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Risks and Returns of Gender Investing

Suzanne Biegel, Kelly Northridge, and I hosted a (re)Value Gender session at Oxford Jam yesterday.  We were really pleased with the outcome, especially because the circumstances were rather different from what is envisioned by the methodology.

(re)Value Gender is a brainstorming exercise developed by Joy Anderson, founder of Criterion Institute, for the purpose of helping investors and financiers forge the mental connections between gender issues and financial instruments (and measures). Everyone I know who has sat through one of Joy’s sessions experiences (re)Value like a fresh wind blowing through your thoughts.  Pure exhilaration.


Suzanne’s group at Oxford Jam. Suzanne (left) is active t in the gender lens investing space and will speak on angel investing at Power Shift.


The concept, however, was really created for a panel of matched experts and not so much for a public application among randomly-assembled players. It takes time to go through the mental re-orientation that Joy provides plus work through whatever problem is presented as the brainstorm task.

At Oxford Jam, we had only an hour.  We had no idea how many people would show up. We had no clue as to what kind of expertise would be represented in the audience.  Since we were drawing our crowd from the Skoll World Forum for Social Entrepreneurship–which runs in parallel to Oxford Jam–we could guess that there would be people who knew something about entrepreneurship and social issues, but could not count on either gender or financial knowledge in the crowd.

We boiled the conceptual set-up down to the bare essentials:

Financial measures are really just a way of assigning value.  The discounts and ratings are purely a set of conventions and thus can be altered to engage with anything the community deems important.

Gender is something that finance has not engaged.  That is why it seems so strange to talk about them in the same breath.  But there is no reason that financial measures (and thus financial instruments) cannot be made to encompass gender issues, just as they have now encompassed environmental issues (which, ten years ago, was also thought odd).

We illustrated with a couple of Joy’s key examples for how this might be done, such as discounting the value of a firm for the known bias that comes from having a homogeneous leadership (e.g., all men at the top). An investor might “go long” on women as an investment strategy, just as one might “go long” on China or India–if the products and portfolios were available to do so.

We then set up the group task with a diagram adapted from Joy’s explanatory deck (you can download her (re)value deck here), in which three points of a triangle set the parameters for analysis:  a gender issue, a financial instrument, and a sector.

Kelly Northridge, a new Oxford doctoral student who is focusing on gender lens investing for her dissertation, had spent hours distilling two examples into a graphic treatment. One of them was the project she and Joy have been working on together, in which sex trafficking, city government, and municipal bonds are analyzed for their interrelationships.  The other was a fictionalized treatment of the Vodafone project I worked on this winter.


In the mobile technology example, a mobile operator (the “sector,” in this case) responds to a service provider’s global commitment–as a corporate social responsibility promise–to develop mobile apps that will serve the needs of women in the developing world. Three apps are suggested: one for health, one for education, and one for safety (see Vodafone “Connected Women” report for explanation and examples).  Any or all of these three would manifest success as reduced maternal mortality (the “gender” issue). (Efforts on behalf of women in health, education, and safety would have other felicitous outcomes, too, but we were trying to be focused, so we just put “maternal mortality” on the chart.)

In order to decide which of the three apps to invest in developing, the mobile operator would perform a standard calculation used to assess a proposed capital investment: Return on Investment or ROI (the “finance” box).  To calculate ROI, you must estimate costs for a project, then project the incomes expected from it, and lastly discount the cash flows by a rate that reflects the relative risk, as compared to other investment opportunities.  You do this because, regardless of your commitment to social good, you must protect your investors, who expect earnings.

In this case, the income would come from closing the gender gap in mobile phone ownership, which is substantial in developing countries–thus an important market opportunity.  You would have the costs of introducing the service, which might be increased by the need to market to females, but which might be reduced to the extent that schools, hospitals, or NGOs might partner with you to deliver a pro-social service.  You might need to discount at a higher rate because the local culture has some resistance to females owning mobile phones. We summarized each exercise into a key question that emerged from doing the analysis.  In this case, the question was whether there was a correlation between maternal mortality and ROI on mobile phone ownership.


Here is one of the questions for further research that our group pinned to the curtains at Oxford Jam.


An interesting point that Kelly observed is that when you arrive at the top of the triangle, where the risk of the investment points back up to “maternal mortality,” you are presented with the essential puzzle of the gender lens proposition. That is, the assessment of “risk” nearly always accommodates some notion of the stability of the local environment:  investors don’t like their cash in places that might fall tomorrow to some dictator, for instance.  “Maternal mortality” is actually a pretty good proxy for the risks inherent in the local environment.  You only find high levels of maternal mortality in very unstable places and, conversely, very stable localities have infinitesimal maternal mortality rates. Yet conventional measures of exogenous risk never look at this very powerful indicator.  Why not?

Well, indeed, why not?  That is the whole point of the (re)Value Gender exercise:  to turn your head and make you look into the blind spots that the gender system imposes on the economy.  These instances are what my students have coined “the invisible obvious”–those gender phenomena that are right in front of your face, but that you do not see because the system is so thoroughly naturalized.

We then gave each group a template of the sheet Kelly developed and assigned them to work on either “women’s entrepreneurship” or “girls’ education” as gender issues and either “energy” or “transportation” as sectors.  The groups worked enthusiatically and the feedback at the end was good.  The session ended right smack on time and we all three took a deep breath of relief.


During the past 24 hours, we have had lots of positive feedback from participants.  They say the exercise was  fun and challenging, that it opened their eyes.  They enjoyed being with a diverse group of practitioners to think this through. Some are already thinking:  how can we really design a financial tool in this vein and put it out to the market?

Organizations who wish to engage in a formal (re)Value Gender session can contact Criterion Institute.  We will be conducting several such sessions at Power Shift, this time led by Joy and her team.  Power Shift is by invitation, like the Skoll Forum, but we are open to folks who are active in the effort to empower women economically requesting invitations.  (You can do that by writing edward.david@sbs.ox.ac.uk.)  And, of course, you can join in the conversation by social media.  Joy’s twitter handle is @criterionvent and Suzanne’s is @zanne2.  Mine is @ProfLindaScott. We have been using “genderlensinvest” as the hashtag.

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