05 Aug The FT reports that Investment Vehicles Focused on Women are Growing
“The business of business should not be about money,” writes Anita Roddick, founder of The Body Shop. “It should be about responsibility.”
This was how a report in Financial Times began this past week. The article, which discussed the increase in the number of ESG exchange-traded funds (ETFs) with a focus on gender diversity and inclusion, referenced a report from Veris Wealth Partners that found that assets in gender lens investing grew by 85% to $2.4bn over the past year. Veris projects this figure of assets in gender lens investing will grow to $20bn by 2023.
While SEAF operates in the private capital markets and does not invest in ETFs, we believe we still have a role to play in promoting gender equality through our investments. We recognize that females are generally undervalued and as a result, do not have equal access to capital. It therefore necessary for those with the means to demonstrate a commitment to gender equality, including but not limited to, providing pay equity, benefits and training, leadership positions, governance, and business processes.
There is no set definition of “gender lens investing,” but various industry leaders such as Catalyst At Large, a consultancy, defines it as “integrating gender-based factors into investment strategy and analysis in order to increase returns and move towards gender equality.” The Criterion Institute, a nonprofit think tank focused on social change, defines it as “the incorporation of gender analysis into the systems of investing to make better decisions.”
The increase in women’s wealth and influence, coupled with increasing research indicating gender diversity correlating with better performance, has bolstered a focus on gender balance in the workplace.
Equileap, for example, is a nonprofit that supports investors with data and indices to build financial products that advance gender equality in the workplace. The nonprofit has designed six new indices with a gender lens, working with partners such as Morningstar and UBS.
At SEAF, we firmly believe that companies with a gender balance are superior business performers. As we have worked to diversify our workplace – increasing the number of female representatives in senior management and on SEAF’s Global Investment Committee – we have also directed investment efforts to focus on empowering women.
SEAF’s gender strategy is to invest in companies in certain domains where gender bias is particularly present, such that they present good opportunities to invest and benefit women. We, in turn, create shared value for entrepreneurs, women, and investors by investing for women’s economic empowerment and gender equality. In 2018, we developed our own Gender Equality Scorecard © (GES), which we use to assess and promote gender equality in our investees. Suzanne Biegel, who is quoted in the FT article pushing indices to look beyond simply board composition for gender balance, served as a key partner to SEAF, along with the Criterion Institute, as we worked to develop the GES.
We are proud to be at the forefront of the impact investing community as it works to support gender equality and women’s economic empowerment.