How gender lens investing is creating impact around the world

 

Gender lens investing is emerging as one of the most exciting new ways of using capital to create positive social impact for women and girls.

In the developing world, gender lens investing is helping to lift women and girls out of poverty and create opportunity where previously there was none. By facilitating the flow of capital to women-led enterprises and organizations that benefit women and girls, gender lens investing has the potential to meaningfully improve their quality of life.

First and foremost, gender lens investing is about accelerating diversity and inclusion in the workplace. That includes creating opportunities for women entrepreneurs and executives to obtain capital, secure leadership roles and have greater influence over decisions.

A different way of thinking
Traditional financial analysis has mostly ignored gender considerations in capital allocation decisions. By contrast, gender lens investing integrates questions and data about gender to inform and guide investment decisions. As an analytical tool, a gender lens helps investors identify investment risks and opportunities with greater effectiveness.

Specifically, a gender lens assesses opportunities to empower women by evaluating how an investment supports: 1) women’s leadership, 2) women’s access to capital, 3) products and services beneficial to women and girls, 4) workplace equity, and 5) related shareholder engagement and policy work. Investments that satisfy one or more of these criteria are presumed to deliver greater impact to women and girls.

More and better options
Just a few years ago, only a handful of investments were designed to achieve these objectives. Today, more than a dozen dedicated gender lens investment opportunities exist. Many other creative investment opportunities are in development. These options range from fixed-income to equity investments in private and public markets. Some investments are open to all investors, while others are proprietary or restricted to accredited or qualified investors.

Gender lens investing opportunities come in two broad categories:

  • Dedicated gender lens solutions that explicitly adopt one or more of the goals stated above
  • Funds and managers that do not offer a specific gender lens mandated product, but who integrate significant gender criteria into their security selection and/or engage in shareholder advocacy and policy work to advance gender inclusiveness

Each gender lens investment has its own gender criteria. Some products have women’s leadership as a singular focus and select securities based solely on the number of women on boards or in the C-suite. Still others channel capital to women – whether as coffee growers in Latin America, first-time home buyers in the US or entrepreneurs seeking angel investors.

Another type of gender lens opportunity funds innovative products and services beneficial to women, such as banking services to older women in Japan, HIV prevention in South Africa, and medical devices tailored specifically to women’s needs. Lastly, a number of gender lens solutions promote diversity and gender inclusion through significant shareholder engagement and policy work. Most products apply more than one gender lens criteria.

We own the future
As a society, we own and shape the social constructs and financial systems that govern our lives. We make the rules. We assign the value. Yet, we can feel removed from these processes and our power to bend the arc of our institutions. At its core, investing with a gender lens challenges the financial system and investors to better allocate capital with much more thought to gender imbalances.

Investing for all, and by all, has to be our ultimate goal.

Patricia Farrar-Rivas is CEO and Luisamaria Ruiz Carlile is a wealth manager at Veris Wealth Partners.

Click here to download Veris’s new white paper, Women, Wealth & Impact: Investing with a Gender Lens 2.0.


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