Impact investments are investments made with the goal of both a financial and a social return. In this series, we will be exploring different ways for funders to create an impact with their financial investments. Today, Kate Barrett, Project Manager for a new CHIP initiative, gives readers a preview of her team’s latest findings.
What project are you currently working on?
CHIP recently launched a multi-year project to explore how financial investments can be better aligned with social impact values and goals. Thanks to generous seed funding from Tara Health Foundation, and in partnership with the Wharton Social Impact Initiative, the first phase of this project focuses on investments in public equity (where investors can buy ownership in shares/stock of a company through a public market), and social impact for women and girls. Our research question is: what options are out there for investors who want to use their investments in public companies to not just earn a financial return, but also to help improve the lives of women and girls in some way? This work is related to an emerging field called Gender Lens Investing.
How can funders use a gender lens in impact investing?
A “gender lens” can be used in impact investing to identify investment opportunities that will have a positive impact on the lives of women and girls. This has generally been done through investing in businesses or models that provide access to capital for women; investing in businesses whose products or services benefit women and girls (e.g., a company that sells sanitary pads, especially to a hard-to-reach market); and investing in companies that promote equity in the workplace between males and females (e.g., through promotion/hiring of women into leadership positions, or a commitment to equal pay for equal work).
Approaches to Gender Lens Investing are also expanding into other areas, such as divesting from companies that operate in countries that don’t protect the rights of women, examining a company’s supply chain practices toward women, or pushing more women to be active investors themselves, in order to reduce gender bias in the world of finance.
What have you learned so far?
The world of Gender Lens Investing is still relatively small, and the immediately investable opportunities for investors today in public equity are quite limited, especially for those interested in broad social impact for women. However, the field is moving toward a more holistic gender approach in public equity, including attempts to develop financial tools that look at a wider set of investment criteria related to women (e.g., modeling criteria off of women’s issues highlighted in the UN’s Sustainable Development Goals). All of this points to increasing opportunities for funders to align their impact values with their public equity investments. I am hopeful that a scan of the Gender Lens Investing landscape for public equity will look quite different a few years from now, especially if our team at CHIP has anything to do with it!
What’s one thing you would want donors/investors to know?
It’s important for donors to know that there are ways to align your various kinds of investments with the social issues that you care about. If this is something that matters to you, you can take an active role in your investments – whether that means working with/talking to an advisor, or creating your own portfolio of (even small) investments that you believe could help make a difference (for example by supporting companies that are doing good things for people and the environment). It’s relatively easy to dip your toe into the world of impact investing, and people shouldn’t shy away from it.
What are some good resources for people interested in gender lens investing?
Our related white paper will be out later this spring, followed by an investor toolkit available on our website next year. In the meantime, here are some other helpful resources on the topic:
- The Women Effect website, which serves as a resource for information on Gender Lens Investing (e.g., what it is, why it matters, and how investors can practice it)
- The Criterion Institute’s website, which includes a list of resources on Gender Lens Investing, and also their report State of the Field of Gender Lens Investing, published in 2015
- The recent book, Gender Lens Investing: Uncovering Opportunities for Growth, Returns, and Impact, written by Jackie VanderBrug and Joseph P Quinlan from U.S. Trust
- Veris Wealth Partner’s short report: Women, Wealth & Impact: Investing with a Gender Lens 2.0 which includes a table of dedicated gender lens investment opportunities, by asset class
- Knowledge@Wharton’s interview about Gender Lens Investing with Jackie VanderBrug, Managing Director of Bank of America/U.S. Trust: http://knowledge.wharton.upenn.edu/article/gender-lens-investing/
Stay tuned for the rest of this series on impact investing. To receive emails when we post new blogs, sign up for our listserv.