InTheKnow: Gender lens investing

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on May 21, 2018 - May 27, 2018.
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Awareness of equal treatment, equity and opportunities for women is sweeping across many industries, including finance. One initiative to further increase awareness is gender lens investing, also known as investing for the “women effect”.

Some use gender lens investing and investing in women and girls interchangeably, while others use them as two separate frames of reference, explains The Women Effect, an information platform on gender lens investing.

The Global Impact Investing Network (GIIN) defines gender lens investing as investment strategies applied to a part of an allocation or to the entirety of an investment portfolio, which seek to measurably address gender disparities and/or examine gender dynamics to make better informed investment decisions.

Using the gender lens metrics, an investor seeks to achieve a positive women effect through the use of various “lenses” in their due diligence processes, investment decision-making, reviewing their portfolios or when acting as active shareholders, in valuing women in all parts of the value chain.

The Women Effect explains that gender lens investing does not mean leaving men and boys out of the entire investment process. On the contrary, it is an opportunity to de-risk an investment or portfolio by recognising women and girls as a market opportunity.

This may include investing in businesses that promote workplace equity and women leaders, investing in companies that offer products and services that benefit women and girls, investing in issues that disproportionately affect women and girls, or providing access to capital for women-owned or led businesses, states GIIN.

According to authors Joseph Quinlan and Jackie VanderBrug in Gender Lens Investing: Uncovering Opportunities for Growth, Returns, and Impact, as the field matures, three distinct gender-lens focuses have emerged — access to capital, workplace equity, and products and services.

Portfolios designed using these lenses may not mean having to move money from one asset to another or from one investment to another. Instead, it may mean keeping everything in place and just asking new questions, seeing patterns and valuing women in all parts of the value chain.

 

The difference it makes

Examining gender dynamics can help investors make better informed investment decisions, whether it is addressing gender issues as potential risks to an investment or leveraging market opportunities through new customers or product insights.

 

What are some examples?

Below are a few of the products and indices that employ gender lens investment metrics and strategies:

The UBS Global Gender Equality UCITS ETF, which tracks the Solactive Equileap Global Gender Equality 100 Leaders Index, is designed to track the top companies leading the field internationally in terms of gender equality.

The RBC Vision Women’s Leadership MSCI Canada Index ETF, which is a women-focused exchange-traded fund tracking Canadian companies that have demonstrated a commitment to gender diversity as part of their corporate social responsibility strategy.

The FTSE Women on Boards Leadership Index, which enables investors to have increased exposure to companies demonstrating gender diversity leadership at board level and strong social impact.

The Bloomberg Gender-Equality Index, which measures gender equality across internal company statistics, employee policies, external community support and engagement, and gender-conscious product offerings.

GIIN’s Gender Lens Investing Initiative, which explores the opportunities and challenges in building a compelling case for gender lens investing and scaling gender lens investing.