That is the key question that “gender lens investing” (“GLI”) puts in front of thoughtful investors as they review their portfolios and select new investments.
Do I hold investments that are channeling capital to women, whether in the U.S. or abroad? Is the mutual fund in my IRA screening companies for board diversity and gender equity in the workplace? Have I asked about the diversity of company ownership and management when I’ve selected investment managers?
Just as investors today are asking about the social impact of their investments on the environment, workers, consumers and society, so, too, are many seeking investments managed by women or that advance opportunities for women and girls.
A World of Opportunities
Each day, new research demonstrates the enormous, positive economic impact created by women and girls around the world. Their contributions range from women in emerging markets who repay loans at extraordinarily high rates, to Silicon Valley entrepreneurs successfully putting venture capital to work, to research showing companies with higher numbers of women in management outperform their peers.
Currently, the choice of investment vehicles that are specifically constructed with a gender lens is limited, but it grows as more investors understand its power and potential. In the meantime, Veris continues to cast a wide net to identify excellent opportunities that advance the following goals:
- Provide more access to capital for women
- Expand gender equity in the workplace and on corporate boards
- Increase the number of products and services that benefit women and girls
- Support firms that are led and/or majority-owned by women
- Create economic growth in the developing world by investing in women and girls
Our research has also identified a broad range of other opportunities. These include promissory notes, private investments, and public securities and mutual funds that help achieve one or more of the above goals.
A particular mutual fund, for example, may have strong governance screens that prioritize board diversity. A different fund might have a female portfolio manager, while another may channel microfinance dollars to women in Africa. The majority of these opportunities target competitive market returns, while others are by design below-market rate investments to increase the flow of capital to women.
Building better companies and communities entails shifting the flow of wealth to women and girls to help alleviate poverty, and increase women’s leadership and economic status. The financial and impact returns from investing in women are so compelling that using a gender lens should not be considered a “niche” approach.
Remarkably, these women-focused investing trends may be a “disruptive trend” on both sides of the investing perspective: Investors and Investments. As the huge shift of wealth continues toward women, financial organizations from foundations to advisors to companies are seeing women significantly more engaged. Women tend to care more about the social and environmental impact of their portfolios and they are integrating their values into the management of their wealth.
In short, the portfolios of all investors – institutions, families, man and women – would benefit from scanning the investing landscape with fresh eyes and a good question: “What about the women?”
Please check out Veris’ Thought Piece, Women, Wealth and Impact: Investing with a Gender Lens for more information.
The Veris Blog is written by a team of authors at Veris, including Patricia Farrar-Rivas and Luisamaria Ruiz Carlile. Please feel free to share with friends and on social media. Working together, we can address the world’s most pressing social and environmental problems by directing capital to investments that make a difference.