Reflections on COVID-19: why gender finance is relevant, timely, impactful and important
By Suzanne Biegel
Taking stock of implications for the gender-smart investing community, and reimagining relevant roles for different actors in the ecosystem. Now more than ever it is time to put gender on the table in investment decisions.
This is a moment of deep reflection for some, and deep grief for many. Over the last few weeks we’ve taken stock of the many unforeseen impacts of the coronavirus pandemic - personal, professional, geopolitical - which have amplified existing inequity, and have been buoyed by women’s role in emerging solutions, whether as innovators, CEOs, or investors. This is an attempt to add our gender finance perspective to existing voices, and encourage those who are willing and able to act to do so in a way that works for all. If you’re reading this and not yet ready to engage, we have deep empathy and look forward to welcoming you back.
At a time when different actors within the system are kicking into emergency response mode, the gender-smart investing community is thinking about how we might use finance as a tool to solve some of these challenges. But in the face of such overwhelming crisis it can be difficult for individuals to make sense of where they fit into the ecosystem, what roles they can play, and their best path forward.
At a systems level, we found Deepa Iyer’s diagram of roles within a social change ecosystem (above) incredibly useful as a starting point. More on each role can be found on her Medium post
Beyond this, here are some initial thoughts on what some key players can consider or contribute, based on where they sit on the investment spectrum:
The gender lens investing landscape (Women Effect, 2016)
Individual Investors
Anyone investing in public markets is taking a hit. We’ve heard that many of you are in learning mode rather than in action mode (stay tuned for more insights from our recent listening tour), holding off from any new capital allocation. For some, however, this is a time to reassess the where and how of that allocation. Within public markets - are you following ESG and sustainable/responsible strategies with a strong gender lens? There are some voices in our community sharing their views. If you’re thinking beyond public markets, are there private companies or funds reaching the demographics you care about or funding equitable solutions? In the last weeks we’ve heard about timely and relevant gender-smart products and services, from those working on postal COVID test kits, to reusable sanitary products (“periods don't stop because of pandemics”, as our friends at The Case for Her say), and virtual mental health services. In short: if your calling is to have an impact with your investments, you could be having a much bigger impact right now.
“Women’s rights actors, development organisations, and gender experts should be present at decision making tables”
Civil Society, Social Justice and Gender Experts
Different voices should have a seat at the table in terms of how investment decisions are being made, and now is not the time to put that on hold. It’s our imperative and our opportunity to include those organisations who are working on this, such as Criterion Institute, the Equality Fund, ICRW, Value4Women, WEDO, WOCAN, and others. Now is the time to continue to engage voices that have been more peripheral, in gender lens investing. Women’s rights actors, development organisations, and gender experts should all be positioning themselves for maximum relevance in the context of COVID 19 financing but it is imperative that they are present at decision making tables.
Investment Banks
Banks will be looking at their own balance sheet, and the interests of their clients, and have a role to play in communicating the benefits and relevance of gender lens investing to those clients. They have networks and relationships with endowments, family trusts, high net worth individuals, and corporates that could be brought to bear in creative and impactful new partnerships. The Financing for MOMs initiative - a partnership between Merck for Mothers, DFC, and Credit Suisse - is a great example of an existing joint venture which aims to move $50m of capital towards child and maternal health. This is in addition to what some financial institutions are already doing around reduced interest rates and repayment holidays on products for entrepreneurs.
Corporates
It’s been great to see big companies stepping up in the midst of the crisis, from FMCGs to airlines. But there’s even more of an opportunity within the corporate gender lens investing conversation - whether supply chain or VC - which isn’t happening yet. For example, the companies who are now making hand sanitizer or masks have an opportunity to scrutinise where women are in that supply and value chain. Who's making it? Who's shipping it? Who's distributing it? Who's delivering it? Who's buying it? Where's the gender lens? And is there a gap in investment in those suppliers that needs addressing?
“Companies who are now making hand sanitiser or masks have an opportunity to scrutinise where women are in that supply and value chain.”
Foundations
Foundations are one of the most important actors in the system right now. They can think long-term, make independent decisions, and be flexible and strategic about the forms of capital they deploy, and in what combination. Their longstanding role as providers of first loss capital or guarantees that unlock further capital from other players is even more valuable in the current climate. They can also deploy different flavours of debt capital, equity, loan guarantees, grants, and more. Foundations have the power to say, “let’s not just get money out the door. Let’s make sure it’s tied to the impact that is needed.” And right now foundations can also support conveners and be connectors, they can fund new research to inform and influence decisions. They can help the rest of the field level up. And they can fund the media narrative.
“on average across the globe, public sector procurement from women-owned businesses is currently 1% and the reason for that is the same as it’s always been: those businesses are undercapitalised, underconnected, and under-resourced”
Gov/DFIs/public sector
If other investors are pausing or stopping altogether in the face of market uncertainty, public sector investment arms have both available cash and a mandate to step in. On the procurement side, there’s an opportunity to redress the gender imbalance in public supply chains. Consider that, on average across the globe, public sector procurement from women-owned businesses is currently 1% (source) and the reason for that is the same as it’s always been: those businesses are undercapitalised, underconnected, and under-resourced. As governments open up billions of dollars in COVID-relief financing facilities, who’s making sure there’s a gender lens? We’ll explore this in depth in a future post.
A Collaborative Path Forward
Aligning your individual identity as a systems change agent with the capacity and role of your organisation could help you start to see a path forward through the crisis. What kind of capital can you deploy, and what other resources do you have at your disposal? What are your barriers, constraints and opportunities? And, crucially, where can you work with others to reduce friction and duplication, and increase the likelihood of your strategies succeeding?
We recently conducted a listening tour of over 125 investors, fund managers, intermediaries, and entrepreneurs from around the world about their new realities, which we will share in coming weeks. We’re also working with others around our community to track COVID-19 relief investment funds with a gender lens, and more. If you haven’t already, please let us know about your work in this space and we’ll be sure to amplify it.
This is the power of being connected as a community. Imagine if we pooled our immense resources - from investment and beyond - to realise the power of women as leaders, entrepreneurs, innovators, and investors, and aim to redress the disproportionate impacts of the pandemic on women and marginalised communities. Thank you for leading the way.