Just Good Investing: Our Gender Lens Investing Journey

Calvert Impact Portfolio Partner Greenline Ventures and Small Business Capital Fund Investee Voormi. Greenline Ventures Small Business Capital Fund I (SBCF) provide attractive loans at favorable or better-than market-rates to underserved small businesses in distressed census tracts throughout the U.S. Objectives include job creation and retention, worker training, improving employee benefits, boosting minority or women owned businesses, reducing environmental impacts and assisting low-income workers. Find more information below. Photo courtesy of Voormi.

Women’s History Month is a celebration of women’s contributions to history, culture and society and has been observed annually in the month of March in the United States since 1987.

(First published Dec. 2022) The upcoming 2023 Women’s History Month theme is “Celebrating Women Who Tell Our Stories.” This theme recognizes “women, past and present, who have been active in all forms of media.” It is not often that women in finance are invited to tell their stories, here is mine, the story of Calvert Impact’s journey into gender lens investing.

Calvert Impact has invested in women since our founding nearly 30 years ago. As an investment firm dedicated to investing in solutions that people and planet need, we helped grow the microfinance and community development financial industries, both of which are important sources of capital for female entrepreneurs. Ten years ago, we began experimenting with a more formal approach to investing in women. On International Women’s Day in 2012, Calvert Impact launched our first strategic initiative focused on empowering women, the Women Investing in Women Initiative (WIN-WIN). The goal of this initiative was to move from the dialogue of ‘why’ investing in women was important to actually putting capital to work. We sourced potential deals for gender impact and inclusiveness and created specific metrics to track our progress. We built a diverse global portfolio, from affordable housing in Texas to off-grid solar solutions in Tanzania. While the successes of WIN-WIN were numerous – nearly 900 investors channeled capital into projects that benefited over 20 thousand women and their families – some of the most valuable outcomes for us were the lessons learned from this endeavor.

As we analyzed the data from this diverse, global portfolio, it became clear that to understand our impact over time, we needed to take a sector and region-focused approach. Energy was the first sector we explored deeply with a gender lens. Access to clean, reliable energy led to positive impacts in health, education, and economic status. We chose this sector both for its level of maturation, needing patient debt capital to scale, and the outsized impact that access to clean energy has on women. Women make up 50 percent of the global population, but account for almost 75 percent of those living in energy poverty. Access to clean energy can improve women’s health by reducing indoor air pollution, and it can improve their economic situation by allowing more time in the evenings for productive activities like education and managing businesses. And while women were often the primary beneficiaries of access to clean energy, that impact didn’t always show up in the data because in many countries and contexts they were not the customers on paper as men often made the final decision to purchase and signed the contract.

In 2014, as a part of our second phase of WIN-WIN, we committed to investing another $20 million in organizations that work specifically in providing access to clean energy for women. Throughout this work, it became clear that gender is not a standalone issue, but one that overlaps and affects others. It is not an impact element that can or should be isolated, but an aspect of all investments in every sector, whether we acknowledge it or not.

Today Calvert Impact considers gender across all our investments and our gender lens investment strategy is both wide and deep. Wide in the sense that we collect gender-specific metrics for all our investments to understand gender dynamics across our multi-sector portfolio—and deep in each sector to understand where the need for our capital intersects with the potential to make a difference in women’s lives at scale.

Our partners include groups like Grameen America, a nonprofit microfinance organization dedicated to helping women who live in poverty build small businesses to create better lives for their families, that are explicitly dedicated to serving women. As well as groups like SunFunder, a solar finance business that directly impacts the lives of girls and women by providing energy access to households across Sub-Saharan Africa and Asia that has embedded gender into their investment process through credit appraisals and monitoring as well as internal operations.

We use gender as a lever and a lens: a lens to see risk and opportunity more clearly and as a lever to pull for greater impact. Gender is nuanced and contextual; there is no one way to incorporate gender into a strategy and our borrowers’ diverse approaches demonstrate this. We’re proud to work with our borrowers to introduce, improve, and enhance their gender strategies.

Gender equity is not just good for women – it’s good for investment, good for business, and good for society. In short – it’s good for us all. Ultimately, gender equity is not only an important impact goal as highlighted by Sustainable Development Goal 5, but a critical tool that has the potential to make all of us better investors.

Our challenge now is to ensure that more investors use it. We’ve published two guides to gender lens investing to help investors start incorporating gender into their investment processes – Just Good Investing: Why gender matters to your portfolio and what you can do about it, and Gender Lens Investing: Legal Perspectives. And we plan on doing more. We hope that this article serves as further inspiration to other investors and as always, our door is open to any who have questions.

