Leverage Point
Data, Materiality and Analysis
How are actors approaching data and measurement, and is their analysis getting more sophisticated? What are they paying attention to now that they weren’t before?
Data and transparency - on both sides - are key catalysts in unlocking capital and shifting behaviours.
We have multiple iterations of the ‘State of the Field’ in this arena. The first involved counting women in leadership, or women borrowers, women-led businesses, or basic employment data.
The second iteration sought to tease out more nuance about which women were served and where, and how to measure impact for companies and investors as well as investees. This brought in intersectionality with race, ethnicity, class, geography, and different forms of marginalisation, looking at gender-differentiated data to understand the gaps between them.
The third iteration looks at power, rather than identity, and which changes to investors or investment process make the most difference. It also seeks to illustrate how paying attention to gender affects climate outcomes, health outcomes, and economic outcomes more broadly.
“We have more data than ever, and examples of excellent analysis, decision making, and outcomes, but sophisticated gender analysis across the value chain is not yet pervasive practice. We are also still learning about the causation and correlations of gender equity and other forms of inclusivity with business and social performance and financial returns. And we are still debating what matters – do we pay attention to inclusivity because it is the right thing to do, or because it’s better for business?
Some say that, because we don’t have enough evidence or consistent, reliable, timely data, that gender and inclusivity is not material. Others say - I have enough, let's get on with it. Until we start using what we do have, and continue to push for better data - collecting, analysing, and sharing evidence at a much more pervasive level - we are not going to move ahead. The good news is that several bold leaders are moving this agenda forward, and there is growing momentum“
GenderSmart View
Suzanne Biegel
Co-Founder
Growing standardisation and maturation of gender data collection
Investors and entrepreneurs are increasingly coalescing around standards for collecting and measuring data related to gender. On the private markets side, several mentioned the 2X Challenge as the go-to baseline for what needs to be tracked, and 2X is working hard to harmonise with GIIN Iris+, HIPSO, and OECD to avoid duplication of efforts. In public markets, Equileap, Bloomberg, and MSCI have defined the space. This shift is reflected in the awareness of fund managers, as well as a deepening fluency in which metrics are most critical for indicating impact and what sort of analysis can be conducted.
“A couple of years ago, asking to get gender-disaggregated data was a massive pull and push. Now it has been more easily incorporated.”
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“We are not just agreeing on the methodology and the actual indicators and how things are being captured, but also the understanding of the application of these indicators. The biggest change, I think, is there’s probably less question on the value of gender lens investing. It’s really now about the how.”
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“Now we can start to have deeper, more meaningful conversations about what GLI is. Perhaps the last few years was just to get the information out — that this is a solid sort of commercial case and now, we’re seeing more and more people try and do that.”
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We need to clarify what we mean by “gender lens investing”
It is clear that “counting women” is the floor, not the ceiling. The growing standardisation and maturation of gender-related data collection means that it is now possible — and increasingly critical — to have a much more nuanced conversation about what defines a gender lens, what it means to be a gender lens investor, and what constitutes a gender lens investment. Looking beyond the gender of the leadership team is an essential step.
“Gender [data] across the board is pretty accessible. There’s not a ton of challenge there. But things like race and ethnicity, sexual orientation, disability — the diversity of reporting across those demographics are very, very sporadic.”
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“An investor of ours was really interested in how non-binary gender was coming up in our reporting. And to be honest, it’s not… But the questions are starting to surface.”
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“The funds are primarily focused on gender at the organisational level — so ownership, management, employment, and the policies and practices that go around that. I see much less focus on women as customers, their products and services, and supply chain.”
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Regional data challenges abound, especially for global investors
Intersectionality creates a unique challenge for taking a more holistic approach to measuring gender-related impacts at a global level. In addition to regulatory differences around what data can be collected, the identities that lead to additional marginalisation vary based on the history and demographics of a particular region. There are also regions where data on certain asset classes is more readily collected.
Working with local partners who understand regional and cultural nuances is one approach - see more in Civil Society.
“An investor once told me, ‘Yeah, gender lens is important in Latin America. But you know, the whole racial thing, that’s just North America, and we don’t have any distinctions between races down here.’ Which is ludicrous if you look at the news. We hear that sometimes in Europe, from European countries, there’s no discrimination, but we have France where it’s illegal to count people by race, so does that mean that you have a problem or not? How would you know?”
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“There are some areas with a relatively skewed evidence base. For instance, in debt, most of the data comes from the developing world - for instance with small and medium sized enterprises or microfinance. I would like to see more research on mortgages in the US — who has a better repayment rate? And why do women tend to pay higher interest rates? Why do they have to go through more hurdles to get loans when in fact, they’re more reliable debt holders?”
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“How you define diversity outside of the US is different from how diversity is defined within the US. There are so many legal restrictions, more so even outside the US to sharing and disclosing data. And without that baseline, it’s really difficult to make investment decisions.”
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“There is a need to build up the toolkit and the skill set of the global investor who’s looking at going into non-Global North markets, to figure out how to navigate some of the extreme dynamism, how to build more trust, more risk appetite. Do you need a local partner that shows you how it’s done? Do you need to co-invest first before you go into capital? Do you need easier structures?”
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Beyond the Baseline
Helping companies and investors to see that more intelligence from having better gender data will result in better business decisions and outcomes is absolutely essential. From allocating funding, to setting expectations, to value creation activities, investors can support companies to collect, analyse, and use better data to assess both risk and opportunity.
The next generation of gender-related data standards and practices will benefit greatly from a more engaged and educated group of LPs and firms who see value beyond meeting minimum requirements. In addition, avoiding “pinkwashing” will take a new level of accountability by investors, companies, ratings agencies, and others. Criterion Institute is on the leading edge of reframing identity and looking at who has and does not have power (which also goes beyond the current state of data collection).
We also need to move to looking at more nuanced data: it’s not enough to know if a company or an infrastructure project created jobs, and for whom. Were those good jobs? If lending to women, were those loans fair?
“There was a time when LPs were pushing this, and then it just became like another checkbox, like ESG requirements And I was really hoping it wouldn’t become that. And so like, how do you make this not just a check-the-box exercise?”
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“A shift from analysing identity to analysing power is where we think you can get to a more intersectional lens without having data representation problems.”
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“It’s not the business’s job to set up a huge impact or monitoring and evaluation unit. I think that [investors] should fund more data collection, especially around the things that they care about.”
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“But I do see that the private investment funds that we’re in are getting better at really understanding not, as I mentioned, just counting women but really understanding the true impact that they’re having on the lives of the people that are being served through either access to financial services or access to health care.”
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“We need to move from an attribution to a contribution mindset. So how have we moved the needle on SDG 5? What have we done for women’s empowerment? I think it’s hard because attribution is what sort of pays the bills and fills the coffers and justifies the budget. But I think there’s a balance there that we haven’t really struck yet.”