Integrated Investing

by Bonnie Foley-Wong

  9

  GENDER LENS INVESTING

  J O SS WHEDON, AN American screenwriter, director, and producer, best known as the creator of the television series Buffy the Vampire Slayer and Firefly , puts it best. When asked yet again why he writes strong women characters, he answered poignantly: because people still ask him that question.

  Rarely a day goes by that I don’t read about gender inequity or imbalance in the workplace, on boards, in the C-Suite and leadership positions in general, in STEM (science, technology, engineering, and math), amongst venture capitalists and angel investors, and in the media.

  We have organizations like Catalyst, which works with businesses and the professions to build inclusive environments and expand opportunities for women at work; the Representation Project, a not-for-profit organization that produced the film Miss Representation , documenting the negative portrayal of women in media; and the Everyday Sexism Project, which catalogues and shares through social media instances of sexism experienced by women on a day-to-day basis. But these barely scratch the surface of injustices constantly being perpetrated against women on a global scale.

  Some prominent news and media outlets have sections dedicated to women. The British national daily newspaper The Guardian has the Women’s Blog,1 online news and blog post aggregator Huffington Post has a Women section,2 and global speaking conference TED hosts an annual event, TEDW omen, specifically about the power of women and girls to be creators and change makers (incidentally, the two largest newspapers in the US , the Wall Street Journal and The New York Times , do not have dedicated sections focused on women’s issues, though the Wall Street Journal does have a Task Force for Women in the Economy). Canada has a federal government organization called Status of Women Canada that promotes equality for women and their full participation in the economic, social, and democratic life of Canada.

  In this chapter, I share with you my own experience of gender equity and inequity, explain what gender lens investing is, why it is important, and how you can use it. It is written from the perspective of being a woman in the context of investing and does not get into broader, more complex issues of gender.

  My Experience of Gender Equity and Inequity

  I remember huddling around a then-shiny new computer called PET in a small room in the basement of my elementary school in the early 1980s. I was eight or nine, and was learning how to code in an old programming language called BASIC . At the time, there was no such thing as a girls-only code camp. We had this opportunity to learn how to code because we were schoolchildren, and the technology and equipment were relatively new.

  I had an early experience of gender differences during Art Summer Camp in Toronto when I was twelve. Our group was taken on a field trip to the Art Gallery of Ontario, where a friend and I noticed the disproportionate number of paintings of nude women versus paintings of nude men. We asked our camp leader why this was the case. His reasoning was that the nude female form was considered more beautiful. It wasn’t an answer that my friend and I found satisfactory, but we left it at that.

  I attended high school between 1987 and 1992, and during that period I was oblivious to gender inequity. My primary focus was to learn as much as I could about the subject areas I was most interested in, and I believed that hard work and good grades, not my gender, were what mattered. I felt that the learning environment at my school was supportive; I don’t recall being treated any differently because I was a woman. My attitude and beliefs about gender equity continued in the five years after high school I spent at university.

  I graduated from university in 1997, armed with bachelor of mathematics and master of accounting degrees, and subsequently pursued my first career as a Chartered Accountant (a professional designation in Canada that is the equivalent of a Certified Professional Accountant in the US ) at one of the top four accounting firms in the world. It was then, in my first real place of employment, when I started to notice that things were not as equal as I had previously imagined. Although the proportions of men and women at entry- and middle-manager levels of the firm were roughly equal, most of the partners of the firm were men. I didn’t look deeper into the possible imbalances, such as earning gaps or equity in the type of work men and women in similar positions were doing, but I do know now that in 1998, working women in Ontario were earning 81% of what men earned.3

  In 1999, I relocated to London, England, and in 2003, I landed my first job in investment banking at a bank with German origins that was, at the time, the second-largest European real estate financier. It was my first foray into a male-dominated industry—real estate and investment banking. Out of eleven people, I was the only client-facing, front-office female staff member.

  In my second investment banking job, in the Structured Real Estate Capital team at a Dutch bank, out of a team of about forty-five people, there were only four women, only two of whom in senior positions.

  In both of these companies, women represented 9% of a client-facing workforce, even though women make up 50% of the global population.

  In 2011, I relocated to Vancouver to join the impact investing team of a major credit union in Canada. With its female CEO and a board of directors that was more than 50% women, the credit union was often cited as a leader in gender equity at the leadership level. The team I joined had three women (out of eight staff) who were client-facing and made deals. This 37.5% representation by women was a remarkable improvement over the 9% I had experienced in London, but over time, I noticed that in other departments of the credit union and at the senior management level, the majority of the decision-making or client-facing staff were men.

  One of the most striking things I noticed in Vancouver was how many supportive communities were focused on women. Never had I been invited to so many women-focused events and asked to join women-specific associations and networks.

