DFIs
DFIs have deep experience in assessing social and environmental risks in the context of projects, including gender risks. Generally, however, this expertise sits on the Environmental & Social teams rather than with the investment risk assessment bodies, such as Investment Committees.
This section looks at the ways in which GBV is relevant to DFIs’ investments from the risk, opportunity, and impact lenses. It is intended both to demonstrate that GBV considerations can and should be incorporated into fundamental investment risk analysis as well as to lay out approaches for integrating that analysis into existing practices.
How can incorporating a GBV lens help DFIs mitigate different types of risk?
The four types of identified risk—operational, reputational, regulatory, and political—are all relevant to DFIs in the following ways:
- Operational: GBV against workers, whether at the project site or in home/society, translates into direct costs for companies associated with absenteeism, productivity, performance, turnover, litigation, insurance, and brand perception.
- Reputational: When GBV occurs in the context of a DFI’s investment, the risks of being associated with it can have financial implications (insurance, funding, etc.)
- Regulatory: Changes in regulations—or in the enforcement of regulations—related to GBV can put clients and projects at greater risk of scrutiny or non-compliance. Changes in laws or practices related to gender and culture, such as female ownership of businesses, can have significant impacts for how clients engage vendors and other partners.
- Political: Rates of GBV are a stronger indicator of state instability than commonly used measures. High levels of GBV in a country can indicate hidden instability, which can have implications depending on the duration of a project.
DFIs have the opportunity to restructure internal processes so that GBV risk assessment happens at the earliest stages of deal assessment alongside other material investment risks. This requires collaboration between credit/risk teams, environmental/social teams, and internal or external GBVH experts. Institutions will then be better equipped to support clients in gender action planning that incorporates considerations of GBV and provide technical assistance accordingly.
Incorporating a GBV lens into the assessment of opportunities can reveal possibilities for how clients approach vendor and partner selection. As in the case of identifying risk, incorporating a GBV lens into opportunity assessment can take place at the market and enterprise levels.
- Market: What patterns of GBV in the geography and/or sector might have implications for the landscape of investments? Does it affect labor patterns, the demographic of entrepreneurs, the demand for products/services, etc., in ways that might influence how the DFI provides guidance and technical assistance to clients?
- Client/Project: What patterns of GBV might be affecting a client or vendor’s employees and/or the surrounding community? Are there ways to approach the investment that respond to those patterns in a way that unlocks social as well as financial value?
How can DFIs target GBV as part of their current impact goals?
DFIs are uniquely positioned to invest in opportunities that actively address GBV by harnessing their ability to deploy catalytic concessional capital and risk-sharing mechanisms. DFIs can exercise their economic leverage by proactively investing in strategic sectors with an expressed intent to prevent and mitigate the effects of GBV. While this lens can be applied across investments, some of the sectors in which they frequently invest are primed for GBV reduction strategies, including agriculture, infrastructure, and financial services. The following module offers more details as to implementation.
Glossary
This refers to anything that has economic value.
Groupings of investments that exhibit some similar characteristics and are generally subject to the same regulations. Examples include equity (i.e., owning a portion of a company), commodities (basic goods, such as agricultural products, that can be transformed into other goods or services), and real estate.
A socially constructed category related to norms and expectations of people with different sex characteristics.
A person's internal understanding and experience of their own gender.
Incorporating a gender analysis into financial analysis in order to get to better outcomes.
The gender binary (male-female) influences what societies and cultures consider “normal” or acceptable. These relate to expectations regarding the behaviors, dress, appearance, and roles of women and men. Gender norms continue to dictate that anyone variant from what is deemed acceptable will experience discrimination and oppression at an individual and systemic level. Gender norms can contribute to power imbalances and gender inequality in the home, workplace, markets, and in society as a whole.
Any act of violence, that causes physical, sexual, or psychological harm or suffering to someone based on their gender. This definition encompasses all forms of violence that women and gender-diverse people experience (including physical, sexual, financial, emotional, and cultural violence). Gender-based violence is a violation of human rights and a life-threatening health and protection issue. It includes acts of violence, sexual harassment, and threats of harm or coercion in public or in private life, including in homes, workplaces, social contexts, on the street, in schools, or online by perpetrators either known or unknown to the victim-survivor.
Investments made with the intention of generating positive social and/or environmental return alongside financial returns.
Coined by the American law professor Kimberlé Crenshaw in 1989, this term signifies a lens through which to analyze how oppressions along multiple vectors – race, gender, class, sexuality, and more – interact to affect an individual's experience. This approach calls for analyzing oppression through a multitude of social, cultural, biological, and geopolitical factors.
This acronym stands for lesbian, gay, bisexual, trans, intersex, and queer, and the ‘+' signals inclusion of further identities and experiences not named in the acronym. Certain Global South scholars have argued that the acronym potentially imposes limits on identification not reflective of dynamic identities and experiences.
This term refers to any factor that is deemed relevant in terms of affecting a company’s performance.
People whose gender identity does not conform to a male-female binary.
An investment opportunity refers to a situation in which one can place money into an asset that has a chance to gain value in the future.
The collection of assets owned by an investor or fund, often comprising of multiple asset classes.
In the context of sociology and political science, this is defined as the capacity of an individual to lead, dominate, or otherwise influence the actions, beliefs, or behavior of others.
The chance that an investment's gains will differ from an expected outcome or return. In general, investment risks fall into two broad categories:
- Market risk: Risks that affect part or all of an economic market in which an investment is made. Examples include political risk, inflation risk, and currency risk.
- Unsystematic risk: Risk that affects a specific company or sector, such as changes in management, policies, or practices that affect employee performance, or new competition for a product or service.
This acronym stands for sexual orientation, gender identity and expression, and sex characteristics (the shorter SOGIE is also used). While not as widely popularized as the LGBTIQ+ acronym, some scholars argue that it is more representative of how gender and sexual identities are formed in different global contexts.
The physical characteristics with which a person is born, such as anatomy and chromosomes.
How people experience sexual and romantic attraction, including sexual orientation.
The process of predicting a company or other asset’s future value based on analyzing its current assets, potential for growth, and possible risks.