Our Investment Director, Karen Ng, reflects on her key takeaways from participating in GIIN’s Gender Lens Initiative (GLI) as a working group member over the past year. Karen attended the final event in New York in May.
One: Understand what gender lens investing is (and what it isn’t)
When people talk about gender lens investing, they may be referring to very different things. They may mean investing in women-owned enterprises, workplaces that promote gender equality, or enterprises that offer products or services that improve the lives of women and girls.
However, this broad definition shouldn’t translate to a box-ticking approach where investments are labelled as gender lens simply because it happens to meet certain equality criteria (e.g. % of female in workforce, % of women in leadership). Instead, investors should demonstrate a genuine and explicit intent to promote gender equality, which is reflected in the decision-making process and demonstrated by positive outcomes experienced by women and girls.
Two: Familiarise yourself with the business case
Beyond the belief that it is the “right” thing to do, it is helpful to arm yourself with evidence that investing in gender equality is also the “smart” thing to do. In terms of scale, McKinsey estimated that $12 trillion could be added to global GDP by 2025 by advancing women’s equality.
Investors also found a positive link between financial performance and gender diversity. Calvert Impact Capital analysed its portfolio and observed that gender diversity, particularly at the leadership level, drives better financial performance. Another research report from BCG shows that women-led start-ups garner less in venture capital investment, but generate more revenue.
Three: Engage with the growing gender lens investing community
Investors interested in gender lens investing are joining a growing trend, with more than 87 funds across the world self-identified as deploying capital with a gender lens. These funds have collectively raised approximately $2.2bn, with a growing diversity in terms of target geographies and product types.
As I looked around the room at the Creating Gender Lens Investment Opportunities event, I felt encouraged by the presence of 30+ investors gathered to discuss how to work with businesses, policy makers and other field builders to move gender lens investing forward. Beyond making investments, we can collaborate to collect data, build evidence and engage with stakeholders outside of the immediate investment community.
Four: Use available tools to incorporate gender lens in your investment process
It may sometimes feel daunting to add an extra layer of gender considerations on established investment processes. Fortunately, in the past few years, there is a growing number of tools and frameworks available to guide investors throughout the investment process – from sourcing opportunities, analysing risks to setting appropriate metrics.
A good starting point is Criterion Institute’s designing a gender lens investing action plan, which helps investors to set an over-arching strategy. I have also found the comprehensive investor toolkit from SPRING Accelerator particularly helpful. Although it focuses on learnings from emerging markets, many lessons apply in to developed markets too.
Five: Develop investment products that explicitly promote gender equality
As tracked by Project Sage, many investable opportunities adopting a gender lens are venture capital funds in the private markets. Increasingly, there are also listed instruments such as index funds and bonds that aim to provide women and girls better access to jobs, finance and other essential goods and services.
To truly mainstream gender lens as an investment strategy, we need to develop investment products across different asset classes. At Big Society Capital, we are working with experts in the housing and women’s sectors to develop a property fund that provides safe and affordable accommodation for vulnerable women and their children.
Six: Improve diversity in your own organisation and sector
Finally, we should look inward to reflect on whether diversity is incorporated in our processes and reflected in our behaviours. Big Society Capital surveyed more than 30 UK-based social investors in 2017, which exposed gaps in our sector’s diversity and inclusion. For example, just 28% of Executive and Leadership roles were filled by women, with only 9% BAME representation at that level. These gaps continue to motivate our own diversity and inclusion plan, and our work with partner organisations, to push for better transparency and hiring practices across the sector that reflect the importance of diversity.
To find out more about how to take the first steps in Gender Lens Investing, please email Karen Ng.