Going Further and Thinking Big: Reflections from the 2022 GenderSmart Investing Summit
By Suzanne Biegel and Sana Kapadia
In October, GenderSmart brought together over 325 asset owners, institutional investors, fund managers, gender experts, and investment intermediaries, from over 40 countries, for our Global Investing Summit.
It was the first time since 2018 that our community had gathered in the same room together. The event was a space for vital action-oriented discussions about everything from climate finance, to gender data and analysis, the care economy, financial inclusion, agriculture and more, against a broader frame of moving gender-smart investing beyond silos and adopting systemic approaches to deploying capital across public and private markets.
Through dialogue-driven programming, delegates unpacked the barriers, solutions, and trends in the gender finance field, co-creating collective action and pathways to scale. We left with a sense of energy and optimism about the gender-smart solutions being created and scaled, the collaborations being seeded, and our collective capacity to do the work that needs to be done.
For those of you who weren’t able to make it, here are eight key takeaways for investors of all types, from myself and GenderSmart’s Head of Content, Sana Kapadia.
1. Gender-smart investing is smart investing.
The last few years have seen a shift away from gender as a discrete, siloed form of investment, and towards the use of gender analysis to make smarter decisions across every investment theme: from health, to climate, tech, supply chains, and more. We have gone beyond the why to the how, with more nuance across actor type and asset classes.
The upshot: You don’t have to lead with gender to be a gender lens investor. Gender-smart investing is just smart investing — and a vital tool in any investor’s toolbox to identify market risks, opportunities, and future-proof one’s portfolio across asset classes.
2. It’s time to think big.
There was a lot of talk at the Summit about leadership: what it looks like, and how we can build vehicles that meet the needs of both allocators and entrepreneurs.
Kshama Fernandes shared an inspiring story of how she developed Northern Arc, which has so far taken in and deployed $13B in capital, much of it from institutional investors. She shared that she heard “no” a lot at first, but that she remained confident in the market opportunity — she just came to understand that she had to build something scalable enough to take in serious capital. Other delegates talked about the importance of building funds not just around your own impact and investment interests, but where there is strong innovation and demand for capital from entrepreneurs. Finally, it’s also about embracing that we all have influence. The majority of us are all asset owners in some capacity and can be allocating our capital in a smarter way, with more precision and more impact.
For those of us who are building and leading investment vehicles, there is an opportunity to think about what we can create that is scalable, replicable, and can really tap into the needs of capital markets. Now is not the time to go back to only the familiar or stay in outdated mindsets, but to invest for a world that centres gender equality, sustainability and equity.
3. Inequality is a systemic risk.
As UBS’s Alice Page put it on the Day One of the Summit, “The economic argument for diversity is completely clear — it’s a commercial necessity.” When our investment teams, leadership, and investees don’t reflect the world around them, we miss out on vital market opportunities, and risk investing in products and services that don’t resonate with customer needs. We were so glad to be there with other commercial investors from Morgan Stanley and Citi to Rothschild and Co, EQT, Generation Investment Management, Hesta, Trillium, Robeco and more, sharing this frame.
It’s also a risk to our ability to address the crises facing our planet, such as climate change, COVID, and the care crisis, as solutions that don’t take into account the intelligence of the whole community risk being underutilised.
At present, women and people of colour manage just 1.4% of US AUM. It is essential that investors take meaningful action to diversify their investment pipelines and teams and to address systemic inequities in their capital allocation processes — see GenderSmart’s recent Justice, Equity, Diversity, and Inclusion Investment Toolkit for tools and information on how to do this. It is also essential that we talk to our clients about the gender- and other forms of diversity-smart investment options available, and that we have the right products on our platforms to meet the needs of an increasingly diverse (and diversity-sensitive) population of investors.
4. We have lots of data and need to get better at how we use it.
As Criterion Institute’s Joy Anderson has pointed out, there is more gender data out there than people — it’s just not always in the places that investors expect.
