Deepening gender-smart investing practices: ARISE and the Investors’ Working Group
How can gender finance reach its ultimate aim of advancing better gender, social, environmental and financial outcomes if gender expertise is not valued as much as business and financial outcomes?
The effort to seek an answer to that question led to ARISE - a three year project which stands for Advancing Research And Investment Standards for Equity. Funded by Global Affairs Canada, ARISE is led by a consortium of Criterion Institute, ANDE, and 2X Global and aims to accelerate the adoption of gender analysis and expertise within investments, and ultimately improve gender equality outcomes for women, girls and non-binary individuals in the Global South.
Currently, gender analysis and recommendations are not valued nor resourced at the same level as investment analysis and recommendations. For example, the first step in the investment process is usually to source and assess investable opportunities. Under the status quo, research on investable opportunities is done by investment professionals who have expertise on finance but very rarely on gender, or who lack understanding of gender dynamics in particular geographic contexts. Civil society organisations – who arguably have the clearest line of sight to the realities of the women and girls in their markets – are not even part of the investment conversations.
ARISE aims to improve gender analysis in investment process by:
Working with highly dedicated investors who are already doing the work and having them adopt standards that shift their power dynamics to be more equitable (e.g. diversifying their Investment Committee, including gender expertise and data in their decision making, asking rather than telling their investees what they need etc.).
Developing Standards of Practice that address power dynamics, thereby shifting the emphasis from focusing solely on quantitative outcomes to changing the actual process of how investments are done and how decisions are made.
Investing in the capacity of organisations who can translate between gender and finance, and who are committed to building the field of gender lens investing in a way that advances gender equality.
What is the Investor Working Group?
The Investor Working Group (IWG) supports the first goal of ARISE by engaging highly dedicated investors who are willing to question their own practices and critically, improve them accordingly through peer learning and reflections.
The IWG is an intimate peer group of 18 highly curated and dedicated asset owners who are committed to supporting the ARISE consortium to successfully achieve the shifts in the gender finance field we seek to make. They are ‘first-movers’ or early adopters - those ready and willing to refine their abilities and commitments to ask for better, not just more, and to improve the gender analysis in their investment processes and to do so in collaboration with a group of their peers.
The group supports the continued evolution of a system of global process standards in the field of gender-lens investing and serves as a peer-learning community, supporting the endorsement, socialisation and adoption of these best practices throughout the gender finance community. In doing so, the group champions an enabling environment where the voices of women’s rights organisations are heard and included in gender-lens investing initiatives and are able to drive buy-in for higher standards for the field.
The investors in the IWG have been committing to both asking the hard questions and doing the hard work needed to drive change in investing and advance the field of gender finance. Part of that has involved questioning the power dynamics within their own investment processes. That includes looking at who has decision making power within the process, whose terms and conditions are being valued and who is taking on which risk.
Some of the members have already asked themselves these questions, which has led them to develop alternative models and methods. These have included establishing co-leadership within the organisation; implementing due diligence processes that include a gender analysis and interrogating what information, knowledge and experience is valued. It has also seen them bring on staff in decision-making roles that represent the communities they are seeking to serve, and forge closer relationships with investees.
These actions lead investors to reprioritise their investee’s knowledge and expertise in their fields, listening more to their ideas and needs, instead of having them only tick all the financial boxes that serve the investor.
In addition, as leaders in the space, investor working group members are also asking for better from their peers by using their power in boardrooms, conferences and other peer spaces to speak up and demand more.
The investors in the IWG are great examples of how gender lens investing can shift investment processes if we choose to act differently and think out of the box. These are investors who are not just asking for better practices from their peers but most importantly, asking this of themselves.
If you’re also interested in asking for better and deeper standards when it comes to gender finance, we encourage you to explore and study some of the following resources.
To start your gender lens investing journey: www.2xglobal.org/new-to-gender-lens-investing
For more on the ARISE project: www.2xglobal.org/arise
