Gender Lens Investing: What is it?

By: Grace Burns

As impact investing and ESG continue to gain traction in the world of financial services, investment professionals are turning to environmental, sociocultural, and political investments in order to be both profitable and satisfy shareholders. But amidst this trend, a forgotten demographic prevails: the representation of women’s equity in investment decisions and portfolios.

The dilemma of gender inequity is complex; it encompasses the inequality from a macroeconomic scale within wage discrepancies, and can be as macro as the gatekeeping of candidacy for women to earn executive positions of Fortune 500 companies. It’s solution is equally perplexing; but can be championed through certain investment strategies, known as gender lens investing.

Gender lens investing is defined by the Global Impact Investing Network as, “ a strategy or approach to investing that takes into consideration gender-based factors across the investment process to advance gender equality and better inform investment decisions”.

The practice has been adopted by various firms, including Veris Wealth Partners, Trillium Asset Management, and has been sponsored by firms as large as KPMG.

There is currently no specific framework for gender lens investing, but the premise can be linked to the United Nations’ Sustainable Development Goal #5, to, “Achieve gender equality and empower all women and girls".

A significant barrier to widespread implementation of the practice currently is the inherent discrepancy in female representation in the venture capital space; the predominant platform for cutting edge investment trends and strategies. Without women to advocate for the practice within venture capital, it is inhibited from becoming mainstream.

According to Capital Monitor, the COVID-19 pandemic has even further exacerbated gender inequality across the globe, making the implementation of gender-specific investments even more pressing.

“School closures and the positioning of women as primary caregivers has meant that they have been hit by job losses disproportionately…” wrote Capital Monitor, “...According to a July report from the International Labour Organisation (IOL), 4.2% of women’s employment was lost between 2019 and 2020 compared with 3% for men.”

The importance of gender transcends social justice obligations, however. Focusing on women is equivalent to focusing on profit.

According to Business for Social Responsibility, “...ignoring women as consumers, a group responsible for 70-80 percent of consumer decisions, means missing out on one-third of the world’s private wealth.”

Invest in women, to not only invest in a more equitable society, but to invest in tangible and currently unrealized growth.

Further Resources:

The Double X Economy: The Epic Potential of Women's Empowerment by Linda Scott

Gender Lens Investing: Uncovering Opportunities for Growth, Returns, and Impact

Book by Jackie VanderBrug and Joseph P. Quinlan

The Ariadne Podcast - Gender Lens Investing Series

Impact investing: due diligence with a gender lens – or, Where the women and girls are – by Suzanne Biegel

5 Powerful Ways to Use Your Purse to Help Women and Girls by Geri Stengel on Forbes