  I was at a point in my career where I was no longer oblivious to gender inequity. I paid more attention to articles in the media and commentary from friends and colleagues about gender inequity, particularly in the technology sector, on boards of directors of companies, and in venture capital and the investment industry. I also started to make it a practice to look for the people, the leaders, and the organizations that were doing something to create and enable more gender diversity and equity. I reached a tipping point when I met people from Criterion Institute and learned about their Women Effect Investments initiative. From Joy Anderson, the president and founder of Criterion Institute, I learned a phrase that put words to the work I was about to embark upon: “gender lens investing.”

  What Is Gender Lens Investing?

  Gender lens investing means taking into consideration the participation, needs, realities, and leadership of both women and men when investing in businesses.

  It is more than just investing in women-led businesses and women entrepreneurs. Jackie VanderBrug, Senior Vice President at US Trust, a former managing director of Criterion Ventures, and a leading voice in gender lens investing, notes that a lens means the point(s) of view by which we can analyze investments.4 In their article in the Stanford Social Innovation Review , “The Rise of Gender Capitalism,” VanderBrug and her coauthor Sarah Kaplan, an associate professor of strategic management at the Rotman School of Management, University of Toronto, reference Criterion Institute’s Gender Handbooks for Investors.5 VanderBrug and Kaplan note that although gender lens investing is focused on the impact on women and girls, the movement uses the term “gender” to include both men and women in the discussion and solutions. The use of the term “gender” encourages participants in the movement to look at the roles, relationships, and expectations of men and women that have been defined and shaped by social constructs. We have to look more closely at how social, cultural, political, economic, and education systems have been designed and have evolved to reinforce such social constructs. Gender lens investing goes beyond just focusing on women and challenges these deeply embedded constructs and systems.6

  Crite
rion Institute, a not-for-profit research and advocacy organization based in Connecticut, is a leader in this field. It focuses on three main areas in the investment spectrum:

  Access to capital for women : How investment decisions, systems, and activities can direct capital toward women entrepreneurs and women-led businesses

  Gender equity in the workplace : Looking at how investment in companies with proactive and progressive policies promoting gender equity within the company as well as in their supply chains

  Products and services that benefit women and girls : Focusing on investment in businesses that develop and offer products and services to a primarily female customer segment and that conduct their business in a socially responsible way that also reflects gender equity principles and values7

  A gender lens in investing influences what kind of businesses and entrepreneurs you look for and how you evaluate them.

  With a gender lens, specifically when looking at gender equity in the workplace, you may be concerned about the underrepresentation of women in certain types of businesses and industries. For example, I’ve read pieces in Fast Company , Forbes , and the Washington Post about how few computer programmers and engineers in the workforce are women, and about girls-only computer code camps. Investors and potential investors interested in investing in the technology sector with a gender lens may want to look at businesses that approach the hiring and training of women engineers in a way that encourages their development and values their perspective and contribution.

  Increasing women’s access to capital means investing in women-led and co-led businesses. More women investors are investing alongside groups such as Golden Seeds, which encourages greater participation by women investors. Pique Fund models itself around gender lens investing and focuses on leadership diversity. In 2016, 80% of the capital in Pique Fund was from women, the investment committee and Board are women-led, and 100% of the portfolio companies are led by CEO s who are women.The evaluation methodology used by Pique Fund has a gender lens designed into it as well.

  Criterion Institute asks a number of good questions:

  Transportation : If we looked at transportation systems and businesses that provide transportation services (airlines, airports, car sharing) with a gender lens, would we have a different view on how those services are provided (focusing more on safety, for example)?

  Women’s films and royalty structures : How do you value slower-growth films appropriately and capture the benefits of lower risk?

  Reproductive health, women’s medical devices and services, pharmaceuticals, health care delivery : What services are available to women? Do products and services tend to be generic rather than women-specific?

  Big data : How do we value the risk of less than 1% of staff in big data being women?

  Consumer finance : How might consumer finance be different if we invested in businesses with a gender lens?

  In addition to the three primary investment objectives that Criterion Institute identifies, my gender lens is based on a hypothesis that more women providing capital positively impacts more women accessing capital. To me, gender lens investing also means improving the number of women who are investors or who make decisions about investing.

  In summary, my gender lens in investing is how I evaluate investments with respect to issues of access to resources, decision-making power, and equality from my perspective as a woman.

  Why Is Gender Lens Investing Important?

  Nearly one hundred years after women gained their right to vote and run for political office in the US ,8 we are still talking about and dealing with issues of gender inequity, sexism, and women’s rights. Conversations about women and equality range from the underrepresentation of women in certain industries, on boards, and in the C-Suite to the (mis)representation of women in the media to the lack of basic human rights for women in various countries across the globe.

  In 2006, Equality Now, a non-governmental organization founded in 1992 whose purpose is to work for the protection and promotion of the human rights of women and girls around the world, honored Joss Whedon for his work. In his thank-you speech he said that equality is not a concept or goal that we strive for, but rather that it is a necessity. He even compared equality to gravity—something fundamental to the existence of people on this planet. Whedon highlighted that the misogyny in almost every culture is not something that exists naturally in humankind. He made the clear statement that we all need equality. I couldn’t agree more with Whedon: gender equality is a necessity, essential to the existence, survival, and happiness of people and society.

