March 11, 2012

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We treat a Gender Lens as a viewfinder that reveals opportunities for the world of investing. In this new space of Gender Lens Investing, we have already seen proven opportunities to hasten economic development, increase profitability, scale social impact, and cement lasting change.

To help structure the use of a Gender Lens in investing, we identified three distinct, but interconnected, Gender Lenses that are particularly relevant to the investing community. Analyzing investment decisions using these three lenses, Gender Lens investors can begin to assess the impact – positive, negative, or none at all – that potential investments have on women and girls.

Gender Equity in the Workplace

Whether in the upper management tiers of a Fortune 500 company or amongst field-workers in a South American rural farming cooperative, policies, training, and equality of opportunity can lead to more gender equitable workplaces. When approached effectively, strategies for creating more equitable workplaces improve women’s opportunities for professional security and advancement – which slowly serves to undo the unnecessary and often unfair gaps and imbalances between women and men in the economic sphere. An investor who looks to support women with this lens scrutinizes gender equity within workplaces, making investment decisions based on his/her findings or using shareholder power to influence internal policies. Two pioneers around this investment concept are the Pax Global Women’s Equality Fund and Root Capital. Pax funds public companies that adhere to a certain standard of gender equity in the workplace, and Root Capital recently launched a Gender Inclusion initiative to better understand and foster the positive impact its portfolio organizations have on the women they employ.

Access to Capital For Women

Decades of research has documented large gaps between women and men in accessing capital – from the ranks of household businesses seeking micro-lending to female entrepreneurs with scalable business models seeking venture funding. Whether this disparity derives from selection biases, process hurdles, or opting out, one canreasonably assume that the gap is systemically-driven/reinforced and leaning on both economic growth and innovation. Across funding models progress is being made and potential is being revealed around lessening the access to capital gender gap. For example, the angel investor network Golden Seeds provides seed capital to high-potential women entrepreneurs while Village Capital has disrupted traditional pitch approaches with its more democratic peer-review approach to capital disbursement – Both models have a common result: more women accessing capital than otherwise would.

Products & Services that Benefit Women

This lens encompasses a wide range of business models selling products that range from reproductive/maternal health innovations to daycare services, from water wheels to money management training. In general, investments revealed through this lens respond to a need, whether biologically or socially driven, that is particularly unique to female consumers. In meeting this need, these businesses improve the condition of women by both reducing burdens placed on women and empowering women - ultimately, fostering fuller social participation and productivity amongst the women of the world. Capital markets infused with a mechanism (such as a gender lens) to steer greater pools of capital towards these innovative business models, expand their scope and their impact.

Each of these lenses reveals a way in which the activities of an investment opportunity could have a positive impact on the lives of women and girls. Many business models will land in the overlap, satisfying more than one of the three criteria above. Of course, the global conditions of women and girls can be improved through various other activities, some of which may currently or in the future be a plausible and appropriate role for certain business models to play.

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