe, women face significant barriers to success. But in developing countries, the obstacles are even greater. Unequal property rights, limited legal protections, poor working conditions, pay discrimination, and a lack of access to credit are just some of the challenges that hamstring women in Ghana, Haiti, Sri Lanka and other developing nations.
In Women Thrive Worldwide's recent report, we found that the economic advancement of the very poorest people -- those living on less than two U.S. dollars a day -- will depend on investing in women, and especially on promoting leadership development and networking among women living in poverty.
Women's collectives are sensible candidates for such investment. Community-rooted associations like DAA in Ghana or Honduras's COMUCAP can bring together underrepresented women in local communities and provide access to the resources women need to succeed at work and beyond. Collectives can also help low-income women improve leadership skills and secure a sustainable, family-supporting livelihood.
As it turns out, there's a compelling business case for corporations to invest in women's collectives: community stability and profit-supporting economic growth.
Over the past seven years, McKinsey & Company has released an annual report "Women Matter," which has repeatedly found that corporations with women in executive roles perform better than those with no women executives.
Families in developing countries show the same kind of competitive edge when women are economically empowered. Women reinvest 90 percent of their income into their families and their communities, according to the World Bank. They use that money to send their children to school and pay for household necessities like clothing, food, and medicine.
Helping women gain economic equality is a key factor in reducing poverty and growing entire nations' gross domestic product, which is good for business.
It's important to remember the fundamentals of a buyer's market, too. I and many other consumers are looking for products we can feel good about -- especially products that help empower women. This consumer market is a powerful incentive, or it should be, for businesses that already internalize gender equity principles in their labor practices to go even further.
Corporations can play a significant role in promoting growth and improving the quality of life for women in developing countries. I applaud L'Oreal's commitment to women and opening their company to transparency and hope many other corporations follow suit. I hope businesses will also take the next step and recognize the full economic potential of women in developing countries. Until the economic power of women workers and producers is tapped, corporations -- and the world at large -- are missing a tremendous opportunity for profit and social good.