Addressing SDG 5: How to incorporate gender into your investment strategy
December 19, 2017
Last week we hosted an event in Zurich called “Addressing SDG 5: How to incorporate gender into your investment strategy” during the GIIN European Investors Council meeting. At the event, we introduced a framework to help investors adopt a gender lens across asset classes. The event is part of a series of investor gatherings we’ll be organizing with support from Shell Foundation, an independent UK-based charity, with the ultimate goal of increasing the amount of money invested towards SDG 5: gender equality.
The United Nation’s SDGs (Sustainable Development Goals), are a call to action to “end poverty, protect the planet, and ensure prosperity for all.” There are 17 SDGs in total, and they highlight key challenges that deserve our concern and collaboration as a global community. They have also served as an organizing and rallying mechanism for investors. Achieving the SDGs by the target date of 2030 in the developing world and across the globe will require between $1–10 trillion in additional capital.
The issues the SDGs highlight are urgent, and the scale of capital needed is massive. If the impact investing community hopes to help mobilize much of this capital, we must start having a very different conversation about how we invest—and start having it now. That conversation begins with a fundamental shift in approach: away from a focus on what kind of investor you identify as (impact-first, financial-first, or something in between) and to a focus on what type of capital you have and the realities of what that capital can do.
If the impact investing community hopes to help mobilize much of this capital, we must start having a very different conversation about how we invest—and start having it now.
Why focus on type of capital? Because this, more than anything, practically defines the opportunities that are available to you to invest for impact. Not every problem can be addressed with investment capital; different types of capital have unique limits and advantages to the impact they can achieve. To achieve the SDGs, we will need to activate all types of capital, but we also need to appreciate that all capital can’t do all things. Public equity and philanthropic (grant) capital can tackle very different issues, at different depth and scale. To design an impact investing approach—meaning intentionally investing for positive social environmental outcomes as well as a financial return—whether to address gender equity or other issues, investors should begin with the following questions:
1. What kind of capital do I have? Debt or equity? In private or public markets? Philanthropic capital? All the above?
2. Where is it housed? This helps determine the legal, operating, and regulatory realities surrounding your capital. For example, if your money is advised in a large financial center, your financial advisor is subject to her firm’s rules. This may limit investment opportunities you have available to apply a gender lens to public markets or private opportunities that have been approved on the firm’s internal platform.
3. How much do I have? The size of your investable assets matters as well; if you are not an accredited investor, meaning that you do not meet certain levels of wealth, then your investment opportunities narrow. You may be mostly limited to public markets—mutual funds, ETFs or perhaps Notes. The opportunities available to you expand with the size of your investable assets.
This shift in approach forms the foundation of our framework. Once the market and type of capital to be invested is identified, the degree of agency an investor has to achieve gender outcomes and the different tactics to activate that agency become clear, and expectations for impact can be aligned appropriately.
Our framework is meant to help users understand where and how they can advocate productively for gender equity—whether they are a financial advisor or fund manager, a client or an individual investor. It offers a basic approach to gender lens investing that can be tailored to a user’s unique circumstances and goals.
The framework is not a value judgment or a prescription. It doesn’t assign value, but aims to help align expectations and enable partnership. It’s not perfect and it’s not final; this is a work in progress and one that we’ve built using the excellent research done to date in gender lens investing. We welcome your feedback to help make this a useful tool for investing more capital to create an equitable and sustainable world.
If you're interested in downloading the framework, please provide your name and email.