Equileap: Investing in Gender Equality
Poverty in Ecuador, where I grew up, was seldom out of sight. Although my family and I were not directly affected by poverty, we did not ignore it. Every day, on my way to school, a group of homeless approached our car to ask for charity at the stoplight. Some of them were men, but the majority were women and children, often young girls carrying their younger siblings on their back. Seeing them on a daily basis had a deep impact on me.
The more I looked at poverty, the clearer it became that gender inequality was one of the main elements perpetuating the cycle. Understanding that poverty has a predominantly female face drove me to work for NGOs that promoted women's economic empowerment, sexual and reproductive health and women's rights. About nine years ago, I had my first career switch. Some private donors asked for help with their philanthropic activities. These people, with "a big heart and a big wallet" - as I would to call them, needed advice on how to make a difference with their charitable donations. After returning from a vacation in India, I remember one donor was upset with the poor conditions in which tapestry weavers live and work. The donor asked me if I knew any trustworthy organizations she could support to improve the lives of these weavers. This was the beginning to becoming a philanthropic advisor, writing a giving handbook and conducting research on philanthropy in the Netherlands, my second home country.
A few years afterwards, a private bank asked if I would help them set up their philanthropy advice services for wealthy clients. Switching from the non-for-profit sphere to the very-much-for-profit one at a private bank opened a new world for me. I learned about different financial tools and how to use ESG criteria to build sustainable investment portfolios. I also saw how philanthropic donations, while immensely in value, only tend to make up a minimal percentage of a person’s total wealth. Think of capital as an apple pie, where the apple pie as a whole represents investment capital, and the crumbs falling off the pie represent the donations. Most people set their hearts and hopes on the crumbs, hoping these will make a difference in the areas they care deeply about. They often ignore the potential of their largest assets to create social impact.
During this time, I also began to see how important it was to align investments with values. If funders are not aware of how their money is invested, then it is possible for them to work in contradiction with their values. For example, a donor giving all her/his donations to raise awareness of the growing threat of diabetes failing to screen out the fast-food industry from her/his investment portfolio.
The world of "social impact investing" is a fresh and innovative approach and I was disappointed with how seldom gender equality was mentioned. I decided to dp some research to find out if there was a way to invest using the gender equality criteria in order to promote a positive impact in the lives of women and girls. Soon I came across extensive data pointing towards the social and financial benefits of investing with a 'gender-lens'. In fact, there is a small mountain of research pointing towards the link between companies showing better gender balance in their leadership and higher profits. Not only are the profits higher for these companies, but they are also more sustainable, have better governance and tend to be more risk-averse than companies led only by men. With this data on hand, I decided it was time to use investment capital to take a real leap towards gender equality.
Early 2016, together with a partner based in London, we set up Equileap, a new foundation that promotes gender-lens investing as a high-impact social and financial strategy. Our aim is to support transformative global change for women and girls, and at the same time, deliver a return for investors. The investment criteria Equileap promotes is based on the UN Women’s Empowerment Principles. We use the latter to identify the companies that show gender balance in leadership and also promote equal pay and services that have a positive impact on women and girls.
Equileap's first activity is to partner with an asset manager to create a new investment fund. This fund will invest in public quoted companies that meet ESG standards and gender equality criteria. The fund will generate an ethical financial return for investors, and give them the opportunity to share part of their returns with the Equileap Foundation, which will support projects that promote the empowerment of women and girls. The next months will be crucial as we look for the right asset management firm to partner with. We know this is a great challenge, but we feel lucky to be supported by various private and public organisations that believe in us and are willing to put their time and money into making Equileap a reality.
Diana van Maasdijk is the co-founder of Equileap, an organisation investing with a gender-lens. Her past roles include heading Philanthropy Advice at ABN AMRO private banking, running her own philanthropy consultancy firm in Amsterdam and being Director of Development for MamaCash Fund for Women. She is also the author of “Handboek Goed Geven”, the first giving guide in the Netherlands. She can be reached at email@example.com.