Gender Lens Investing: A Tool to Promote Gender Equality in the Investment Process

Gender lens investing (GLI) is gaining momentum as investors recognise the urgency to contribute to gender equality while evaluating investment opportunities.

Gender lens investing (GLI) has emerged as a critical tool for promoting gender equality throughout the investment process. While the world is gradually recognising the importance of the UN Agenda 2030, Sustainable Development Goal (SDG) 5 on Gender Equality has received less attention to date. However, we are now witnessing the financial world turning its focus to GLI as a means of advancing both financial objectives and the gender empowerment agenda.

For instance, the European Institute for Gender Equality has highlighted the substantial economic gains associated with promoting gender equality, which, according to recent estimates, could boost the European Union’s GDP by as much as 9.6%. This demonstrates the profound impact that gender equality initiatives can have on economic growth and prosperity.

The report “Empowering Women, Building Sustainable Assets” aims to examine the diverse landscape of GLI models and practices, while also addressing the challenges and contradictions they may pose to feminist agendas. The report emphasises the need to strengthen GLI in order to foster inclusive and sustainable development that prioritises the needs of women and, more broadly, of minorities with respect to access to finance.

The study, conducted by Politecnico di Milano’s Tiresia, Bocconi University’s AXA Research Lab on Gender Equality and Phenix Capital, provides valuable insights into the current state of GLI. Data reveals that only 17.2% of funds place gender equality at the heart of their strategies. It is therefore evident that greater attention should be paid to gender considerations within impact investing frameworks.

The interviews, conducted with 22 institutional investors from around the world, further illuminate the nuances of GLI practices and the challenges faced by financial providers. They also unveil the diversity of approaches characterising the GLI landscape, ranging from the use of gender issues as a risk mitigation approach to the strategic valorisation of such issues for the generation of social impact.

Delving deeper into the results, the report identifies the lack of a clear definition and, consequently, of unanimous awareness of this phenomenon. Unsurprisingly, the vagueness and opacity around the meaning of gender lens is making its adoption mostly unstructured and ineffective.

As the relevance of GLI has just started to emerge, enhanced measurement and transparency around its outcomes and impact are needed. Merely assessing financial performance is not enough to address the complex challenges of gender inequality. Rather, investors should combine financial results and impact measurement, with the aim of advancing gender equality and women’s empowerment.

While GLI has a clear potential to drive transformative change, evidence of its impact on gender equality remains largely anecdotal. As we move forward, it is essential to integrate gender issues more comprehensively into investment evaluation schemes. This means investors should move away from a performance-focused mindset and embrace one that leverages the use of finance to deliver systemic change. Accordingly, women’s economic empowerment should become an investment priority and come to encompass decent working conditions, work-life balance, equal pay and entrepreneurship opportunities. The willingness to finance initiatives that champion the role of women in traditionally male-dominated contexts is a key step to advocating an organisational change when it comes to entities demanding financial resources.

By elevating gender issues to a political level and adopting new investment approaches, GLI can become a cornerstone of sustainable development efforts. It offers investors an opportunity to align their financial interests with broader societal goals, ultimately creating a more equitable and prosperous future for all. More importantly, raising the attention to GLI is a joint effort that should involve policymakers, investors and target investees. Indeed, top-down incentives and regulatory mechanisms that preserve the integrity of gender issues in the mindset of financial investors may encourage target investees to raise the level of equality and women empowerment.

In these terms, the joint effort on GLI can help disseminate the culture of impact in the mainstream mechanisms of the financial markets and ensure that investment approaches are not reduced to a tick-box exercise on gender issues, but serve the purpose of equality.

보다 통합적이고 전체적인 접근 방식을 수용함으로써 경제 시스템은 금융 행위자의 자본을 활용하여 의미 있는 변화를 만들고 이전에 뒤처진 개인이 영향력이 중요한 새로운 세계 개발 시대의 주인공이 될 수 있도록 할 수 있습니다.

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