How to Build a Gender-Lens Investment Strategy

Giving Compass’ Take:

• There are social and financial motivations driving gender-lens investing. Creating clear goals, strategies, and metrics are key to succeeding in lifting women up.

• What are your priorities when it comes to investing? How can you align your existing goals, systems, and metrics to incorporate gender-lens investing? 

• Learn why gender-lens investing is financially smart. 

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Gender lens investing considers investments’ social impact on women alongside financial returns. In the past several years, there has been tremendous growth in impact funds, exchange-traded funds, and mutual funds focused on gender-lens investing. Recent studies have indicated over $2 billion of assets focused on gender-lens investing.

There are opportunities to apply a gender lens at four key inflection points: when defining the mandate for gender-lens investing, developing a strategy, due diligence, and when providing operational assistance to portfolio companies.

1. Define the mandate: The gender-lens investing movement began with a strong focus on women-led businesses. Investors applying a gender lens can support gender-equitable workplaces, companies that produce products and services that serve women and companies that work on structural issues such as reshaping rigid gender norms and addressing violence.
2. Develop your strategy: Drivers could include gender-blind processes for recruitment and promotion, good parental leave policies, and equal pay — and will certainly vary by industry and geography.
3. Incorporate Metrics into Due Diligence: Once these critical factors have been identified, investors can incorporate corresponding metrics into due diligence. Equal pay, for example, can be clearly measured through historical data for specific roles.
4. Support investees’ progress: Finally, investors can advise investees or portfolio companies on how to be more gender equitable and provide them with advice and support on strengthening their business models.

Read the full article on gender-lens investing by Rachna Saxena at ImpactAlpha