An Introduction to Gender Lens Investing

Globally, women and girls continue to experience discrimination and violence throughout their daily lives, at home, and in the workplace. These inequities can manifest in various forms as seen above.
Photo by Christina @ wocintechchat.com on Unsplash

What is Gender Lens Investing (GLI)?

Gender lens is a type of analysis which allows us to see the ways in which gender bias can affect and shape systems, approaches, and assumptions. Hence, Gender Lens Investing (GLI) is a strategy or approach to investing that takes into consideration gender-based factors across the investment process to advance gender equality and better inform investment decisions.

  • Gender Focus to Inform Investment Decisions: The second category is using a gender focus to inform investment decisions. GLI is often used to assess the commitment to gender equality of investee ventures by examining amongst other things, their mission and vision in addressing gender issues, vision or mission of ventures to address gender issues, their organizational structure, culture, internal policies, and workplace environment; their use of data and metrics for the gender-equitable management of performance and to incentivize behavioral change and accountability; and how their financial and human resources signify overall commitment to gender equality.​
Photo by Christin Hume on Unsplash

Why is GLI Important?

While surface-level EDI initiatives aim to simply “check a box”, Gender Lens Investing aims to reframe women as catalysts for societal change and new opportunities.

(1). Impact & Women Empowerment

At its core, Gender Lens Investing seeks to close the “gender gap”, defined by the World Economic Forum as the difference between women and men as reflected in social, political, intellectual, cultural, or economic attainments or attitudes. It is an important intervention for addressing systemic inequality and human rights. By investing in women, we are elevating the rights of women and girls and promoting gender equity.

(2). The Economic Case

While this ought not to be the most important reason for investing in women, it can certainly be a compelling case. Research shows that companies with women in management or on Boards repeatedly outperform companies that have no women in senior roles.

The Three Basic Gender Lenses

Fund managers and investors can use the following three broad gender lenses to promote gender equity in their investment criteria, activities, and decisions. The Access to Capital, Workplace Equity and Products and Services gender lenses can be used to seek out and categorize investment vehicles and opportunities, as well as to track impact metrics. Note that these lenses and metrics are not exhaustive, as they may vary based on political, social, economic, and geographical contexts — the gap in the Global South differs greatly from the gap in the Global North, for example. Other gender lenses you might have heard of include supply chain equity or value chain equity and advocacy, leadership and governance.

(1). Access to Capital

  • Historically and currently, women lack access to traditional capital and credit. In 2020, only 2.3% of global venture funding went to women-led startups.
  • The use of this gender lens thus focuses on the gender disparities in capital and credit availability. This lens identifies ways to move capital of different values, sources (e.g. microfinance institutions, banks, venture funds etc.), and types (e.g. grants, debt or equity) directly to women.
  • Share of women among owners or right-bearers of agricultural land, by type of tenure.

(2). Workplace Equity

  • Women face the glass ceiling effect whereby there are systemic barriers that impede a woman’s ability to advance in their workplace. Globally, women held 31% of senior leadership positions in 2021.
  • This lens focuses on the extent to which women are represented in workforce leadership. Whether in the upper management tiers of a Fortune 500 company or amongst field-workers in a South American rural farming cooperative, a Workplace Equity Lens can help investors focus on the representation of women in the leadership and workforce of organizations and on how well their particular needs are supported (e.g. in health care coverage and maternity leave).
  • Proportion of women in managerial positions

(3) Products and Services

  • Lastly, women drive 70%–80% of all consumer purchase. Currently many products and services ignore the desires and needs of female consumers. In meeting the needs of female consumers, businesses improve the condition of women by both reducing burdens placed on women and empowering women — ultimately, fostering fuller social participation and productivity amongst the women of the world.
  • The Products and Services gender lens allows investors to identify and support products and services that directly improve the well-being of women and girls such as medical care or improving financial literacy skills.
  • Percent of customers who are female
A summary of the three basic gender lenses

Market and Trends

There has been a growing interest in GLI

  • 90% of funds said that gender-related criteria were very or critically important in investment decisions.
  • Due to shifting investor preferences and consumer behavior, investors are seeking opportunities to align their values, one of which being gender diversity, within their investment portfolios.
Public Market GLI Products AUM Growth in billions
Number of GLI Funds over the years
Private GLI Market Valuation over the years

Limitations and Opportunities

Many gender lens investment products remain limited in scope

  • Opportunity: A more holistic effort that tackles a multitude of metrics is needed for systems change. Public and private GLI products are increasing in sophistication and integrating other gender lenses.
  • Opportunity: As sophistication increases, organizations are expected to establish a clear theory of change and report clear impact metrics.
  • Opportunity: The intersectionality of race, sexuality, those with disabilities, religion, among others can exacerbate the challenges faced by various minority groups. A more multidimensional approach is needed to address this intersectionality. Gender diversity data is improving, and will increasingly be disaggregated by intersectionality.
Photo by Christina @ wocintechchat.com on Unsplash

On the Horizon

Gender Lens Investing is a new but also growing field. Public and private GLI products are increasing in sophistication and integration with other gender lenses. Organizations are expected to strengthen and establish a clear theory of change and report clear impact metrics. As we see interest from all sides: investors, ventures, researchers, and on an individual level, investment products, methodologies, and strategies will only become more clear and inclusive.

Recent Activity in the GLI Space:

  • The 2X Challenge mobilized $4.5 billion in gender smart investments in 2 years, exceeding its initial goal by 50%.
  • Mastercard’s Impact Fund invested $20 million in the Impact Investing Platform CNote to assist women-led and minority-led businesses in recovering from the pandemic.
  • BDC’S Women in Technology (WIT) Venture Fund: $200M fund dedicated to investing in women-led technology companies and helping build a robust ecosystem to support women in tech today and in the future.
  • Equality Fund: A $300M fund meant to ensure that meaningful resources — and power — flow to women’s rights organizations and feminist movements everywhere.

Organizations To Watch In The Space:

Here is a non-exhaustive list of organizations that are part of the Equality of Fund’s collective of partners, centered around a shared vision to build a gender equal world along with a number of different ecosystem partners:

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