This article was written by Suzanne Biegel and originally posted on LinkedIn. We are excited to host our second training with Suzanne and CASE Faculty Director Cathy Clark on Getting Gender Smart: Impact Investing with a Gender Lens at Duke University on September 9-11, 2019. Find out more and register to join us here.
How to invest for a gender equitable world: a 15-step guide
I started investing in women and girls in the early 2000s after I successfully exited the company I helped to build. As an entrepreneur myself, I was familiar with the challenges women founders face. Too often, they are underestimated, unseen, and undercapitalized – you’re probably familiar with the statistic that women have received just 2.2% of venture capital in the US and even less in other places in the past several years. I wanted to use my capital to back not only women entrepreneurs but also businesses that are good for women and girls.
Over the last two decades, I have invested in more than a dozen early-stage companies, alongside venture funds, community investments, and public market vehicles, as well as advising private and institutional investors on their own gender-smart investment strategies.
For me, gender lens investing isn’t just about putting more capital in women’s hands. It’s a chance to identify and support exciting initiatives that have the capacity to solve the world’s greatest challenges like climate change and environmental sustainability, transform gender roles and norms, and improve the lives of girls and women around the world. Investing in this way means keeping two types of returns top of mind: a fund or a company’s potential for impact, and that fund’s financial target or the capacity for a business to grow and return capital sustainably.
If you, like me, are interested in using a gender lens in investing for impact, this article is for you. Here’s a list of 15 questions to help inspire your thinking and decision making, and to help you identify investment options that are most likely to make an impact and deliver financial returns. You can start to incorporate a gender lens into most of your investments – even those that don’t seem to be women and girls related at first glance. Gender equality is good for everyone and has an amplifying effect across every issue.
First Principles
1. Which girls and women (or men and boys) do you want to impact, where, and how?
Are you aiming to positively impact the lives of adolescent girls in West Africa? Create good jobs for women in industries where they are traditionally underrepresented? Improve access to reproductive healthcare for marginalized populations in the United States? Increase access to capital for women entrepreneurs? Women and girls are not a monolithic group, and diverse problems require diverse solutions. The clearer a company or fund is about who it is aiming to impact and how, the more effective it is likely to be. And sometimes, the best opportunity to achieve gender equality might be to invest in solutions with or for men and boys. Do you know your target?
2. Is it a problem that needs to be solved, or a solution that is looking for a problem?
Just because an issue is a problem in one place doesn’t mean it will be somewhere else – or that it can be addressed using the same solutions. It’s important to understand the context and the direct experience of those you’re aiming to help.
3. Does the data support the investment thesis?
The more you know about the problem you aim to solve – for whom, where they are, how the issue impacts them – the more likely you are to be able to identify viable solutions and market opportunities. This may mean looking for data in less obvious places, including data collected by NGOs, governments, academia, and more. And are the voices of the people these solutions are for represented in that data? Or do you need to invest with patient capital or amplify with a grant, to build the evidence and insights?
Going Deeper
4. Are women (or girls, or those you’re aiming to address) involved in creating the solution?
This could be as leaders, innovators, product developers, research participants, employees, customers, workers in supply chains, fund managers. If you are not engaging the perspectives of the people for whom you’re aiming to create impact, you’re leaving money on the table – and diminishing your potential impact. Nothing for us without us.
5. Is their approach to the problem intersectional?
Are they taking into account race/ethnicity? LGBTQI? Does the work lift up or address opportunities or challenges for everyone, or what might you be missing?
6. Are you just counting women, or are you really looking at the value of gender equity and balance?
Partly, this is about looking at qualitative as well as quantitative measures: 60% of a business’s employees may be women, but in which roles, and with what quality of jobs, equitable pay, decision making, and mobility? Where is having women in product development or in decision making in leadership getting you to a better outcome?
7. How is impact defined and measured?
If you’re looking for a social as well as financial return, it’s important to be clear from the beginning about what impact you’re aiming for. What are the measures? How are you going to get there? Are the investors, entrepreneurs, and fund managers aligned with each other on what impact looks like? And if the entrepreneur doesn’t know how to measure impact, how are you going to help them? The GIIN and the Impact Management Project have essential resources for understanding how to measure impact effectively. And there are many more.
