International Women's Day: Adding Gender to Impact Investment Portfolios

As the world celebrates International Women’s Day this week, it is hard not to think of the progress and remaining challenges facing our global society in achieving gender equality. We have Malala Yousafzai and Hillary Clinton as examples of high-profile women leading their own movements, with the United Nations focusing on all women, with “Achieving gender equality and empowering all women and girls” as their fifth-ranking Sustainable Development Goal (SDG).  And – just as we see with most social issues – the conventional way of approaching positive change, like counting the number of women who show up to a hand-washing training, is not nearly adequate. International investors, who are already exploring innovative ways to solve large-scale environmental, agriculture, energy, and health issues, are also looking at how to bring impact investing to bear towards gender equality.

Most of today’s global investors are not solely interested in pure financial returns. In an era where doing well and doing good are sought together, even investors are looking to use their money to generate social returns alongside financial returns. This is the market of “impact investing,” a sector that is actively seeking market-based solutions to social and environmental problems, instead of the conventional model of simply “do no harm.”

And this impact investment market is growing. Global Impact Investing Network (GIIN) estimates there is currently $60 billion worth of impact investment under management. A recent Impact Investing Australia 2016 Investor Report concluded that its country’s impact investment market is set to grow over the next five years, with 41% of respondents who are active impact investors aiming to triple their impact investment fund allocations over this period. The majority of its respondents who were non-impact investors indicated they were “likely to consider social, environmental, and cultural impacts as metrics” for their investments.

With this growing market, led by heavy-hitters like J.P. Morgan, The Rockefeller Foundation, along with the Ford and Kellogg Foundations, it is natural to explore how impact investing can add to its successes and seamlessly include gender among the array of sought outcomes. For International Women’s Day, Forbes published an article, “5 Easy Ways to Invest in Women – And the World,” citing a GIIN survey where one third of the impact investment respondents already explicitly target gender equality as an impact focus, shown in Figure 57. Veris Wealth Partners, a firm with $800 million in managed impact investments, now sees “gender lens investing” as the most popular of its five impact strategies.

Impact investing is being explored as an innovative way to finance large-scale social protection programs, such as school feeding, increasing economic benefits by improving smallholder farmers’ market access, and supporting agriculture production and better ensuring food security. Within every one of these areas, gender equality is a seamless and natural fit.

Let’s look at Nigeria as one example.  This February, 20 Nigerian women won the African Women in Agriculture Research and Development, leading the pool of winners across eleven African countries. Cassava, according to the United Nations Environmental Programme, is a leading staple crop both in Nigeria and throughout Africa that is traditionally considered a “woman’s crop.” Women do the bulk of the post-planting labor, such as weeding, harvesting, transporting, processing, and marketing. Just last month, the American Association for the Advancement of Science invited Nigeria’s National Root Crops Research Institute to hear Nigeria’s latest advancements that would put cassava on par with the world’s industrial cash crops, and, also benefit women smallholder farmers.

In Haiti, investing in cleaner energy technologies such as cleaner stoves or “green charcoal” not only creates environmental improvements, but also directly benefits health outcomes for women, who are largely responsible for family cooking.  The World Bank estimated that 70% of Haitians were dependent on wood fuel as its primary cooking fuel, which led to extreme indoor air pollution and respiratory infections – a leading cause of Haiti’s ranking as a country with one of the highest rates of tuberculosis in the world.

Let’s combine these problems and look at how impact investors could target specific outcomes that promote gender equality by measuring the impact of the benefits that, for example, a school feeding program offers. These targets could include:

  • Ensuring at least 50% of the smallholder farmers producing for the school feeding program is women.
  • Targeting “women crops,” like cassava, as key parts of school meal menus.
  • Choosing at least 50% women-owned small and mid-sized enterprises to introduce to investors agro-allied transportation and processing companies.
  • Specifically tracking women’s participation in the preparation, cooking, and delivery of the school meals with focused M&E.
  • Investing in and ensuring the use of cleaner technologies for food preparation.

