Julie Bishop | Palladium - Feb 12 2020
Impact Investors Can Deepen their Impact by Investing in Women

Julie Bishop, Former Australian Minister for Foreign Affairs

No nation can reach its full potential unless it harnesses the energy, ideas and intellect of all its citizens, including the 50% that are female. One of the best ways that governments the world over can grow their economies, build sustainable communities and lift standards of living is to empower women and girls. According to the United Nations, gender equality is key to unlocking many of the Sustainable Development Goals (SDGs), and women’s empowerment is an opportunity for nations to grow economically and socially.

Around the world, women are increasingly controlling consumer spending with a greater transfer of wealth to the hands of women. While some governments and large donors are driving the global agenda with a gender lens, current efforts are insufficient to achieve large-scale improvements.

The time is ripe for gender lens investing to play a greater role.

A Big Tent

"Gender lens investing" uses capital to deliver financial returns while improving the lives of women, girls, and their communities. When investors consider dimensions of gender in investment decisions, allocation of capital can be focused in the direction of inclusive interventions that promote and drive such an agenda. This is not limited to businesses that are owned or led by women. “Big tent” gender lens investing includes initiatives with 1) women as business owners; 2) women as business leaders (such as CEOs); 3) women as employees; 4) women as customers; and 5) women in the supply chain.

"Empowering women and girls is one of the fastest ways to reap social and economic dividends."

Palladium’s own investment effort, the Palladium Impact Fund I, uses gender as a core plank in its strategy. In the rural areas where it invests, it focuses on supporting those businesses that either have high female participation and/or that directly benefit women and girls.

One of the fund’s first investments provided debt financing to Naasakle, a majority female-owned company in Ghana that manufactures shea butter for the cosmetics industry. The investment bridged the gap between rural female nut pickers and global shea butter demand, supporting more than 5,000 women while generating a financial return and growing the business.

All Sectors Can Benefit

While investing in a women-owned company employing women nut pickers is a clear case, all sectors can benefit from a gender lens.

Infrastructure is traditionally seen as serving genders equally, and gender lens investing has been slow to enter this sector. However, there is scope to increase diversity in the design, planning, and construction phase of infrastructure projects, as women and men use and rely on public structures and systems in different ways around the world.

Studies have shown that in many places, women rely more on public transport and are often walking more than men. Women can also have more complex mobility patterns around cities due to their ‘double working day’, balancing their domestic duties with participation in the paid labour market. Women also have different needs in terms of safety and security, which can be improved by infrastructure and service delivery.

When the Liaoning China Urban Transport Project collected feedback from the public, they credited women with identifying the need to separate pedestrian walkways and market areas from animal-drawn cart lanes, which increased safety and reduced accidents. Women’s suggestions led to the addition of an off-ramp on a major road, provided access to local markets, reduced abandoned roadside buildings, and spearheaded the addition of new public transit routes to increase usage.

Breaking Out

Experts estimate a $2.5 trillion gap between current funding levels and what it will take to accomplish the UN's Sustainable Development Goals. Many investors are looking for ways to make a positive impact while generating returns. The world over, there are women breaking out of gender stereotypes to start and grow small businesses, often supported by micro-finance underwritten by aid funding.

I will always remember a meeting with women who grew coffee in the Papua New Guinea highlands. They felt greatly empowered after participating in business management training provided by the Australia Government and the World Bank. Empowering women and girls is one of the fastest ways to reap social and economic dividends; however, the private sector must do its part. Gender lens investing will help move capital to the places – and the people – where it can have the greatest impact.

Contact impact.investing@thepalladiumgroup.com to learn more.