8. Do you understand the social and cultural barriers that could get in the way of success?
No business, product, or intervention can solve challenges like gender-based violence, access to family planning, or girls’ education by itself. Where are the myriad places where public policies actually hold women back? (There are so many.) Who are your allies in addressing policy, regulatory levers, and social norms change, and how can you work with them to instigate systemic change?
How you invest matters just as much as what you invest in
9. How you are sourcing, screening, diligencing, and executing investments matters.
Who is involved in that process? Where might you have implicit or explicit bias? What and how are you asking questions, negotiating, engaging? Do you have the team to help you find and make the kinds of investments you want, to achieve your gender equality and equity goals?
10. If a business or fund you’re investing in isn’t great on gender equality or equity right now, can you use your voice and influence as an investor to get there?
Shareholders can carry enormous power, so use yours wisely. Can you help the entrepreneur or fund manager to see opportunities they would not have seen, address risks they might not have realised where there, or get to better impact outcomes by using a more sophisticated set of lenses and approaches? Look at policies and practices, not just products and services.
11. Do the people who are helping you invest know what gender lens options are out there?
Do they know what good looks like? How are they approaching helping you to find the best gender-smart investments for your goals? There are plenty of options out there but we still don’t have every investment product we might want. If what you’re looking for doesn’t exist yet, might you be in a position to create something new that meets your needs?
Extra Credit
12. Use a gender lens to identify risks and opportunities in all your investments.
There are so many examples where not designing for gender equity causes us to miss things. It might be not thinking about safety for women in transport, or not thinking about how gender-based violence plays out in the workplace and at home. Maybe it’s creating new market opportunities by making a seemingly “gender neutral” product or service more desirable for women, or a woman-focused product more desirable for men. Whether you’re looking at public companies or private ones, you can start to pay attention and ask new questions about your portfolio. What am I really investing in? How do I know if this company is really good for gender equity?
13. Investing for gender equality doesn’t always mean investing in women.
Sometimes the solutions may be ones primarily addressing men, or addressing both men and women. For example, companies with good paternity and maternity leave policies have been shown to have more impact than just good maternity policies alone. If you invest in a company that is focused on job creation for both men and women, even if it’s led by a male entrepreneur, there may still be an enormous opportunity to have a positive impact on women’s job creation and inclusion. There is evidence that when women start to do better financially, there is often an increase in domestic violence. So what can you do to help both women and men deal with shifting gender roles?
14. Impact investing with a gender lens doesn’t necessarily mean investing in traditional “women’s issues.”
Investing in women and businesses that positively impact women’s lives may be our best route to addressing climate change, for example. When you get more capital, agency, and decision making into women’s hands, they are better stewards of environmental stability. [LINK: https://womendeliver.org/investment/invest-women-tackle-climate-change-conserve-environment/] And although there are many brilliant women working on climate solutions, they tend to be undercapitalized compared to men. The climate crisis is so urgent – are we really prepared to bet on NOT backing women with solutions?
15. How are you leveraging your own commitment to influence and engage others?
If you are in an organisation rather than as an individual investor – how are you getting internal buy-in? How are you communicating externally?
This is not just my list. It’s a list that brings together the wisdom and expertise of many gender lens investors. There are a wealth of smart, passionate people writing and working on these issues. I follow so many. Just a few of my favorites to follow include Joy Anderson,Jackie VanderBrug, and dozens of others.
Follow me, here and on Twitter, to see more of who I follow. I’m writing and sharing resources all the time!
Further reading:
How to Invest in Girls and Young Women: Lessons From SPRING Accelerator (LinkedIn)
Gender Lens Investing: Bending the Arc of Finance for Women and Girls (Veris Wealth Partners)
Ready to start investing for a gender equitable world?
Join Suzanne Biegel and CASE Faculty Director Cathy Clark for Getting Gender Smart: Impact Investing with a Gender Lens, a 3-day intensive training September 9-11, 2019. Participants of our first Getting Gender Smart program in March were overwhelmingly positive about the content and format, and left the training with actionable next steps toward incorporating a gender lens into their personal and/or organization’s investment practice. Learn more about the course and register.