In 2015, Joy Anderson and Suzanne Biegel documented possibilities for upgrading your due diligence with a gender lens. Below is an excerpt from this work as well as a link to the white paper they drafted.
Definition: The core of gender lens investing is to incorporate gender analysis into financial analysis to make better decisions. This is not simply about pointing our investments at women, either as entrepreneurs or as consumers, it is about incorporating knowledge about how gender works in the world, into how we make financial decisions. This is not just about counting, identifying the sex of the entrepreneur, but is is about how gender informs what we value and therefore how we invest.
Purpose: This piece is a response to those who are asking how. They want to incorporate a gender lens into their investment processes, but want to know where to start, how to be methodical and get the most they can out of this approach. This piece will focus on direct investments, and lay out a framework based on Values, Relationships, and Processes that can be applied for upgrading due diligence with a gender lens.
Why this work: A gender lens doesn’t need to be just one more burdensome screen, instead it allows investors to see better, and smarter, make better decisions. A gender lens can help investors understand the key performance indicators for a business in order to mitigate risk, maximize upside, keep investment efficient, and social achieve impact. Gender lens investing does this in three ways:
1. Overcomes biases: The reality is that there is widespread bias that leads to women and girls being undervalued. If you see real value that others don’t, you will have a competitive advantage.
2. Reveals opportunities: Looking through a gender lens, opens up patterns of data that will let you see opportunities. For example, you might see women as decision-makers in consumer purchasing in way that is untapped potential for the company.
3. Reveals risks: Gender analysis also unveils risks that might have been hidden. For example, a lack of diversity can lead to long term blind spots in a company and decreased profitability.
Outcomes: This framework may lead to different sets of outcomes. Some of the approaches will provide a data point or two to inform the process, some will ensure that the system is working, providing another failsafe that you have looked at the right things, and some approaches will push at the core logic of the how you approach due diligence. In addition, the reality is that not all upgrades are instantly easier, there is always a learning curve. This piece begins to lay out a set of considerations that may overtime, shift how you make investment decisions. The framework is designed to be adapted to your own individual needs and interests, so pick and choose how you make use of these approaches.