2023-Public-Sector-Perspectives

Best practice: Investing and gender bonds A robust GLI strategy invests with the intent to address gender issues or promote gender equity. So, for example, it prioritizes investing in women-owned or women-led enterprises, enterprises that promote workplace equity (employee and leadership representation, and supply chains), or enterprises that offer products or services that substantially improve the lives of women and girls. GLI investment can involve a process that focuses on gender, from pre-investment activities (e.g., sourcing and due diligence) to post-deal monitoring (e.g., strategic advisory and exiting). Alternatively, GLI investors may implement a strategy that examines investee enterprises’ mission to address gender issues; their organizational structure, culture, internal policies, and workplace environment; their use of data and metrics for the gender-equitable management of performance and to incentivize behavioral change and accountability; and how their financial and human resources signify overall commitment to gender equality. Inclusive initiatives: The G7’s public private gender challenge In 2018, the G7 launched the 2X Challenge, which is a global initiative focused on GLI. The goal was to inspire development finance institutions (DFIs) and the private sector to invest in the world’s women. In its first three years, the 2X Challenge successfully mobilized $11.4 billion; participating DFIs and MDBs also committed to mobilizing a further $15 billion from 2021 to 2022. The success and momentum generated by the 2X Challenge led to the creation of a new global industry body, 2X Collaborative. It aims to bring together investors, intermediaries and innovators who deploy GLI capital across various asset classes and markets around the world. The U.S. Development Finance Corporation (DFC), America’s development bank, operates an inclusive program called 2X Women’s Initiative, which is committed to addressing the challenges women face globally and unlocking the multi-trillion-dollar opportunity women represent. Through 2X, DFC has catalyzed more than $13.5 billion of investment in projects that are owned by women, led by women, or provide a product or service that empowers women; the agency is working to catalyze an additional $12 billion by 2025. DFC applies a gender lens to every project it considers to ensure women are at the heart of its investment decision making. Gender bonds: Gathering momentum Gender bonds are bonds which integrate gender considerations into their objectives with the purpose of raising awareness of gender inequality and empowering women. The aim of gender bonds is to tap into investor interest in pushing for gender equality through bond issuances. 7 To date, issuances of gender bonds have primarily been undertaken by multilateral development banks (MDBs) and corporations; there has not been a sovereign gender bond. However, UN Women is working alongside governments across Asia, Latin America and Africa to develop frameworks for sovereign gender bond issuances, and certain sovereign issuers have already obtained the approvals necessary to conduct a gender bond issuance. Some notable gender bonds include: • Turkey: In 2018, Garanti Bank issued the first private sector gender bond in emerging markets dedicated to financing enterprises and companies owned or managed by women. The investment was conducted in partnership with the Women Entrepreneurs Opportunity Facility (WEOF) launched by IFC through its Banking on Women Program and Goldman Sachs’ 10,000 Women initiative. • Thailand: In 2019, Bank of Ayudhya issued the first gender bond issuance in Thailand (and East Asia). • Indonesia: Bank OCBC NISP’s sustainable bond program launched the first-ever gender bond in Indonesia in 2020. • Mexico: In 2020, Fideicomisos Instituidos en Relación a la Agricultura (FIRA) issued the first social bond with a gender focus in Mexico with the aim of expanding the resources available to finance projects led by women in rural areas. FIRA is a second-tier national development bank that offers credit, guarantees, training, and technical assistance through its network of banks and non-bank financial intermediaries. The Inter-American Development Bank (IDB) supported FIRA in this initiative. In 2018, the G7 launched the 2X Challenge, which is a global initiative focused on GLI. The goal was to inspire development finance institutions (DFIs) and the private sector to invest in the world’s women. 7 https://www.dechert.com/knowledge/onpoint/2022/7/the-growing-trend-of-gender-bonds-in-2022.html 30 Gender Equality in Emerging Markets: Barriers, Benefits and Best Practices