Launching our new Gender-Lens Investing Criteria
When structures we didn’t build hold us back, or don’t work for us: We move.
It’s a principle that guides every aspect of our work at the Equality Fund. And for feminists building a feminist fund, it means we are working together to move almost every system we encounter: from antiquated and colonial grantmaking systems to a patriarchal, top-down philanthropy system.
It’s especially true for the global financial ecosystem. Built on entrenched practices of exploitation and extraction, the financial system as we know it is outdated and harmful. It was designed to strip wealth—of all kinds—from the many to an ever-shrinking few at the top.
But a movement for change is growing. We are proud to join a community of feminist activists and innovators challenging the system from within. Together, we can help shift who makes decisions about capital, and where it flows. The result is more investments moving directly to women, girls, and trans people so that they can build their own sustainable and scalable futures according to their own visions. Learn more about why we invest from our recent post Let’s talk about feminists and investing.
Innovation is messy and unmapped, especially in such a complex ecosystem. But we also believe firmly that a window for meaningful change has opened. It all begins with practical tools that allow us, and many other investors who share feminist values, to make principled progress by disrupting our current systems one investment at a time.
Launching today: Equality Fund Gender-Lens Investing Criteria
That’s why we are so thrilled to launch our Equality Fund Gender-Lens Investing Criteria. The criteria are a set of investment screens to guide what we invest in and how. They create a streamlined way to analyze how investments work for—or against—women, girls, and trans people. We are using them—and now they can be used by other investors everywhere.
First, some context: How do we define gender-lens investing? For us, it refers to investing (for financial and social impact) with the intent to address gender equality issues or promote gender equity. In practice, it means taking into consideration the participation, needs, realities, and leadership of all genders, across all aspects of investment decision-making in an effort to address structural and systemic inequality.
The opportunity is huge. The total value of public equity and fixed income gender-lens investing funds accelerated to over $12 billion USD as of June 2021. And the growth of gender-lens strategies in the private markets is evidenced by more than 200 gender-lens investing offerings raising a combined $6 billion USD in 2021.
The need is real. As outlined in 2X Global’s State of the Field 2022, for example, women founders in the United States raised just 2 percent of all venture capital in 2021, a percentage that has remained stagnant since 2008. It’s an even more challenging picture for Black women, who receive less than 0.35 percent of all venture capital funding.
While the “why” behind gender-lens investing is clearer than ever, the “how” has often been more elusive. Some approaches have relied on surface metrics like women’s representation, without considering the way power is shaped by how you work, where you live, or how safe you feel. Other investors have said they lack enough information to get started at all.
That’s why we are proud to be part of a growing group of investors who are committed to moving further. This is our chance to build on a long history of feminist activism and innovation in gender-lens investing and drive even deeper change within capital markets. We hope that our new Gender-Lens Investing Criteria can offer one additional tool to help investors move to concrete action—with strong investment decision-making rooted in purpose, ethics, and integrity.
A growing toolkit for investors
The Criteria are just one tool in a body of work we are sharing publicly as we build a feminist investment program from the ground up. Last year, we were proud to share our investment theory of change, the North Star for the Equality Fund’s Investment program overall. Like the Criteria, it was the result of months of consultation with feminist movement leaders and gender-lens investing experts from all over the world.
Today, we are also sharing the Equality Fund’s Intersectional Investment Guidelines, the foundation upon which the Criteria are built. The Intersectional Investment Guidelines ensure that all of the Criteria are rooted in the pursuit of systems change, grounding each investment decision within our broader goals of disrupting the status quo and redistributing power. Working together, the Intersectional Investment Guidelines and GLI Criteria are designed to shift the gender-lens investing landscape as we know it. The Guidelines are an anchor to ground gender-lens investing in systemic change—including social, economic, and environmental justice—and the Criteria serve as an action tool to guide investment decisions, with the transparency and accountability we need to get there. Learn more.
How the Criteria were developed
We started by using best-in-class GLI frameworks, integrating robust impact methodology from the Global Impact Investing Network’s IRIS+ along with 2X Global’s 2X Challenge Criteria to help us consider a wide range of measurable gender-lens factors. Our Criteria build upon that solid foundation.
The new Criteria, created by the Equality Fund in consultation with RockCreek, our Outsourced Chief Investment Officer (OCIO), leverage the best of both our roles. As OCIO, RockCreek manages our asset allocation and the sourcing and selection of investments consistent with the Equality Fund’s Investment Pool mission. Our organizations combine investment rigor with deep experience in shifting power and resources to women, girls, and trans people.
As with every component of our investment work, consultation with feminist leaders is fundamental. In 2021, the draft Criteria were developed in consultation with our Investment Advisory Council, a diverse and dynamic group of investors, feminist activists, and women’s rights advocates who help ensure that feminist perspectives are incorporated across our investment activities. Their ideas, along with feedback from the Equality Fund Investment Committee and the Equality Fund Investment Sub-Committee, were all incorporated into the final Criteria we are sharing today.
How the Criteria will be implemented
RockCreek will use the Criteria to screen all of the investments in our private-market allocation, which has a target of approximately 35 percent of our full portfolio. The Criteria will also be applied to any net-new public-markets investment, and retroactively applied to existing investments over the next two years. In addition, Rock Creek will use the Criteria to enhance annual Impact Reporting, establishing portfolio-level benchmarks for our gender outcomes over the next several years.
Moving together
From the beginning, we envisioned and built the Criteria as a public resource to help catalyze action across the investment landscape. In particular, we’re focusing on investment decision makers: Those who own capital, deploy it, manage it, and steward it.
Watch this space: Now that we have formally launched the Criteria, we plan to carefully track their use across asset owners in many different contexts. As investors put these criteria into practice, we will be sharing stories of impact throughout 2023 and far beyond. It’s all part of our goal to mobilize new capital for women, girls, and trans people all around the world.
Our year of action
The year ahead is all about moving—and it will bring pivotal new opportunities to put all of this foundational work into action. Together, we can demonstrate the potent promise of gender-lens investing in real time, while sharing learning and opportunities along the way.
USE
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