To end with business-sage advice from Forbes, “there’s no shortage of opportunities to make women a part of your investment strategy – with results that will improve lives as well as your investment portfolio.” In the growing impact investment market, gender equality is already rising as an obvious focus for investment portfolios, and those seeking impact investments may do well to include specific gender-focused targets to attract better financing.

Friends, not Enemies of the State: Civil Society in Extremist-Affected Nations

“Improving government legitimacy is vital to a just and peaceful Iraq,” Mercy Corps posits in their newly-released “Investing in Iraq’s Peace: How Good Governance Can Diminish Support for Violent Extremism.” The title and the research behind it unsurprisingly affirm what has come to be the prevailing hypothesis in the global Countering Violent Extremism (CVE) discourse: poor governance resulting in marginalization, whether real or perceived, is a key driver of extremism; More so than poverty, religion or ethnicity. Indeed, data collected everywhere from Iraq to Nigeria, Colombia to Afghanistan support this notion. And yet improving governance remains an under-pursued and scarcely funded CVE strategy. Perhaps because improving governance, for many, seems an abstract and onerous objective; and one that extremist-affected states often resist. 

This report, however, suggests an indirect approach to improving governance may be a paradoxically straightforward way of targeting extremism: Invest in civil society, and governance will improve, followed, in turn, by a reduction in extremism.

Most of us quietly root for the grassroots NGOs who are demanding improved transparency in weak states, or for watchdog groups exposing state corruption and human rights abuses in an effort to spark reform. But it comes as no surprise that the governance institutions these civil society actors have in their sights, hardly jump at the chance to invest in or empower them. This report suggests, however, maybe they should be.

Mercy Corps' research in Iraq suggests that as the prominence of civil society groups rise, (For example, those who serve as honest brokers between marginalized groups and government bodies) so too do public perceptions of governance. This demonstrates the correlation between civil society and governance. If, by extension, improvements in governance are correlated with drops in extremist sentiment -- as has been documented in contexts around the globe -- it follows that the strengthening civil society may be an indirect way to counter violent extremism. 

In Nigeria, a state signaling its earnest desire to counter the extremism promulgated by Boko Haram, the government (and donors and businesses and others) may consider enabling and investing in civil society as an important element in CVE campaigns. In Mali, where a strategy entitled “Civil Society for Human Security” was penned by a consortium of local NGOs, the national government (who has already been the target of AQIM and ethnic extremists), may be well-served listening to and integrating critique offered them by their domestic civil society. In fact, across the globe, naturally defensive officials may find that embracing their critics helps them defeat a far more insidious foe.       

The idea that “boosting civil society reduces extremism” remains a vague hypothesis, but Mercy Corps' new research on Iraq, coupled with data from extremist contexts around the world, offer empirical evidence to suggest there is indeed a link. States from the Sahel to the Levant to Latin America to Southeast Asia that each face their own brands of extremism may wish to consider making nice with even the peskiest of NGOs, advocacy groups, or watchdogs. Doing so may spare those governments from a far worse enemy of the state.

Better Odds than ISIS: Defeating Boko Haram, the World’s #1 Deadliest Terrorist Group

Northeastern Borno State is the epicenter of 23,402 deaths since May 2011. Map from the Council on Foreign Relations Africa Program's Nigeria Security Tracker.

Northeastern Borno State is the epicenter of 23,402 deaths since May 2011. Map from the Council on Foreign Relations Africa Program's Nigeria Security Tracker.

This week marked a sad, newsworthy occasion for Africa watchers. The 2015 Global Terrorism Index (GTI) was released, identifying Boko Haram, Nigeria’s notorious extremist insurgent group, as the #1 deadliest terrorist group on the planet. Surprising many, Boko Haram surpassed ISIS in the number of fatalities for which it was responsible (6,644 deaths vs. 6,073 deaths). The rankings also earned Nigeria the tragic distinction of leading the world for the largest increase in terrorist incidence of any country on earth, with a 317% rise. While the GTI rankings do little for the reputation of a country Motive International holds in the highest regard, we view this report as an opportunity. This is a moment to draw attention to a country and crisis that have been underestimated for too long, but where every opportunity exists to turn things around.

