GII provides false solutions says feminist group 

April 6, 2023

The Association for Women’s Rights in Development (AWID) has criticised gender impact investment (GII) strategies for failing to achieve the systemic change it promises. 

The ‘Gender Impact Investing & The Rise of False Solutions’ report argued GII offers false solutions for gender inequality and actually contributes to the problem. 

GII strategies, which are also known as gender lens investment strategies, take gender-based factors into consideration and aim to use finance to incite social change.  

However, the AWID argued the impact of GII strategies varies from investor to investor because there is no agreed definition of ‘gender-based factors’.  

The feminist group also criticised such gender-focused investing for claiming to mirror the ideology of feminist movements, without including the ‘how’ in which this systemic change would actually happen.  

The report stated: “While GII is marketed as a promise to support the work that feminists do to transform inequalities, it is unlikely to deliver as what most of its investors expect is profit, not systemic change.” 

Even though GII is now trending as a solution to gender inequality, the investment strategy has failed to raise large amount of funds in comparison to other impact investment approaches.  

The report revealed the total amount of funds targeted to be raised for gender impact in 2020 was $13.2bn, but only $5.34bn was actually raised that year. 

In the first half of 2021, the amount raised increased to $6bn, which demonstrates the amount of money in GII has been significantly growing year over year.  

However, the actual portion of GII within the larger impact investment landscape remains small. 

The report said: “No matter which estimates we use, what is clear is that the amount of funds being put towards GLI or GII is a relatively small amount compared to the percentage of funds that has gone to impact investments as a whole.” 

Improving gender equality and achieving system change remains a challenge for many regulators. 

In March, several former chairwomen of the SEC called on the regulator to do more to improve diversity within the US financial services industry. 

Later that month, the UK’s pensions watchdog urged chairs to play a role in making boards more diverse and inclusive.