The footprint of the space, in terms of dollars and number of strategies, has grown tremendously
Responsible investment strategies have been gaining traction worldwide, with high-net-worth investors and institutions paying closer attention and pouring more assets into the space. And while issues like climate change and good governance may be consistently popular, one particular ESG theme has quietly exploded.
According to a recent report from Veris Wealth Partners, Gender Lens Investing (GLI) has grown strongly in the 12 months ended June 30, 2018, rising 85% to hit a record US$2.4 billion. Looking at a four-year timeframe, assets in the space has risen exponentially from US$100 million in 2014 to US$2.4 billion today.
GLI is a flavour of RI that targets a variety of outcomes such as advancing women in leadership, increasing women’s access to capital, and supporting development of products beneficial to women and girls.
“The number of explicitly gender lens strategies holding publicly traded securities is also multiplying,” Veris said. While the firm’s research found only eight GLI vehicles in 2014, the latest report found the number had more than quadrupled to 35 by mid-2018. The vehicles cut across a range of asset classes and structures including separately managed accounts, ETFs, mutual funds, and bond issues.
And while GLI was initially an exclusively US movement, public-market GLI offerings have mushroomed in Canada, Europe, Australia, Nigeria, and Singapore. “As of mid-year 2018, GLI mutual funds, exchange traded funds, exchange traded notes and CDs had attracted about US$1.2 billion in capital,” the report said.
Because of the proliferation of GLI across the spectrum of investment vehicles, Veris noted, there’s been an evolving trend from single-product GLI offerings to opportunities for fully diversified GLI portfolios. “Investors are bundling multiple GLI products into customized portfolios comprised of equity, debt and cash equivalent options, in both public and private markets,” it said.
GLI is also gaining institutional support on multiple fronts. Aside from investments from foundations and pension funds, there’s also growing recognition of opportunities in GLI from academics, governments, NGOs, and research organizations. That’s creating an increase in the amount of research and tools to explore the space.
“A growing number of organizations are bringing research capabilities to map the GLI landscape, analyze investment criteria and evaluate outcomes,” the report noted, adding that data providers such as Sustainalytics and MSCI are continually working to address the issue.
And aside from an increase in companies and asset managers that track female representation throughout their organizations, there’s a rise in the number of companies focused on valuing women. Dialogue, proxy ballots, and resolutions have become more effective in getting companies to disclose gender pay gaps and assess workplace safety for all employees.
“Shareholder activism has been effective in part because companies are seeing previously unaddressed gendered risks and are moving to mitigate them,” the firm said.