Why impact investors are turning to gender lens investing

Whether it’s a protest, a rally or an activism campaign, women’s rights are making headlines — and investors are taking note. Now, many are incorporating gender lens investing into their investment strategy.

Gender lens investing is an investment thesis that aims to transform the idea of an investment’s benefit to women into a practical, successful strategy. It integrates gender-based research and data into investment decisions with the goal of increasing financial return and driving gender equality.

This may look like investing in women-owned or led enterprises or ones that offer women’s products or investing in enterprises that promote workplace equality. Gender lens investment strategies may also include different approaches like creating vision or missions to address gender issues, a more inclusive workplace or gender-equitable management of performance.

Why invest in women?

Roughly one-third of investors explicitly target gender inequality as an impact theme and, on a global scale, private equity funds who use gender lens investing are deploying about $1.3 billion in capital.

Not to mention, companies who use this approach also benefit from better decision-making by a more diverse group of directors that include a larger representation of women.

Obviously, gender lens investing is working — yielding a high financial return for those who incorporate it into their investment strategies. And more investors are moving to adopt this profitable strategy.

But this approach is benefiting more than just the companies that utilize it. Through gender lens investing, more jobs are being created for women, their opinions are valued, and they receive better feminine products and care.

This, ultimately, is what fuels gender equality. It lays the foundation for women to have a louder voice in politics, business and the economy while supporting all human rights.

Sure, focusing on women helps women, but it also helps the global community. In fact, if women are employed at the same rate, in the same roles, with the same pay as men, the global economy could be between $12 trillion and $28 trillion larger by 2025.

This incredible increase could be due in part to the fact that, when women have financial control, they tend to put their money back into their community through local charities and child-rearing.

The future of gender lens investing

Moving forward, the quality and quantity of gender-related data will continue to expand, giving investors a new lens with which to view gender-related, in relation to making investment, decisions. And, if governments and societies retain focus on gender equality and women’s rights, gender lens investment initiatives will continue to proliferate.

At the current rate, it will be 108 years before the gender gap closes completely. Yet ending gender parity is vital if counties want to be able to compete in the future.

Investors, stakeholders and social leaders have the power to hasten this process if they choose to take bold action. And, those that act now will surely reap the benefits. Because investing in women is good for fiduciary return, diversification, economic growth and every human — children, adults and people of all genders.

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(Featured image by Sharon McCutcheon via Unsplash)

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