Gender lens investing: reshaping financial landscapes

Investment approach aiming at combining economic performance and positive impact for women


A report focused on advancing gender equality through impact investing and sustainable finance was released.  ‘Empowering women, building sustainable assets: Strengthening the depth of gender lens investing across asset classes’ was prepared by UN Women, in collaboration with Politecnico di Milano (TIRESIA project), Phenix Capital Group and Bocconi University – Axa Research Lab on Gender Equality.

The report explores the Gender Lens Investing (GLI) market through quantitative and qualitative analysis. The GLI approach places gender equality at the centre of investment decisions with the aim of reducing gender inequality through the strategic allocation of economic resources.

The report highlights the lack of consensus on the definition of equality and inclusion in the financial sphere, stressing the urgent need for better financial literacy. Improving financial education is a key step to incorporate gender issues into investment decisions.

Investors are increasingly aware of the importance of quantifying and reporting the impact of their investments, by adopting measurement practices that consider gender and equality issues, thus actively contributing to the success and positive impact of such initiatives.Top-down initiatives, including stricter regulations, are welcomed by the investment community, and foster the acceleration of gender and equality initiatives.

“We have not yet been able to make impact the main focus for financial institutions to generate value.” comments Mario Calderini, director of Tiresia.

The key findings of the report provide a detailed overview of the investment market targeting UN Sustainable Development Goal (SDG) 5, which promotes gender diversity. As of July 2023, invested capital reached the remarkable amount of USD 56 billion, reflecting the growing demand for SDG 5-related impact investment funds. Private equity is confirmed as the most mature impact strategy, as the asset class boasts the largest number of investment funds (41) and significant allocated capital. Investments in real assets – real estate and infrastructure – also saw an increase in initiatives in 2022, despite the limited number of funds.

This groundbreaking report not only reveals important findings, but also highlights the great contribution of Gender Lens Investing to society. By strategically allocating capital to address gender inequality, GLI offers a practical and potentially impactful solution to tackle the chronic underfunding of women’s empowerment and gender equality initiatives.As the world strives to achieve the ambitious goals set by the United Nations 2030 Agenda, this report proves the potential of Gender Lens Investing as a transformative force for positive change, breaking down barriers and paving the way for a more inclusive and fair future.

We have not yet been able to make impact the main focus for financial institutions to generate value.

“One of the most immediate reasons to explain why this has not happened is in the composition of the boards of large financial institutions: who was not sitting there? Women. I strongly believe that the impact revolution will depend on more inclusion, more women and more gender diversity in decision-making bodies.”

Diversity as a business opportunity

Respect for diversity as an important ethical issue, but also the inclusion of differences as a business lever. Cristina Rossi Lamastra, Professor of Business and Industrial Economics at the Politecnico di Milano Department of Management Engineering, has made diversity management one of her research subjects. Flanked by Mara Tanelli and Silvia Strada, professors with the Department of Electronics and Information at the Politecnico di Milano, and with the support of the linguist Cristina Mariotti, she is investigating the use of data analytic tools to reveal unconscious bias, gender stereotypes in corporate communications.

«Thanks to the Me Too movement, diversity management is an issue that has recently drawn the interest of the general public, but the theme has long been present in scientific literature, in business and academic contexts – the professor explains –. Recently we can say that there has also been an awareness of damages companies can incur from a lack of respect for diversity». The Me Too movement, born in the United States, has focused attention on a delicate issue on which our country, however, is lagging. «We are seeing different speeds in this movement – continues Rossi Lamastra –. The issue of male/female equality is deeply influenced by the culture and goes hand in hand with income, it’s accompanied by greater economic development and a more egalitarian culture based on the entry of women into the workforce».

In addition to gender, diversity management policies also involve other forms of diversity, an increasingly clear sign of our social changes. Or rather, we can say that gender equality isn’t related only to the man/woman relationship but can also touch on other dimensions. Think of LGBTs, for which inclusion policies have in turn become a subject, albeit more recently, of scientific literature. And then there’s the theme of the sum of diversity. Reporting the results of a recruiting test carried out in the United States, Cristina Rossi Lamastra highlights the penalization of women compared to men, but also coloured people compared to whites, leading to coloured women arriving last in rankings of inclusion.

«The problem of diversity management appears to be decidedly complex, as there is no scientific and universally accepted taxonomy for these policies – indicates the Politecnico professor –. But we can say that if you ignore a part of the population, in the case of women half, the relative slice of potential is neglected and the multiplicity of points of view is lost. You lose all the cognitive richness associated with diversity and some studies indicate that this can also lead to an economic loss. By now the scarce presence of women in company management is seen by everyone as a limit, but the problem of discrimination is more serious and urgent in those sectors in which we see it at all levels and not only in management, such as oil & gas, for example, where there’s a clear predominance of men».

But how can a company sensitive to this issue put into practice diversity management policies, which certainly can also benefit its public image? «First, the recruiting process can be improved, focusing on neutral communications and using blind auditions that don’t reveal the gender of candidates, especially in male dominated sectors – concludes Cristina Rossi Lamastra –. New technologies can be useful in this sense».

The issue also impacts Politecnico di Milano and its School of Management, which like most Italian universities, adheres to gender parity principles for university careers and the student population. The most acute problems are seen in areas like mathematics, science and technology, where the presence of women is far below that of men, and forums for discussion and debate have been created to develop mitigating actions.