Although investment approaches are rapidly evolving, women are still underutilized as a force for sustainable development. They lack access to capital, market connections, and a wide range of resources necessary to improve their economic position. Closing the gap is not only a social imperative but also a key ingredient in fuelling economic growth.
Gender lens investing can be described as an investment approach that intentionally integrates gender-based factors across the investment process to better inform investment decisions and advance gender equality. It is rooted in the belief that socially responsible investing can address some of the systemic barriers women and girls face around the world, thereby unlocking economic value through their empowerment. Another way to think about it is using capital intentionally to achieve positive impacts on women and girls. Gender lens investing is, therefore, a framework by which investors can create real impact and do so in a substantial way.
It is, however, appropriate to ask why gender lens investing has the potential to change the economic and social landscape so dramatically.
Well, the inequalities between men’s and women’s access to capital become evident when investors examine the issue through a gender lens, thus gender lens investments can contribute to better access to finance for women owned businesses. Women led businesses can benefit from targeted capital from investors across the micro, small and medium, and high-growth sectors. The growth of women owned businesses is impossible without access to critical capital.
It’s also crucial to emphasize that investors with a gender lens invest in businesses that offer equal access to employment opportunities and growth opportunities for women across business segments, hierarchies, and in leadership and board positions. In this way, women have equal access to employment opportunities.
By putting women in the driver’s seat as investors, gender lens investments recognize the importance of their investment decisions. Increasingly, women are making investment decisions. However, cultural norms and generational inequities in wealth and ownership of collateral assets mean that there are still fewer women investors. Gender-linked funding opportunities can help to change this. In addition, more diverse groups of investors are also more likely to invest in women-owned businesses and in companies that promote women focused products and services.
In the quest to alleviate poverty and reduce gender inequality, gender lens investing can serve as a useful strategy. As a result, it places a lot of emphasis on products and services that benefit women. Particularly in areas where women have traditionally been responsible for providing water, sanitation, and healthcare services, this is particularly true. In order to achieve scale, gender lens investors work with incubator hubs, co-design products and services with people who need them, and employ sustainable business models.
There has been a slow and steady discovery on the part of the business and investment world that diversity, gender parity, quality of life, and so on are not just empty buzzwords to throw around. The attainment of gender equality is a requirement for a prosperous and sustainable world as it affects all aspects of economic development and social progress in a positive way. It is also worth noting that gender inequality is one of the main causes of poverty and one of the most prevalent forms of discrimination. Due to the complexity of this issue, addressing it should be a top priority, especially for investors with a sustainability mandate.
Hassan Kitenda is an equity and fixed income analyst
Email; hkitenda@outlook.com
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