From Silos to Systems: An interview with Jenn Pryce

Calvert Impact Capital has taken a holistic approach to gender since they began investing debt capital 25 years ago. They’re currently influencing over a billion dollars, and invest in intermediaries, institutions, and impact funds in the United States and more than 100 countries around the globe. We spoke to CEO Jennifer Pryce about the shifts she’s seen in the field, and what she believes gender finance needs to become the new normal.

What are the biggest challenges at the moment with regards to deploying or influencing capital?

We've been doing gender lens investing since our founding, which is 25 years ago, and we look at gender across our entire portfolio. We use it as a lens, to see risk and opportunity more clearly and as a lever, to pull for greater social impact. Our approach is very nuanced and contextual; we try to meet our partners where they are and consider how we can help them improve on gender, whether they're the best or the weakest. It's dynamic; there's always room to improve.

A lot of our impact around gender and JEDI has been influencing fund managers to incorporate gender into the work they're doing as they invest their capital in communities. Our biggest challenge right now is that with the market so liquid, it has at times reduced our leverage in influencing the intermediary. Borrowers can find capital with similar economic terms from investors who don’t care about gender or impact. We saw this recently with a deal in the renewable energy sector, which tends to be more male-dominated. We asked for some consideration of gender diversity, and we were told "your capital's too challenging, we'll raise it from someone else, thank you", even though it had the same economic terms.  

Where do you think that resistance is coming from?

“there’s still a lot of work to be done; most people still don’t look at gender holistically, they carve out a portion of their portfolio that is dedicated to gender. But gender doesn’t sit in a silo. ”

I think it’s a misunderstanding of why considering gender is important in investing. We ask about gender because we believe it’s critical to understanding a business’s strategy and potential for success. We believe that, ultimately, incorporating gender considerations will create better financial outcomes, but borrowers don't always see that correlation. They're getting fine financial outcomes doing what they have always been doing, they think it’s too much extra work to start incorporating gender. There's no incentive to do anything different.

Are you noticing that as people's focus on climate (or other pressing themes like racial equity) gets more intense, they are sidelining gender rather than seeing them as integrated?

Yes, I have seen that some people are kind of "choosing", which is disappointing because it’s not an “either/or” situation. All of these issues are interconnected. It’s not  “I can care about either gender or I can care about climate” it’s a “both/and”.  This is where I think there's still a lot of work to be done; most people still don't look at gender holistically, they carve out a portion of their portfolio that is dedicated to gender. But gender doesn’t sit in a silo. It’s something that should be incorporated across your full portfolio because whether you’re aware of it or not, there is an impact.

How has the field evolved in recent years?

I think that, thanks to a lot of the work of GenderSmart and others, it is not an unfamiliar concept anymore. I used to go in a room and I'd have to explain what gender lens investing meant. I don't have to do that anymore, which is great. I also think that people are starting to coalesce around common frameworks and standards, whether it's the DFIs aligning with the 2X criteria or investors using IRIS gender metrics.

But I do want to note that even though people are more familiar with the term gender lens investing, the work itself is still very contextual. It's critical we empower people with tools and then let them get to the right outcomes appropriate to their context. "What does good look like?" is a very nuanced question that depends on location, sector, etc.

Do you have a sense about how long it will take before there's real scale of gender lens investing?

I've always believed all this work is a marathon, not a sprint and I think that incremental change can be very meaningful. For example, if you're a new fund, and you get a billion dollars of capital, you can invest all of that capital with a gender lens. But if you're an established fund, your capital is already committed and likely only 1-2% of it can be reinvested every year. I see a lot of that newly freed-up capital now being considered with either a climate, gender or other thematic lens. 1% or 2% of 100 trillion global assets under management is small, but still meaningful. It will build up.

“The capital is flowing into impact and into ESG funds; now we need the stewards of that capital to be more rigorous in how they’re putting it to work.”

What is needed to unlock more gender lens capital?

I see it being unlocked. I don't think there's an issue about unlocking more necessarily. The capital is flowing into impact and into ESG funds; now we need the stewards of that capital to be more rigorous in how they're putting it to work. I think the issue is getting people to stop thinking in binary terms - whether it’s in terms of impact (“I will focus on either gender or climate”) or returns (“I can either incorporate gender or I can earn better returns”).  Gender doesn't live in a silo and it’s a part of your investment whether you are aware of it or not.

Gender lens conversations also can’t sit in a silo; they need to be part of the larger dialogue around impact investing and ESG investing. We need to continue to emphasise that it's not a separate, special thing; it’s just a part of good investing.

I'd also like to see people thinking more systematically about how their capital is working. Where does an impact fund bridge to? What are we trying to demonstrate and change? [Deploying capital in a silo] won't fix the problems we have. If there's ever a time to think about setting up capital to work for systemic change, it is now.