7. Impact and Gender Lens Investing

This chapter delves into the world of impact investing, a strategy that combines financial returns with positive social and environmental outcomes. It begins by exploring the concept of impact investing, its five key elements, and how it differs from traditional investing and philanthropy. The chapter also provides an overview of the size and market characteristics of impact investing, highlighting its growth and the various themes it encompasses, such as financial inclusion, sustainable agriculture, healthcare, and gender equality. A significant portion of the chapter is dedicated to gender lens investing, a subset of impact investing that focuses on promoting gender equality. It discusses the Gender Inequality Index, the gender pay gap, and the 2X Criteria, a set of standards for selecting and assessing companies with gender lens characteristics. The chapter also outlines the investment process for gender lens investing and the role of technical assistance in advancing gender equality. Throughout the chapter, the importance of impact measurement and management is emphasized, with a focus on the five dimensions of impact and the IRIS+ metrics. The chapter concludes by encouraging the further development of the impact ecosystem to unleash its full potential.