Rich data-set across 160 private market companies over 11 years and new practical guidance for investors make the case for investing with a gender lens
BETHESDA, Md., December 4, 2018 (Newswire.com) - Calvert Impact Capital, the mission-driven financial institution dedicated to creating a more equitable and sustainable world, today released a new report “Just Good Investing: Why gender matters to your portfolio and what you can do about it.” The Report, one of the few studies to date on the connection between gender and financial performance from a private market perspective, shows a strong relationship between gender-diverse leadership (senior management) and improved financial performance.
The Report includes an analysis of Calvert Impact Capital’s portfolio over 11 years and representing a cumulative $23 bn in assets that explores the link between gender diversity and financial performance as well as practical, straightforward guidance for investors on how to incorporate gender into investment strategies.
Too often gender-lens investing has been misunderstood as investing only in women-led businesses, but considering gender in the investment process is fundamental to every investor, not just those that have an explicit goal of getting capital to women leaders.
Jennifer Pryce, President and CEO
While the marketplace has seen a number of studies that show the advantages of incorporating a gender lens approach in public companies, private market data has been much more limited. Calvert Impact Capital’s portfolio analysis revealed that, on average, companies in the data sample with the highest percentage of women in leadership (senior management) and board positions outperformed those with the least. The analysis showed a strong relationship between women in leadership positions and financial performance, suggesting it could be a key leverage point for investors and businesses.
The quantitative study focused on examining women in senior management and governance positions, but Calvert Impact Capital emphasizes that gender’s impact is not limited to these areas.
“Too often gender-lens investing has been misunderstood as investing only in women-led businesses, but considering gender in the investment process is fundamental to every investor, not just those that have an explicit goal of getting capital to women leaders,” said Calvert Impact Capital President & CEO Jenn Pryce. “The Report shows that gender should be considered holistically in a company’s investment decisions. Gender isn’t something you can keep in a silo; it’s a dynamic that is at work across an entire portfolio, whether acknowledged or not. And most investors don’t. A gender-lens can deepen your understanding of potential investees by highlighting risk and opportunity that you might otherwise miss.”
Calvert Impact Capital’s work with one of its borrowers, which serves the off-grid renewable energy market in Sub-Saharan Africa, is emblematic of the potential of incorporating a gender lens offers for both investors and investees. In this case, Calvert Impact Capital’s request for gender-disaggregated client data was initially met with resistance, but it persuaded the borrower to understand their customer base in greater detail. Although most of their clients on paper were men, they realized women were often driving the decision to purchase and tweaked their sales process in response, with strong results.
The Report outlines three steps to develop a gender-inclusive investment process and provides tools to help investors get started. It emphasizes that there is no one, right way to do gender-lens investing. Strategies vary by type of capital, by the goals of the investor, and most importantly, by context. Calvert Impact Capital has adjusted its own underwriting and reporting to reflect the importance of gender (they share a due diligence framework in the report) and hopes to demonstrate the effectiveness of their strategy to other asset managers.
Pryce says, “This is what impact investing is about at its core: paying attention to what the traditional markets don’t, whether it’s gender dynamics, environmental impact or community benefit, and showing that there is long-term economic value in that.”
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Calvert Impact Capital invests to create a more equitable and sustainable world. Through our products and services, we raise capital from individual and institutional investors to finance intermediaries and funds that are investing in communities left out of traditional capital markets. During our 22-year history, we have mobilized over $2 billion of investor capital. Calvert Impact Capital has recently expanded our services to include loan syndications, where we originate, structure and administer loans for institutional and accredited investors seeking environmental and social impact. Since the launch, we have syndicated and/or administered more than $185 million of capital across ten transactions. More at www.calvertimpactcapital.org.
Source: Calvert Impact Capital