Gender-lens investing doubles in a year

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By:
Helen Avery
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$2.4 billion in dedicated mandates; expectations to reach $20 billion to $30 billion by 2023.

Patricia-Farrar-Rivas-Veris-2018NEW-780
Patricia Farrar-Rivas, CEO of Veris Wealth Partners


Mandates dedicated to gender-lens investing have grown in just four years from $100 million to $2.4 billion globally, according to wealth management firm Veris Wealth Partners, with the number of strategies jumping from eight to 35.

From June 2017 to June 2018, more than $1 billion in assets was added.

“It’s been a year where we have had gender pay-gap revelations and sexual harassment scandals, but we’ve also had a great deal of positive momentum around capital being allocated to gender-lens strategies,” says Patricia Farrar-Rivas, CEO of Veris.

“We are realizing that one way to remedy these gender issues is by investing in women and business that support women.”

There are many reasons for the jump.

For one, larger investors have been committing to gender-lens investing: CalSTRS (California State Teachers’ Retirement System) seeded the State Street Global Advisors ‘SHE’ ETF with $250 million in 2016, and OMERS (Ontario Municipal Employees Retirement System) invested $100 million this year.

Greater awareness of the role of capital in progressing women’s rights and gender equity from movements such as #MeToo and the UN’s sustainable development goal No. 5, coupled with greater focus by corporations on gender equity within the workforce and across the supply chain, have also supported growth.

Weakest link

Advisers, often seen as the weakest link when it comes to putting forward sustainable investments, are finding gender-lens investments a comfortable entry point into socially responsible investments.

“Gender lens and low carbon are clear concepts around which we have metrics and measurements that can provide a gateway for advisers and clients into thinking about their entire portfolios differently,” says Farrar-Rivas.

Research to support the connection between returns and gender equity have given advisers further confidence.

“It’s clear now that gender balance within an organization is related to improved financials – and that having women in leadership roles reduces the propensity of sexist and inappropriate behaviour within a firm,” she adds.

Farrar-Rivas hopes and expects that considerations around gender equity will become more embedded within investment decisions.

“We expect this $2.4 billion in pure gender-lens investment mandates to reach up to $20 billion to $30 billion within the next five years,” she says. “But there is an estimated $500 billion in mandates that include some form of gender consideration.”

The CEO says the upward trajectory is clear given how legislation is moving and points to states such as California that now require that any company domiciled there must have one woman on the board, and to increased transparency and gender equity action required out of Europe.