- Gender lens investing is a powerful approach to achieving gender parity in finance and investment.
- It involves investing in enterprises owned or run by women and those that encourage workplace equality.
- Gender lens investing has a wide range of goals, including closing the gender gap in investee and investor firms.
- Companies with diverse founders and gender-balanced leadership teams tend to outperform the market and earn higher returns.
- Gender lens investing presents opportunities to address funding gaps and promote gender equality in different regions and sectors.
- The COVID-19 pandemic has highlighted the need for gender lens investing to mitigate the rollback in progress for women in business.
- The Mennonite Economic Development Associates (MEDA) provides a successful example of gender lens investing through its Gender Equality Mainstreaming (GEM) Framework.
- Investors and businesses should seize the opportunity of gender lens investing to unlock the economic potential of women and improve overall financial outcomes.
Public perception of gender equality issues in finance and investment often leads to temporary outrage without meaningful change. Gender lens investing offers a solution to address these disparities. It goes beyond merely hiring more women and instead focuses on investing in enterprises that benefit women and girls from inception. By following this approach, investors can create real impact and improve financial outcomes while promoting workplace equality and economic opportunities for women.
Studies have consistently shown that companies with diverse founders, particularly when women are included from the beginning and hold influential positions, tend to outperform the market over the long term. Gender lens investing allows investors to tap into this potential and drive better returns while making a positive impact on gender equality.
Gender lens investing is not limited to a specific region or sector. It presents opportunities to close funding gaps and promote gender equality in various areas. For example, in Africa, women oversee only 6% of funds and have limited access to traditional funding paths, representing a $40 billion gap. Gender lens investing can help bridge this divide and support women-owned businesses in the region.
The COVID-19 pandemic has further emphasized the need for gender lens investing. Women have shouldered a disproportionate burden of domestic responsibilities during the pandemic, leading to a regression in the progress they had made in the business world. Gender lens investing can help reverse this trend and ensure that women are not left behind in the recovery process.
One successful example of gender lens investing is the Mennonite Economic Development Associates (MEDA), which utilizes the Gender Equality Mainstreaming (GEM) Framework. This framework helps companies assess their gender equality efforts and integrate them with other impact investment strategies, such as environmental, social, and governance (ESG) criteria. The GEM Framework can be scaled to accommodate firms and funds of all sizes and specializations.
It is crucial for the investment industry to recognize the economic potential of women and actively include them in decision-making and leadership roles. Gender lens investing provides an avenue for investors to unlock this potential and contribute to a more equitable and prosperous future.