  Gender lens investing is important because it is one of the ways we can effect change, level the playing field between men and women, and restore the balance in life.

  In 2012, I attended an intimate conference on gender lens investing hosted by Criterion Institute. At that conference, the founder and president Joy Anderson posed the questions, “Why does gender lens investing matter?” and “What is at stake?” My answer is that diversity is at stake. Our world’s survival and ability to thrive is at stake. We only have to turn to natural ecosystems to see evidence that diversity is important; without it, they cannot survive and thrive. Gender lens investing matters because it is one of the actions we can take to reverse the lack of gender equality and equity and restore diversity in our society and economy.

  Examples of Diversity in Nature and How Nature Thrives

  Diversity in the Temperate Rainforest: 9 Living in Vancouver places me close to the largest temperate rainforest on the planet. Observing just the plant life of the forest reveals a diverse ecosystem of living and dying flora, growing in layers of tall, medium, and low-growing and ground-loving vegetation. The tallest are the coniferous trees—most commonly, the Douglas fir, Sitka spruce, western red cedar, and western hemlock—which reach up to the sunlight at 130 to 280 feet. The next layer is made up of shrubs, such as wild currants, thimbleberries, and huckleberries, that enjoy sunlight filtered through the coniferous canopy. Below them grow shade-loving trees, such as dogwoods and vine maples. On the forest floor lie dead fir needles, twigs, leaves, and fallen trees covered by a bed of lichen, moss, grass, and smaller plants. Mushrooms and other fungi digest, process, and recycle the dying plant material, creating nutrient-rich soil that in turn feeds the layers of plant life looming above. It is a beautiful cycle, made possible by the diversity of vegetation in the forest’s ecosystem.

  Diversity in Animal Habitats: 10 Western parts of the US were once the natural habitat for wolves; in the 1800s, however, settlers expanded into these parts, tilling the land for agriculture and destroying the habitat the wolves’ natural prey needed to survive. When wolves began to prey on domestic livestock, humans began to poison, control, and eliminate them. Predator control was rampant. Wolves were locally extinct in Yellowstone Park for seventy years, up until the grey wolf was reintroduced to the park between 1994 and 1996. During the time they were absent from the park, the population of one of their prey, the elk, grew significantly because it had no natural predator. Despite human attempts to manage the elk population, they increased in number and destroyed much of the park’s vegetation through their unencumbered grazing.

  The reintroduction of the grey wolf not only affected the elk population directly through kills; it also changed the elk’s behavior and, in turn, changed the landscape of Yellowstone Park. The elk began avoiding areas where they would be at greater risk of becoming the wolves’ prey, such as the valleys, and those valleys began to regenerate with plant life and trees. With that came the return of birds and beavers. The beavers’ dam-building began to change the infrastructure of the park’s river systems, creating habitats for other animals, and the physical geography also changed as increased vegetation prevented soil erosion and stabilized the riverbanks.

  The wolves killed other predators in the park such as coyotes, the carcasses of which provided food to other animals, especially those that scavenged. The changes in numbers of other predators
increased the population of smaller animals like rabbits and mice, which in turn attracted hawks, weasels, and foxes. Bears thrived on scavenged food, feeding on smaller animals, wolf kills, and berries made possible by the increased plant life.

  The introduction of a small number of wolves changed the ecosystem of Yellowstone Park, making room for greater diversity and the possibility of a self-managed system that required less, not more, intervention by humans.

  The Connection Between Gender Lens Investing and Integrated Investing

  My experience of designing and developing this new, radical, integrated investment methodology happened in parallel with my exposure to the gender lens investing community and movement. This was no coincidence, as investing with a gender lens overlaps with many of the concepts and components of integrated investing.

  GENDER LENS INVESTING AND ACCESS TO ESSENTIAL RESOURCES

  One of the components of integrated investing is the impact concept of access to essential resources. The question of women and their level of access to resources has come up in news articles, research papers, conference topics, and in conversation for centuries, and continues today. This includes women’s right to vote and run for positions in government; the pay gap between women and men; the proportion of women in leadership positions in business and on boards; and the number of women investors as compared to men. The range of contexts include, but isn’t limited to, women accessing jobs, women entrepreneurs accessing capital to start or grow their businesses, women accessing the products and services they need, and women accessing the information they need to make decisions.

  By applying a gender lens, we can examine women’s access to essential resources. Investing with a gender lens means that our investment choices and actions can begin to influence and address any impairment or lack of access. We can choose to invest in businesses that improve women’s access to essential resources. The simple act of investing in a women-led or co-led business can in and of itself improve the women entrepreneurs’ access to capital.