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 Equity as an Outcome: The first category is investing with the intent to address gender issues or promote gender equity as an outcome. This includes investing in women-owned or women-led enterprises, enterprises that promote workplace equity, or investing in enterprises that offer products or services that substantially improve the lives of women and girls.
  • 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?

(1). Impact & Women Empowerment

(2). The Economic Case

The Three Basic Gender Lenses

(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.
  • Earnings generated by female individual distributors from selling the organization’s products or services during the reporting period.
  • 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).
  • Ratio of the average wage paid during the reporting period to female employees of the organization for a specified position
  • 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.
  • Indicates whether the organization offers a product or service that disproportionately benefits women
  • Percent of customers who are female
A summary of the three basic gender lenses

Market and Trends

  • A recent survey from the Morgan Stanley Institute for Sustainable Investing found that 67% of global asset owners identify gender diversity as an area of interest within their investment portfolios.
  • 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

  • Limitation: They tend to focus on women representation in leadership as their sole GLI metric. While important, this metric is the “easiest” leverage point for gender equality and to measure.
  • 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.
  • Limitation: There may be instances where gender equity and sustainability objectives in GIL are used as a marketing tool and produce limited tangible impacts.
  • Opportunity: As sophistication increases, organizations are expected to establish a clear theory of change and report clear impact metrics.
  • Limitation: Currently collected GIL data is often limited and does not always consider the intersectionality of race and other identities.
  • 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

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:

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SVX is financial services firm & impact investing platform connecting ventures, funds, and investors to catalyze investment capital for impact. #ImpInv #SocEnt

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SVX

SVX

SVX is financial services firm & impact investing platform connecting ventures, funds, and investors to catalyze investment capital for impact. #ImpInv #SocEnt

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