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Posted on April 8, 2020 | Updated at 10AM

COVID-19: For Investors, Time to Double-Down on Gender Lens Investing

AML COVID-19 blog Post

By: Anne-Marie Lévesque, Head, Gender and Impact at FinDev Canada, and chair of the 2X Challenge Working Group

 

The COVID-19 pandemic is having, and will continue to have, deep and often devastating impacts on the medical, social, and economic lives of people globally. It is no exaggeration to say that the virus, in some way, will touch everyone in the world sooner or later. Those of us working in international development know that people living in the emerging economies of Latin America, Africa, and Asia will be particularly hard hit.

Observing the relentless progress of the virus and how it upends established norms, it is hard not to give in to panic and look beyond what may not always be visible to the eyes. Certainly, there is the immediate need to care for the ill and mitigate the most pressing economic impacts of the pandemic. Beyond that, there is also the opportunity to rethink much of what we’ve accepted in the past in order to chart a better response, and in doing so, a better way forward.

Consider the ways in which men and women will experience this crisis differently. While the virus shows no favourites, we know that the consequences of its spread will be unequally distributed and that women, especially those living in poverty, will bear the greatest burden. 

Previous epidemics have demonstrated how women suffer disproportionately from damage to their health, their families, and their communities. We saw what happened during SARS, MERS, Ebola, Zika, swine flu and other outbreaks, and we can expect little different this time.

A recent analysis by CARE stated that COVID-19 outbreaks in developing countries could have multiple negative impacts on women and girls, “including adverse effects on their education, food security and nutrition, health, livelihoods, and protection.”

Women make up more than two-thirds of the work force in the global health sector. As such, as reported in The Lancet in analyzing the 2014-16 Ebola crisis outbreak in West Africa, “gendered norms meant that women were more likely to be infected by the virus, given their predominant roles (…) as front-line health-care workers.”

Similarly, there are many more women than men working in lower-skilled and lower-paying jobs globally, often in the service sector or the agriculture and manufacturing industries. As such, they are among the first to see their employment ended during a crisis. Many are the sole wage-earners in their families; often they are single mothers with few, if any, savings. Their day-to-day existence is threatened immediately. The lack of universal social safety nets in many countries contributes to the insecurity women must face in case of layoffs or mass retrenchments.

When schools and daycare centres or nurseries are closed, or when older or extended family members become ill or need help, it is primarily women who are expected to stay at home as unpaid caregivers. This not only adds to their existing workload, it also puts them at greater risk of contracting an illness. For women living in abusive households, the restrictions brought by the virus on their freedom of movement increases their vulnerability to gender-based and intimate partner violence.   

In some countries, as a result of COVID-19, women will see funding for reproductive health or gender violence programmes reduced, or eliminated altogether, as scarce resources are reallocated to combat the pandemic. This will mean an increased risk of maternal or neonatal mortality, as well as a rise in the numbers of unwanted pregnancies, domestic abuse cases, or sexual assault incidents. Prolonged school closings also mean girls are more likely to drop out of school altogether, which is in turn associated with higher rates of early marriage and teen pregnancies.

The pandemic and its impact on economies and employment will forcibly lead to a reduction in women’s participation in the labour force. There will be a consequent reduction in decision-making power or authority women previously held  within their families, workplace, or local communities.

 

Leading role for the private sector – and investors

 

While we can reliably predict how COVID-19 will affect women more than men, we should not resign ourselves to complacency. On the contrary, this is exactly the time to re-examine the nature of gender relations across our social and economic infrastructures and seize the moment for a more equal distribution of resources, responsibilities, and power.

The private sector, which accounts for 90% of all jobs in developing economies, has a special responsibility to act. At FinDev Canada, we see our role as working closely with the private sector to marshal investments to developing countries and catalyze necessary changes that have lasting impact.

One of our strategic priorities is to advance gender equity and women’s economic empowerment. To that end, we take a gender lens approach to 100% of the investments we make. At the portfolio level, we evaluate all our transactions on their potential to drive gender inclusion and increase women’s access to economic opportunities. We aim for at least one of the following objectives: 
 

  • steer capital towards transactions with a high impact on women’s economic empowerment, and/or;
  • support client companies to become more gender inclusive. 

 

We know that investing in women’s economic empowerment is win-win. Studies have shown that a more gender-equal private sector correlates with better business performance and greater economic growth. On average, there is a 27% higher return on equity in women-owned and led businesses, and an 18% increase in sales.

We believe so much in what women’s economic empowerment can achieve that we joined other G7 development finance institutions in 2018 to launch the 2X Challenge, a commitment to invest and mobilize US $3 billion in business opportunities that will benefit women. The results so far are impressive, with notable investments in Danper ALV in Peru and Alitheia IDF across Africa.

Amidst the COVID-19 crisis, the 2X Challenge Working Group (which FinDev Canada has the privilege of chairing this year) and the Gender Finance Collaborative came together to propose clear recommendations for investors to apply a gender lens to their response to the pandemic.  In the rapid crisis response phase, this includes support (financial or advisory) for our existing investees, liquidity or working capital for financial institutions and intermediaries that use a gender lens, and proactive discussions around the gendered impacts of potential layoffs. The full statement is available on the 2X Challenge website.

Our work, and that of others, shows why it is smart to invest in women. We can only do that gainfully, however, if we change the way we think about investing. Gender inequality is not inevitable, and its entrenchment need not be another casualty of COVID-19. Rather, the time has come for bold action to avoid the mistakes of the past and create a different future.

This means considering gender dynamics in investment analyses and decision-making, and make sure we collect the right data. It means placing a gender lens not in a “nice-to-have” category but at the core of any strategic action, whether it deals with immediate crisis response or longer-term recovery efforts. In recent years, the private sector has shown momentum towards this, with benefit for all. Now, more than ever, that momentum must be maintained. 

Only when investing via a gender lens is mainstream practice will we be able to say that we didn’t just vanquish COVID-19, we also did so in a way that protected and improved the lives and opportunities of countless women and girls worldwide, not just in the short-term but forever.