How Gender Lens Investing Works for Both Business and Society

Monday, September 12, 2022

Performance Measurement & Improvement

Photo courtesy of the Shell Foundation

WDI’s two-year study on ‘gender smart’ business practices reveals benefits and costs

Gender lens investing isn’t just about gender equality. It’s also about business. In fact, if you ask many investors propelling these models forward, it’s firstly about business. The problem is, until now, it’s been hard to prove. Historically, investors have relied on anecdotes to demonstrate the power of this approach to investing.

In June 2019, with funding support from The International Development Research Centre (IDRC)  and USAID, six investors with more than $700 million in assets under management — the AlphaMundi Foundation, Acumen, AHL Venture Partners, Root Capital, SEAF, and Shell Foundation — launched the Gender-Smart Enterprise Assistance Research Coalition (G-SEARCh). The goal of the consortium was to conduct new research in the gender lens investing community, focused on post-investment support provided to small- and medium-sized enterprises (SMEs).

The research project aligns with the William Davidson Institute (WDI) at the University of Michigan’s mission to provide decision makers with the tools of commercial success, which leads to both economic and social progress. WDI participated in the consortium and studied the effects of a relatively new type of gender lens investing strategy: gender smart technical assistance (TA) activities. “There’s a gap in evidence and know-how that holds back other investors and funders from wanting to implement the different types of gender-smart TA engagements,” said Yaquta Kanchwala Fatehi, Program Manager for the Performance Measurement and Improvement team at WDI.

The G-SEARCh consortium recently published Business and Social Outcomes of Gender-Smart Technical Assistance Activities in Small and Medium Enterprises: Building the Evidence Base for Gender Lens Investing lays out the findings and lessons learned. It shares data compiled and case studies on companies that received TA support, conclusions and calls to action, and specific steps investors can take to build greater equality and bolster business results.

The Business Outcomes Of Gender Lens Investing

There’s more to gender lens investing than simply investing in women-owned or women-led businesses or gender-forward companies. New strategies include promoting gender diversity within the investment firm and implementing a gender lens to the investment cycle. An additional strategy is the design and implementation of gender-smart TA within portfolio companies. WDI’s work focused on the outcomes of embedding equality and inclusiveness across operations. WDI also considered the costs of implementing such TA activities.  (The data limitations preclude strong conclusions — most companies in the study could not provide in-depth cost information due to the burden of data collection and long-term outcomes could not be measured due to research time constraints). However, the data that were gathered suggest that there were benefits. Additionally, 86% of the companies continue to use the TAs even after the close of investor funding suggests the benefits outweigh the costs for the vast majority of companies.

The challenge and advantage of a TA strategy is that it needs to be customized for it to work effectively. An experience must closely match the profile, needs and goals of the organization. WDI studied the impacts of internal strategies, like HR policies and management mentoring programs, external strategies, such as marketing to more women, and a mix of both, such as stakeholder training and sex-dissaggregated data collection and analysis. Each activity led to a different result.

For example, in one WDI case study, a financial services company in Latin America found low utilization of its non-financial products by women. The firm responded by creating a targeted promotional program to share the benefits of a medical and dental assistance product with women clients. It developed social media messaging, completed credit officer training and sent out customized information. As a result, it saw an 8% increase in women using this product.

TA activities also can enhance brand loyalty, improve workplace culture, push for formalized commitments to gender equality, increase sales numbers, and attract new funding. It largely depends on objectives, impact pathways and implementation strategies, Fatehi said. In the 21 small and medium enterprises (SMEs) studied by WDI, 86% of the organizations reported improved brand loyalty from customers and external partners and 38% reported higher sales numbers after utilizing these tools.

Businesses are excited about the investment opportunities that come from participation. “We talk about this program with potential funders and investors,” reported one SME management team. “They are keen to hear that we are promoting gender-transformative learning and development programs, which is definitely a step in the right direction in terms of their confidence in investing in us.”

The Social Outcomes of Gender Lens Investing

While business boosts rank high in the reasoning for pursuing gender lens investing and TA activities, there are compelling social effects that follow these economic benefits. Of the 21 companies in the sample, 71% of SMEs reported increased pride for the company among its stakeholders (customers, producers, distributors and/or employees); 67% of SMEs reported increased skills and knowledge among their stakeholders.

Through TA programming, Nova Coffee, a company in Rwanda that sources its coffee from small-scale local farmers, decided to make significant efforts to train women coffee farmers on mitigating and adapting to climate change effects. With those offerings, over 90% of the 120 women farmers surveyed in the case study gained access to critical agricultural training. There also was a major shift in how they interacted with climate change.

Before the sessions, 49% believed climate change rarely impacted their farming and 77% were taking no steps to change their practices. After the program, 96% of the farmers changed their farming practices around climate change. With another similar coffee company in the region, as it became clearer that women could participate in the local coffee production industry with their improved abilities, child marriage in the area began to drop. The impacts of these efforts rippled through the lives of these women and their children.

“To help women farmers is to help the nation because women are detail-oriented in their business; they take care of their children and community, and more so than the men. When you give the money to women, they will use it on their families and help their families to be resilient,” a Nova Coffee representative shared.

The Future of Gender Equality in Business

This study not only explored the potential power of gender-smart TA practices, it also compiled a list of best practices for TA implementers that would increase the probability of success, including:

  • Empower the company receiving the investment for TA activities to guide the process. “Trust your portfolio company,” said one SME management team. “That’s exactly what our investor did… They heard where we needed the most support and how we believed that support should be delivered.”
  • Leverage internal and external expertise from the start to contextualize the material to local cultural and gender norms. This customization is critical to improving women’s participation and minimizing resistance from male heads of households and male leaders in the community.
  • Integrate insights gained from TA implementation into other business functions and projects. Furthermore, sharing successes with other groups and investors could attract additional funding and increase support.


[Find more of these tips and insights in the full report, along with case studies, a toolkit and other resources.}

Despite the burgeoning  evidence, there’s a lot more room for study into this area. The research pool will benefit from a better understanding of the monetary and human resource costs, as well as the long-term impacts of the practice, said Fatehi. Such research would help to analyze the net benefits of TA and the correlations between business and social outcomes further highlighting possible benefits to the businesses’ profitability. This could then increase the likelihood and scale of adoption of gender-smart TA by other investors, funders and businesses.

“We haven’t answered every single question,” said Fatehi. “We’re just scratching the surface and giving people confidence that there can be social and business outcomes from well-designed gender- smart technical assistance when companies and investors implement and assess this strategy.”

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