November 2018

Gender Lens Investing: Why Empowering Women Matters Now

On October 15, at the iconic National Museum of Women in the Arts in Washington, D.C., Tiedemann Advisors held an event with Criterion Institute to discuss the future of gender lens investing. A point that was emphasized throughout the discussion was that gender is not a discrete theme nor a vertical; it represents power dynamics, risks and opportunities that permeate all investment activity. Opportunities today include supporting the increase of women in leadership roles, within corporate America or investing in companies in Emerging Markets which offer products and services for disadvantaged women and girls. In light of these dynamics, how are we integrating gender considerations throughout the investment analysis process to get to better investment decisions?

I had the pleasure of interviewing Joy Anderson, a historian and gender lens expert, who also took questions from the audience, which included gender specialists, investors, and a few political appointees focused on gender and international development. Joy has helped many impact investors consider gender dynamics in their investment practices and has also presented to our team in the past.

The audience asked questions such as:

  • How do we make the business case for Gender Lens investing? And is the business case necessary?
  • How do we ensure this conversation matters as much to men as it does to women?
  • How do we scale this movement to mainstream, without “pink washing”?

Women are more than half the global population, and yet they hold much less economic and political power than men. Women make 83 cents on the dollar compared to men in the U.S., and 57 cents on the dollar globally. Less than 5% of Fortune 500 CEOs are women, though women represent 58% of the U.S. labor force. According to the UN, 35% of women worldwide have experienced either physical and/or sexual violence. And while the #MeToo movement has become viral, vulnerable laborers in sectors such as service and agriculture continue to experience high rates of sexual harassment and assault.

While the gender gap figures are sobering, even in 2018, it is important to focus on two main arguments that highlight the importance of gender lens investing: the huge missed opportunity for wealth creation and the incredible risks we are ignoring in traditional financial analysis. For example, analysts will often consider climate risks, but will not consider the risks presented by gender-based violence or gendered power dynamics in their investment decisions, even though these dynamics have negative economic and financial impact. There are inherent risks embedded in gender-based violence, as it is correlated with decreased productivity of companies and, at a national level, political instability. On the wealth-creation side, gender represents the greatest opportunity cost of all, for both women and men. Excluding women from positions of power or certain labor markets, ignoring gender dynamics or excluding women from access to capital means less economic growth for all. We can project, based on the World Economic Forum Gender Gap report, that closing the gender gap by only 25% could increase global GDP by US$5.3 trillion by 2025.

Joy left us with a sense of hope. What a fitting setting the National Museum of Women in the Arts was for that message. The gallery walls are covered with works by women fashioned over the course of five centuries. The true worth of women artists, long ignored and little valued, is finally being acknowledged after centuries of neglect.

In these times, when gender lens investing is on the rise —when it is having its moment—we need to invest in the future we believe in. In that future, gender, and the risks and opportunities its consideration uncovers, will become the norm in investing. And we’ll no longer ignore Half the Sky[1].

[1]Half the Sky is a book authored by NYT journalists Nicholas Kristof and Sheryl WuDunn, focused on Women’s rights. The title comes from the pithy statement from Mao Zedong, “Women hold up half the sky”.

Tiedemann Advisors (“Tiedemann”) is a SEC-registered investment advisor. Tiedemann makes no representation as to the performance metrics of any third-party organizations or the achievement of underlying impact goals. Where applicable, achievement or compliance with these metrics should be evaluated over the longer-term rather than any shorter time periods indicated.

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