Boko Haram became a household name in 2014 thanks to the #BringBackOurGirls campaign, yet few realize just how lethal the group is, and rarely is the scale, scope, and nuance of the crisis system in which they operate adequately portrayed. In their 6-year insurgency, Boko Haram has claimed tens of thousands of lives, and spurred one of the largest conflict-fueled migrations of internally displaced persons (IDPs) and refugees on earth, estimated at over 3 million people. Operating, recruiting, and wreaking havoc not only in Nigeria, but neighboring Niger, Chad, and Cameroon, Boko Haram is responsible for billions in economic losses, heightened food insecurity due to massive disruptions in production, and spiraling grievances among citizens. Having pledged allegiance to ISIS earlier this year, Boko Haram is the African franchise of a globally syndicated brand of terrorism that knows no borders. If Paris showed us why we need to pay attention to what happens in places like Raqqa and Mosul, Boko Haram demands that we turn our attention to cities like Maiduguri and Diffa.

A June 2015 meeting of Lake Chad Basin Commission Executive Secretary with leaders from Benin, Nigeria, Niger, Chad, and Cameroon. Photo from Vanguard.

A June 2015 meeting of Lake Chad Basin Commission Executive Secretary with leaders from Benin, Nigeria, Niger, Chad, and Cameroon. Photo from Vanguard.

The good news is, awaiting us in Boko Haram's turf, are far better options and partners than in the region ISIS calls home. Nigeria is not a failing or rogue state, nor is it in the midst of widespread civil war as is true for Syria and Iraq. Contrary to what Western headlines portray, Nigeria boasts stable security throughout the vast majority of its territory, and remains a thriving economic, political, and cultural powerhouse. Not always credited for the vibrancy and stability of its institutions, Nigeria is home to a highly sophisticated business and civil society sector, and a free and dynamic media. Its capable government and military institutions, while imperfect, are undergoing a renaissance thanks to President Buhari’s merciless anti-corruption efforts, and a national agenda driven by accountability and fair deals for citizens.

At the regional level, 60+ year old international organizations like the Lake Chad Basin Commission (LCBC) -- recognized as the umbrella organization for the African Union and UN-backed Multi-National Joint Task Force (MNJTF) -- provide platforms for cross-border, civil-military, socio-economic, and political problem solving. Such homegrown institutions in the region, which have persisted against the odds with little outside funding and tricky bi-lateral dynamics,  present tremendous opportunities for partnership and meaningful, collective action.   

These are all reasons why Motive has chosen to engage Nigerian and regional influencers, including Nigeria’s Ministry of Defence and the LCBC. We are hopeful that with such partners -- and hopefully new friends alarmed by the GTI ranking -- we can cultivate durable peace and stability in a country and region currently terrorized by the deadliest group on earth. Motive’s system-based not symptoms-based approach seeks to mobilize a whole-of-society campaign aimed not just at defeating Boko Haram, but shifting the vicious cycles that allow crisis to perpetuate. This campaign for durable peace and stability will take a village -- which is why we invite governments, civil society, security forces, and the private sector to join us. It's high time we start investing the human, social, political, and financial capital this crisis warrants. The good news is, doing so in this region offers the prospect of achieving faster, more significant results with far less compared to regions the #2 deadliest group, ISIS, calls home. 

As Africa’s most populous nation, and its largest economy, Nigeria should be at the top of many lists. But not the Global Terrorism Index! Join Motive International in our campaign to knock Boko Haram off the list in 2016 (#BHOffTheList), and bring peace and stability to a region that deserves, and is getting a bittersweet boost in our collective attention this week.