Gender Equity Investing

Penn’s New Guidebook Focuses on Improving the Lives of Women and Girls via Investing


A growing number of investors want to apply a so-called gender lens to their public equity investments, but the path to building a portfolio that creates impact for women and girls is not always clear. Now, new guidelines make gender-lens investing more accessible. The Center for High Impact Philanthropy (CHIP) at the University of Pennsylvania has recently published The XX Factor Guidebook, providing investors with insights and advice on finding relevant data, screening investments, and engaging companies to catalyze change along the CHIP framework’s five dimensions of gender equality.

Five Dimensions of Women’s Well-Being

The XX Factor framework’s five dimensions of women’s well-being can help gender-lens investors focus their efforts and evaluate outcomes. Each dimension represents a different aspect of women’s lives and has its own criteria and measurements that can be used to evaluate progress in that area. Forming a complete picture of women’s current well-being and future challenges requires taking all five dimensions into account.

  • Health. This dimension encompasses factors such as nutrition, access to safe drinking water, and the availability of mental healthcare. It also includes contributors to maternal health, like the presence of a skilled attendant at birth. Some measures of health outcomes are years lived with a disability and the maternal mortality ratio.
  • Education. This dimension considers whether girls are entitled to schooling under tuition-free, compulsory education policies and reflects whether there is sufficient school infrastructure and whether it’s safe for girls to attend school. Cultural attitudes toward gender roles and child marriage are also relevant to this dimension because they affect girls’ opportunities to pursue education. Educational attainment rates and literacy rates are two crucial measures of this dimension.
  • Economic empowerment. The economic empowerment dimension asks whether women are able to participate in the economy on an equal footing with men. Factors such as access to banking, internet access, and property rights promote economic empowerment—while discriminatory labor laws and cultural norms can hinder progress. Household wealth and control over household spending are both indicators of women’s economic empowerment.
  • Personal safety. This dimension is concerned with whether women are free from physical and sexual violence. Child marriage and harmful cultural attitudes toward women’s rights threaten personal safety, while economic empowerment and educational opportunities can make women safer. A pertinent measure within this dimension is the rate of women who were physically or sexually abused by an intimate partner in the past 12 months.
  • Legal rights. The legal rights dimension examines whether women have the same rights as men under the law. Indicators of legal rights include the proportion of women in the national parliament and the presence of quotas promoting women’s representation.

Because these five dimensions are interconnected, a shift in one area can have repercussions in other dimensions. For example, improved access to education can lead to women being better qualified for jobs and can thus contribute to workforce participation and economic empowerment.

Aligning Investments with the XX Factor Framework

For investors who want to apply a gender lens in public equity investments, CHIP recommends implementing a few key strategies to align portfolios with the XX Factor framework. The first is to screen investments based on their impact on women’s lives: Investors can choose to put assets toward companies that promote women’s well-being and avoid buying shares in companies that negatively affect women. Before taking any action, investors should be able to articulate the values they wish to support through their investments. Then they can use available data from Bloomberg’s Gender-Equality Index, Equileap’s Gender Scorecard, Thomson Reuters’s Diversity and Inclusion Index, MSCI indices, and other sources to evaluate potential investments.

The guidebook points to investment and wealth management firm Glenmede’s work with the Putney School in Vermont as an example of how an investment adviser can use this strategy to help clients align their portfolios. Glenmede met with members of the Putney community and clarified values and investment goals with the endowment trustees. Glenmede then created an Impact and Investment Policy Statement highlighting the school’s diversity and governance priorities and worked to match the portfolio with those values.

Another strategy is to hold investments that are not consistent with women’s well-being accountable and to advocate for change at those companies as a shareholder. Investors can collaborate with other engaged shareholders and organizations to draw attention to gender issues and to initiate conversations with public companies. Investors can also formally alert management to their concerns by submitting resolutions and voting with proxy ballots. The guidebook provides a list of resources for shareholder engagement, pointing investors to organizations like As You Sow, the Interfaith Center on Corporate Responsibility, and ShareAction, all of which have comprehensive websites featuring educational material about shareholder engagement, proxy voting guidelines, background information on specific issues, and opportunities to collaborate on shareholder advocacy.

With The XX Factor Guidebook as a resource, more gender-lens investors have a road map to follow as they work to improve the lives of women and girls through their investments.

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