This piece is part of a special series on Gender-Smart Investing, following the world’s first ever Gender-Smart Investing Summit in 2018.

It was written by Suzanne Biegel, co-producer of the Summit, founder of Catalyst at Large and a global leader in gender-smart investing.

Across the public and the private sector, many are increasingly talking about women’s economic empowerment and supporting women- and minority-owned businesses.

But few have recognised the tremendous and expanding opportunity that using an explicit gender lens in public sector investment holds, and how public sector innovators are already leading the way, directly and indirectly.

"Gender-smart” investing combines a traditional focus on returns with a desire to level the playing field for women and other underestimated entrepreneurs.

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Gender-smart investors integrate gender into investment strategy and analysis in order to increase returns, fuel innovation and move towards gender equality.

We do this in a variety of ways: by investing in businesses that are woman-led, co-founded, or owned; by investing in products and services that solve social issues that disproportionately impact women and girls; by investing in companies with a strong track record in gender equity; by paying attention to gender in any investment decision; and by thinking about who is at the table driving those decisions.

At the Gender-Smart Investing Summit in London last November, we brought together 300 trailblazers from diverse sectors and geographies to discuss how we could move more capital, more strategically and with more velocity, with a gender lens. The stories of leadership, innovation and change they shared were full of rich examples of the roles that public sector actors can make in this global arena.

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You can read about some of these ideas in more detail in other articles in Apolitical’s series on gender-smart investing. But to get you started — and hopefully inspired — here are four areas where the public sector has a particularly powerful opportunity to make an impact.

  1. Public investment

Established public (and private) sector tools, like growth accelerators and incubators, play a crucial role in developing new entrepreneurs and markets. But the most innovative public servants are taking things further: creating their own venture capital funds to back, specifically, women and other underrepresented entrepreneurs and leveraging their influence to bring private sector players to the table.

Last August, the New York City Economic Development Corporation announced a $10 million investment in women entrepreneurs over five years, while northeast Ohio’s Jumpstart Evergreen Fund has a stated commitment to invest in seed-stage women and minority-owned businesses.

On a more international scale, OPIC, the US development bank, is partnering with IDB Invest to create a $200 million gender-focused fund in Latin America and the Caribbean, as part of a $1 billion commitment to women called 2X. And through the Investing In Women initiative, Australia’s Department for Foreign Affairs and Trade has catalysed four traditional venture funds to shift how their teams source, invest and manage an increase in women in their portfolios.

  1. Research and data

Gender-smart investors need data to make informed investment decisions, whether it’s knowing about women’s access to and use of technology, or understanding patterns in gender-based violence to decide whether to invest in an app that makes riding on buses safer for girls. Governments can ensure that data on issues that have impact for women and girls is accurate, up to date, and accessible.

As UNCDF consultant Katherine Miles shared at the Gender-Smart Investing Summit, when investors wanted to know what percentage of SMEs accessing bank finance in Africa were women-led, a group of African central banks mandated banks to provide sex-disaggregated data on borrowers to drive policy and capital allocation decisions more equitably.

  1. Contracts and procurement

Public authorities spend huge sums of money buying goods and services from organisations across every sector — £236 billion ($311bn) each year in the UK, according to the Equality and Human Rights Commission.

But only a small fraction of public sector contracts go to women-owned or led businesses. The latest US reports put the percentage of federal contract dollars going to women-owned companies at 4.7%, while just 10% of Canadian SME suppliers are women-owned.

The UK’s Social Value Act, which requires councils to consider the social, environmental and broader economic impacts of their procurement decisions instead of just going with the lowest bidder, has yet to have a significant impact from a gender-smart perspective. But the promise is there. The implications for investment into women-owned companies are tremendous — more solid contracts can translate to more investor confidence and backing for those businesses.

Initiatives like Project 500 led by Melissa Bradley in Washington DC are demonstrating that contracts and capital can change the game for women- and minority-owned businesses and create an innovative, resilient procurement chain for the public sector.

  1. Pension funds

Public sector pension funds represent $40 trillion in capital in the OECD alone, making them some of the most powerful vehicles for both investment and shaping the market. Forward-thinking funds are making the most of their influence to push for greater gender equality and smart diversification strategies in portfolios.

In 2018, the Ontario Municipal Employees Retirement System invested C$100 million (US$76m) in a fund created by the Royal Bank of Canada to drive capital to publicly listed companies with a demonstrated commitment to gender diversity. The California State Teachers Retirement System has a long history of pushing for greater diversity in its portfolio companies, backing the SHE ETF and objecting to Facebook’s intent to field an all-male board of directors in the lead-up to its IPO.

The Japanese Government Investment Fund, the world’s largest pension fund, leverages its $1.2 trillion weight to push for greater representation of women in the workforce, senior management and boards.

Smart and right

Beyond these four areas, the Summit also showcased tremendous examples of where public sector actors are looking at how finance can be used as a tool to address seemingly intractable issues, such as gender-based violence, slavery, trafficking and reproductive health.

Each of these examples, and more, were led by visionary, bold, public sector innovators who saw that this wasn’t just the smart thing to do, it was the right thing to do. And acted.

This is not just about levelling the playing field but backing new playing fields with a gender lens, and growing economies locally, regionally and globally in the process.

I challenge you to bring one these ideas — or a new one of your own — to your work. We’d love to hear what you’re doing and what you need to make it happen. — Suzanne Biegel

(Picture credit: Pexels)