 

Article by Jennifer Pryce, President and CEO of Calvert Impact. For 25+ years, Calvert Impact has strived to make markets work for more people, more often, by investing in communities overlooked by traditional finance. Calvert Impact invests globally across a range of sectors including affordable housing, environmental sustainability, microfinance, renewable energy, small business, and more.

Over the past decade, Jenn has lead Calvert Impact with a focus on innovation, sustainability, and scale. The work of Calvert Impact includes direct lending and investing, arranging, syndicating, advising, and developing new investment products. Calvert Impact is committed to ensuring impact investing is accessible to all investors, large and small, having worked with over 20,000 individuals, institutions, and advisors to raise more than $4.0 billion since their founding.

Jenn began her career in the Peace Corps in Gabon, worked as an equity analyst at NeubergerBerman, on the investment banking team at Morgan Stanley’s London office, and was a Director at the Nonprofit Finance Fund. She studied engineering at Union College and holds an MBA from Columbia University. Jenn currently serves as a Forbes contributor, a lecturer at Oxford Saïd School of Business and sits on various boards, including the UNICEF Impact Investing Fund.

 

IMAGES:

(Top) from Calvert Impact Portfolio Partner Greenline Ventures and Small Business Capital Fund Investee Voormi. Greenline Ventures Small Business Capital Fund I (SBCF) provide attractive loans at favorable or better-than market-rates to underserved small businesses in distressed census tracts throughout the U.S. Objectives include job creation and retention, worker training, improving employee benefits, boosting minority or women owned businesses, reducing environmental impacts and assisting low-income workers. Voormi is a high-performance, natural fiber based active apparel brand located in Pagosa Springs, CO, a mountain town of less than 2,000 people. Their goal is to create sustainable products that are built to endure hard conditions, are durable, support the local community, and deliver its goods without the need of thousands of gallons of oil and gas to get there. They also strive to transform rural communities into small manufacturing hubs providing economic development where it is needed most. As a result of the financing from SBCF, Voormi projects they will create 3 new positions in the local community. All jobs will include benefits and do not require a 4-year degree. In addition, Voormi will provide training to low-income workers for high paying “technical seamstress” jobs.

Image from Portfolio Partner responsAbility Access To Clean Power Fund Investee D. Light. responsAbility’s Access to Clean Power Fund is a private debt fund that seeks to address the lack of access to clean power globally, with a strong focus on Sub-Saharan Africa and South and Southeast Asia. The Fund targets companies that provide solutions to households without access to electricity and to businesses looking for cleaner, cheaper and more reliable energy. Beyond the financing of the dynamic off-grid energy sector, the Fund will also actively address the solar potential for the commercial and industrial (C&I) sector. In June of 2022, responsAbility issued a $14 million loan to d.light, a leading producer of solar-powered products for low-income families in emerging markets. The loan will provide flexible capital to fund d.light’s newly established financing vehicle, Brighter Life Kenya 2 (BLK2), and allow the organization to expand its operations across Africa. BLK2 is the largest off-balance-sheet financing facility of its kind.

Image from Calvert Impact portfolio Partner Accion Opportunity Fund Investee Lia Hirtz, owner of World Empanadas. Accion Opportunity Fund (AOF) works to create an inclusive, healthy financial system that supports the nation’s small business owners by connecting entrepreneurs to affordable capital, educational resources, coaching, and networks. Through innovative partnerships and outreach strategies, they reach entrepreneurs of color, underfunded entrepreneurs, and women, who often lack access to the financial services they need to build and grow their businesses. For over 25 years, AOF has served a client base that is nearly 90% women, people of color, or immigrants. Their clients’ businesses have historically had a 96% survival rate, compared to the national small business survival rate of 50%. AOF’s work has supported or created more than 50,000 jobs and generated $1 billion in economic activity.

A first-time entrepreneur at 55 years young, Lia wanted to share an Argentinian tradition with Southern California. Her goal was to provide customers with the best empanadas in town! Even throughout COVID-19, her family-owned small business found a way to continue to share sweet and savory versions of this amazing dish. Lia was facing more than just a freezer dilemma. Her business was also tied up in aggressive merchant cash advance loans that helped finance their move into their new space and other improvements like installing a hood for the stove. She had some capital thanks to personal loans from friends and family, but World Empanadas needed help to get the freezer unit that could make their business really take off. Lia’s loan officer, Robert, offered Lia a $15,000 Accion Opportunity Fund loan, which helped World Empanadas purchase the walk-in freezer unit. “I couldn’t believe it,” Lia said. “Within a few weeks Robert called me and told me I could pick up our check. It was just like that.”