Five must read resources on impact investing, gender and racial equality

SVX is hosting a three-part blog series to build engagement and understanding on key topics amongst active and interested impact investors in Canada, particularly individuals, families, foundations, and faith-based organizations. This series has been prepared alongside our annual All-in Impact Gathering.

This post includes five must read resources on impact investing through a gender and a racial lens. Please note that these are not the only resources available, and we cannot categorize them as the top resources, as there are so many individuals and organizations writing and thinking on this topic. But they are excellent sources of information that will give you a great overview of thinking on the intersection of impact investing and gender and racial equality from recognized and respected sources.

1. Gender-Lens Investing Strategies for 2019 by Emilie Cortes in Stanford Social Innovation Review

This article presents four strategies to ensure investments continuity in organizations, products, and services that benefit women, who over the last decades have proven to create stronger and more stable economies.

Key takeaways from this resource include:

  • Investment portfolios are adding fund pockets that are invested with gender lens as the primary criteria. For instance, Toniic’s T100 study of 100-percent impact portfolios performed found that it was the case for across 76 private portfolios and a value of about $38 million.
  • Impact investing is intersectional, and we must make sure that the growing investment focus on women does not leave behind women of color.
  • Credit Suisse found that companies where women hold 25 percent of decision-making roles generate 4 percent higher cash flow than the overall MSCI All Country World Index. This infers that making gender a factor of your decision making and giving women a seat at the table both deliver better financial results and improve gender equality. It is recommended to use data and benchmarks to keep track of your journey including more women.
  • Investing in women is not a risk — it’s an enormous opportunity to make change and enhance the well-being of half of the global community.

2. How to Invest with a Gender Lens by Marigold Capital

This article from Marigold takes a look beyond just investing in women-owned businesses and board-level diversity, in an effort to encourage and accelerate more types of gender lens investing.

Key takeaways from this resource include:

  • Considering external aspects for investment decisions may ultimately lead us to address market conditions and decrease systemic biases better.
  • Three main questions can help visualize gender representation in a business value chain: how, why and with whom. Reviewing business processes (and not just outcomes) through a gender lens is critical to rethinking and reforming markets and correcting systemic biases.
  • There are several tools that can be leveraged to implement a gender lens investment approach, such as: using a gender balance in selection, documenting due diligence, designing simpler term sheets to better balance the power between funders and entrepreneurs, using impact metrics, etc.

3. Gender Lens Investing Case Study by the Global Impact Investing Network (GIIN)

Glenmede views gender lens investing as a strategy. This strategy enables investors to overlay rigorous financial analysis with gender characteristics in alignment with the client’s return objectives, such as increasing women’s access to capital.

Key takeaways from this resource include:

  • Glenmede’s approach to gender lens investing relies on three critical tools: first, weighing portfolios toward more socially aware and gender equitable companies while offering competitive financial returns, second, shareholder engagement in impact evaluation process, and finally, thought leadership like hosting an Investing in Women conference.
  • Gender lens investing aligned naturally with Glenmede’s history of supporting and promoting the influence of women in the firm. For instance, two of Glenmede’s four founders in 1956 were women. Furthermore, 50% of Glenmede’s employees are women, and more than one-third of our client-facing staff are women
  • Glenmede approaches gender lens investing in a 360-degree manner that seeks to increase gender equity not only within boards and senior management but also further women’s rights on a global scale.

4. An Investors’ Guide to Investing for Racial Equity by Kristin Hull at Nia Impact Capital.

The article outlines steps to incorporate a racial justice lens to investment decisions. In order to reduce the racial and gender wealth divide moving forward, many of us will need to bring a racial and gender lens to all levels of investment decisions.

Key recommendations from this resource include:

  • Divest in companies causing racial injustice and invest in companies that include people of color in executive management and on the board of directors. Then, use your voice to raise awareness about the benefits of diverse leadership and pave the way for others to do the same.
  • Use voting proxies to speak up for social justice policies and practices in companies they own. Writing letters to companies and filing shareholder resolutions is an effective way to begin dialog toward greater equality.
  • Choose diverse (BIPOC) investment advisors and portfolio managers in your selection of wealth management services and investment funds.
  • Select companies to invest in based on their internal policies and practices, such as: hiring practices, living wage to employees, Board recruitment policies, sexual harassment policies, diversity and inclusion trainings, family leave policies, childcare, and more.
  • Consolidate and align everyone on your strategy through an Investment Policy Statement (IPS), serving as a central for any given portfolio to provide direction and parameters for the investment managers.

5. Investing in and With Entrepreneurs and Leaders of Color by Mission Investors Exchange

The article provides tangible ways for impact investors to cross the barriers that block access to capital for BIPOC communities, holding back both the economy and the nation’s talent from reaching its full potential.

Key takeaways from this resource include:

  • Investing in BIPOC leaders will incite venture capital firms led by BIPOC to more likely support investees or communities of color, such as through jobs, indirect investments, and more.
  • Reaching outside one’s network and developing partnerships is critical to building networks proactively to broaden your access to diverse communities.
  • The opportunities to make a difference are diverse along the spectrum of risk, return, and tenor.
  • Foundations can lay the groundwork for building a gender-lens impact investing field and, then, attract and engage other foundations, fund managers, and investors to share and increase the momentum to the cause.

This resource is available in the Racial Equity and Impact Investing library at Mission Investors Exchange.

Honourary Must Read Resources

There are other honourary “must read” resources you can also check out, including:

  • Phatisa, another GIIN case study in the sub-Saharan African context. Phatisa is a Mauritius domiciled, sector-specific African private equity fund manager totaling more than US $400 million in fund management. Read more about Phatisa’ s case study to learn about the early stages of implementing their gender lens strategy.
  • Impact investing with a gender lens. This webinar on “Impact Investing with a Gender Lens” will answer specific questions that will help you develop a rationale for why investing through a gender lens. Marc Rand, Managing Partner of Community Capital Advisors interviews Kaylene Alvarez, CEO of Athena Global on what impact investing looks like with a gender lens.
  • Impact investing in the Indigenous context: Many Indigenous communities still lack the necessary infrastructure, and impact investors can play a role as well. This report seeks to answer a crucial question that has been under-examined in the Canadian impact investment market: What is being done by impact investors, and how can the sector contribute to the betterment of Indigenous communities in Canada?
  • Why it pays to invest in gender diversity: This article shows supporting evidence and graphed data to raise awareness about why and how it pays to invest in gender diversity. Their key conclusions prove that high gender diversity companies have delivered better returns and then, provides a global breakdown of how economically leading continents have been doing on this front.

Do you want to learn more about gender and racial equality?

important that we also understand the underlying challenges and issues we are facing. Here are a few resources to provide a deep dive on the topic beyond the realm of impact investing:

Do you have any questions or comments? Did we miss any resources? Please let us know by sharing questions and comments below.

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

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