Module 2

Investors in Private Companies

Those investing in private companies are in many ways most well positioned to identify and address connections to GBV in their investments and portfolios. While this category of investors is diverse, encompassing a wide range of asset classes, vehicles, and approaches, those who invest in private companies generally have the power to obtain custom information about individual companies and, often, the influence to shape their practices.

Risk

How can those investing in private companies approach identifying and mitigating GBV risk?

As laid out in the first module, GBV both within and outside companies represents operational, reputational, regulatory, and political risks. Investors in private companies have the ability to identify and mitigate those risks in a variety of ways. Like the analysis of other types of risk, such as climate, GBV risk analysis will be most effective if integrated into the existing investment process. This includes:

  • Management: Ensure your team has the expertise to identify GBV risk and advise on how to integrate mitigation throughout the investment process. This might mean building internal capacity or identifying external experts with whom to partner.
  • Pipeline, Sourcing, and Diligence: Accurately analyzing GBV risk requires looking at both market and enterprise risk. Market risks might include looking at patterns of violence in a geography and sector. Enterprise risks include looking at company-level policies, practices, and norms that might affect the incidence of violence and the experience of survivors in the workplace.
  • Structuring, Management, and Monitoring: Mitigating identified risks might mean influencing company-level policies and practices, providing support and incentives for the adoption of good practices, and measuring progress towards better practices.
Opportunity

How can those investing in private companies incorporate a GBV lens into their assessment of investing opportunities?

Incorporating a GBV lens into fundamental assessment of opportunities can reveal both more possible investments and better ways to make investments. 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 intersect with the investor’s thesis and criteria?
  • Enterprise: What patterns of GBV might be affecting a company’s employees and/or the use of its products/services? Are there ways to approach the investment that respond to those patterns in a way that unlocks social as well as financial value?
Impact

How can investors who want to have a positive impact on GBV approach it?

Those looking to use investment capital to address GBV can ensure that their investment thesis and processes accurately reflect contextual dynamics of gender, violence, and power. Working with gender and GBV experts can ensure that investments reach the intended communities and do not result in unintended consequences.  

Investors who are investing with a different impact lens can also considering whether incorporating an analysis of GBV patterns can help them better achieve their goals. GBV interacts with many other forms of marginalization. Solutions aimed at issues such as housing insecurity, financial inclusion, agricultural stewardship, and more can all benefit from an analysis of how violence impacts or results from targeted interventions.

Glossary

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a
Asset

This refers to anything that has economic value.

a
Asset classes

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.

g
Gender

A socially constructed category related to norms and expectations of people with different sex characteristics.

g
Gender identity

A person's internal understanding and experience of their own gender.

g
Gender lens investing

Incorporating a gender analysis into financial analysis in order to get to better outcomes.

g
Gender norms

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.

g
Gender-based violence (GBV)

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.

i
Impact investing

Investments made with the intention of generating positive social and/or environmental return alongside financial returns.

i
Intersectionality

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.

l
LGBTIQ+

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.

m
Materiality

This term refers to any factor that is deemed relevant in terms of affecting a company’s performance.

n
Non-binary

People whose gender identity does not conform to a male-female binary.

o
Opportunity

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.

p
Portfolio

The collection of assets owned by an investor or fund, often comprising of multiple asset classes.

p
Power

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.  

r
Risk

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.

s
SOGIESC

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.

s
Sex

The physical characteristics with which a person is born, such as anatomy and chromosomes.

s
Sexuality

How people experience sexual and romantic attraction, including sexual orientation.

v
Valuation

The process of predicting a company or other asset’s future value based on analyzing its current assets, potential for growth, and possible risks.