Investment

Why invest with a gender lens? | Part 1 | Playbook: Investing in Gender Equality

Welcome to Playbook: Investing in Gender Equality, a six-part blog series that explores why and how an investment program is an essential part of the Equality Fund’s work to shift power to women, youth, girls and non-binary people around the world. Through the lens of six “P's" (Purpose, People and Partners, Perspectives, Process, Philosophy and Products), we will share our approach to gender-lens investing and illuminate the values, strategy, and structure that guide it.

Part 1: PURPOSE — Why invest with a gender lens?

By Bonnie Foley-Wong

At the Equality Fund, we are confident that a more equal world is within our reach—one in which all women, youth, girls, and non-binary people have the power and freedom to choose their own path and realize their own dreams. And we’re not alone.

Yet truly achieving gender equality will require a long-term effort. All across the world, women are vastly underrepresented in positions of power and are routinely excluded from decisions that shape the future of their lives and communities.

The Equality Fund’s investment program focuses on directing capital towards businesses that prioritize the perspectives and needs of women, and on how that can shift business behaviour and create economic prosperity.

Women-managed funds perform just as well as funds managed by their male counterparts, yet women manage only between one percent and three and a half percent of capital in the investment industry (including investment management, mutual, hedge, private equity, and venture capital funds).

In 2020, on average, women make $0.87 CAD for every dollar men make in Canada—and in the U.S., it’s only $0.81 USD.

Women-led and women-owned businesses are significant contributors to the global economy, yet are under-capitalized and under-resourced (for example, receiving only around four percent of U.S. small business loans, and just seven percent of venture capital).

Shifting this reality requires all of us to confront and transform the deepest economic, legal, and political barriers that limit the inherent potential of girls, women, and non-binary people everywhere. This will take sustained effort over generations—and it demands that we use every single tool in our toolbox to leverage and accelerate change.

That is why we are building a new model to support the work of feminist movements sustainably—one that combines the power of gender-lens investing, a bold contribution from the Government of Canada, and powerful, multi-sector philanthropy to unlock new capital for feminist movements—not just today but for lifetimes to come.

Together, these approaches help us to deliver on our primary mandate: supporting women’s rights organizations and feminist movements in the global South. Through a robust Grantmaking+ program, the Equality Fund will support feminist movements at every level, from individual organizations building collective power in their communities to coalitions creating change on the global stage.

Our investment program is an essential pillar supporting this grantmaking, both as a generator of financial resources and as a fundamental driver of gender equality in its own right. It does not simply fund our grantmaking, it shifts power alongside it. It is another lever for lasting change—one that is urgently needed to make gender equality a reality.

Leadership as an investor

In 2019, the Government of Canada announced a $300 million contribution to the Equality Fund Initiative—the largest single contribution ever made by a government in connection with feminist movements.

The purpose of the Equality Fund’s investment program is to guide the investment activities and the investment strategy for this contribution—in collaboration with our close partners Toronto Foundation and World University Service of Canada.

Our vision is to leverage this initial investment portfolio in ways that will mobilize additional private sector capital and drive lasting change toward gender equality in complementary ways:

  • Investment returns fund grantmaking and operations alongside the philanthropy program — Our investment program will build a long-term, sustainable source of funding for our grantmaking and operations. This will be supplemented by funds we raise through our ambitious philanthropy program.
  • Investment capital is invested with a gender lens — Through gender-lens investing, we will take gender data, analysis, and impacts into consideration when making investment decisions, with particular focus on increasing women’s access to capital; scaling products and services that benefit women, youth, girls, and non-binary people; and addressing structural inequality.
  • The Equality Fund leverages its influence as an investment strategist and asset holder — We will help to grow the field of gender-lens investing by mobilizing investors in the global North, influencing other participants in the investment ecosystem to apply a gender lens, and building local investment ecosystems in the global South.

And here’s the good news: momentum is on our side. Today, the total value of private capital invested with a gender lens is estimated to be more than $4.8B globally, up from $2.2B in 2018. And the growth of gender lens strategies for stocks and bonds (public markets) surpassed $3.4B at the end of 2019, rising from a total of $2.4B in 2018. That’s a market opportunity of over $8B globally, up from $4.6B in 2018.

Making money work twice for gender equality

When we launched the Equality Fund in 2019, we said that the world faced a historic moment in the fight for equality. With support for gender equality growing steadily across sectors, the opportunity for lasting, systemic change was huge—but could only be realized with bold solutions and more resources.

Our investment program is essential to meeting this potential. By fully leveraging our resources and influence, we will make money work for gender equality twice—first as it is invested, and then again as the returns are put to use by women’s rights organizations and feminist movements working to address inequality and injustice in communities around the world.

We can’t afford to sacrifice investment returns but, equally, we can’t afford to invest in a way that is at odds with our mission of advancing gender equality.

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UP NEXT — We will spotlight the People and Partners who make this ambitious investment program possible.

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