Gender-smart investors should be deploying data from government, public sector, and civil society databases, which are all rich repositories of gender data. We can also deepen our analysis of the data we have to move away from representation and towards power dynamics — for example, looking not just at the number of women on a company’s board, but who those women are, and the roles they fill, as well as retention and attrition rates, and decision making.
We also need to continue building the data demonstrating the relationship between gender and other forms of diversity, and financial performance outcomes, so that we can definitively make the case for the materiality of gender-smart investment.
5. We need more blended finance and fit for purpose capital.
We know that conventional VC and bank financing don’t meet the needs of the majority of businesses, regardless of the gender of the founder. To address this, a growing number of gender-smart fund managers and banks are innovating with new vehicle structures and types of capital.
But to bring these vehicles to scale and full impact, we need more capital behind them: whether that’s in the form of philanthropic actors who are prepared to put first loss capital into blended finance vehicles that enable more commercial actors to invest, or catalytic capital to fund the development of innovative, scalable financial models and solutions and the underpinning field-building that fosters this innovation.
If you’re able to be patient and are looking to create systemic impact, we hope that you are looking at these vehicles, with the potential to shift and reimagine our financial system.
6. Care economy is an opportunity and a key lever.
If you’re looking to use your investments to address the systemic roots of gender equality, the care economy is a big part of that.
Addressing the full spectrum of care work (paid and unpaid) is both essential to a functioning economy and systemically undervalued — largely because it has historically been done by women. By building the evidence base, amplifying what good looks like, reframing the narrative on how the care economy is viewed, valued and supported, and charting actionable investment pathways in the care economy we will be able to unlock the full potential of investment in this area.
Care is the key to unlocking so much of what gender-smart investors are working towards. You’re not going to unlock women in green jobs, women leading businesses, or women as investment leaders without a functioning care economy. Like roads, transportation, and energy, care is a vital piece of infrastructure that allows people to work, live, play, and learn.
7. Gender-smart investors need to sit at the policy table.
Voluntary action is a good start, but just like on climate and broader sustainability issues, achieving broad and systematic action on gender will require policy and regulatory mandates.
EQT’s Jen Braswell spoke about the role of policy and regulation in supporting change, arguing that as new standards such as SFDR are developed, and others by actors such as the TCFD, TNFD, and the ISSB, it is essential that gender and a broader diversity lens are fully integrated from the start. Follow or engage with the new TIFD as well, for more on this. This means gender-smart investors need to be in the rooms where policy decisions are being made, ensuring that gender-smart policies trickle down to public finance priorities.
We also need to be in the room where infrastructure decisions are being made. This is a moment where governments all over the world are investing billions of dollars into climate-smart transport, buildings, care infrastructure and energy. These are decisions whose consequences will play out for decades. For these projects to be a success, gender and diversity needs to be part of the conversation and design from the very start.
8. We need to engage the head and the heart.
Finally, we talked about how we could create the mindset shift necessary to truly scale and mainstream gender-smart investing.
We have to continue building the business case, yes. But just like on climate, there is also a moral case to be made about what is right and fair, which is just as important to the systemic shift we’re working to create as the processes, data, tools, and policies we’re building. We need to keep shifting and nuancing our language, framing and stories.
We need to keep illustrating in finer and more compelling detail the market opportunities of investing with a gender lens. But we also need to tell the stories of the garment workers whose lives are improved by gender-smart companies with fair wages and humane supply chains. We need to tell the stories of the women farmers who are able to sustain their livelihoods through fit-for-purpose capital. We need to tell the stories of the young women who want to learn about technology so that they can solve the big problems facing their communities. We need to inspire people to invest in the future of girls, and in fairness and justice for everybody.
As author Yuval Noah Harari put it in a recent podcast interview with Vox, “Just flooding people with facts and statistics and all that won’t get you very far. The only thing that really displaces one story is a better story.” So what are the stories we can tell that will really move investors on both the market and the moral case?