Gender inequality is in the spotlight like never before. If the global strikes and protests of last year’s International Women’s Day reminded us of the scale and importance of the challenge, they also showed us that genuine change is within reach. This year, we must ask ourselves how we can maintain and accelerate momentum. A good place to start is looking at how we can put our money to work to drive change.
There are trillions of dollars of private investment capital circulating in the world. If we harness it correctly, we can create a fairer and more prosperous future.
How? By investing intentionally in women and girls to close the persistent economic gender gap. On current trends, parity with men on job opportunities and wages is still 202 years away. Yet, if women play an identical role in labor markets to that of men, as much as $28 trillion (or 26%) could be added to global annual GDP by 2025.
When women do earn a competitive income, they have been shown to invest in their families, creating healthier households and stronger communities. Better gender diversity in companies also means better business performance. This is a smart investment strategy.
The opportunity in closing the gender gap is enormous: we are leaving so much talent, resources and — let’s be honest — money on the table. Public funding programs do a lot of good. Look at the 2X Challenge, which aims to mobilize $3 billion of investment in women globally. But it’s not enough. If we’re serious about seizing that opportunity and helping to reduce inequality, we all need to be involved.
Gender lens investing
As the name implies, gender lens investing (GLI) is about layering another way of looking at investment over our traditional criteria. In short, it’s investing to intentionally drive gender equality.
GLI is about examining the role of gender in every aspect of investment. This can mean making investment decisions that factor in things like female representation in the business’ leadership or the company’s impact on its community with regards to gender. Or it can mean investing in companies or funds actively looking to improve gender equality with their business model and/or investments. If we look to our network of impact investors, for example, the UK’s Big Society Capital is developing the world’s first gender lens property fund to provide housing for vulnerable women.
Or look at Asia’s Patamar Capital, working with the Australian government’s Investing in Women initiative to finance the growth of women-owned small businesses in Indonesia, the Philippines and Vietnam, mentoring and training female entrepreneurs alongside investment. Calvert Impact Capital‘s GLI strategy, which started with examining gender dynamics across their portfolio, has evolved to taking a sector and region-focused approach. Its first sector approach to empowering women and girls has focused on providing debt capital to increase access to clean energy to women in the developing world.
If we look to retail products, As You Sow’s Gender Equality Funds rates mutual funds based on how well the companies they invest in are promoting gender diversity and equality. One listed fund is the Pax Ellevate Global Women’s Leadership Fund
which implements a global, factor-based investment strategy designed to capture the investment returns associated with gender diversity and women’s leadership. Another great resource for retail investors is Veris Wealth Partners’ list of gender lens-focused investible opportunities in the public markets, which includes options from AXA, Glenmede, U.S. Trust, Wellington Management, National Australia Bank and several others.
Change is in the air — GLI is only picking up speed. According to the GIIN’s 2018 Annual Impact Investor Survey, about 70% of impact investors apply a gender lens to their investment process. Funds listed in Project Sage 2.0, a global scan of private equity, venture capital, and private debt funds with a gender lens, have raised over $2.2 billion in capital while in public markets, GLI-mandated investments have been estimated to account for $2.4 billion.
Of course, as in the broader fight for gender equality, there are obstacles to overcome. GLI investing is dogged by misconceptions: that it is hard to do, or somehow not “serious” or “real” investing. Or people just don’t know about it.
But organizations like the GIIN, through its Gender Lens Investing Initiative, are creating resources, including a resource repository, to make it easier, and there’s nothing frivolous about fully utilizing the talents and abilities of our whole population. Many of the investors we work with on GLI, including some of the world’s biggest investors, believe this isn’t only good for greater gender equity — it’s also just good business. They see a lot of opportunity in a whole segment of promising companies with a gender aspect that are too often overlooked and underresourced.
Invest in equality
The case for investing in women and girls is overwhelming, for global progress and from a financial perspective. It just makes good business sense. By investing with a gender lens, investors can access the world’s greatest untapped resource: the full talent, intelligence and passion of billions — half of the global population. By investing in women, we are all collectively better off, while helping solve other (expensive) issues such as improving health and inequality.
The fact that it is also a good thing to do — well, that makes this one of life’s rare genuine win-wins. We should be seizing it with both hands. So, this International Women’s Day, if you’re a professional investor, take a hard look at your portfolio through a gender lens. And if you’re not, look at your pension provider, your investment manager (if you have one), your bank and ask what they’re doing to support gender equity with your money.
If we are serious about building a fairer, more prosperous world, it’s time to ditch the rose-tinted glasses and look at the world through a gender lens instead – both in our personal lives and our financial ones.
Amit Bouri is CEO of the Global Impact Investing Network (GIIN).