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Investing in Women: A Gender-Lens Investing Conversation

Friday, March 1, 2019

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By Sarah Brodsky

Women who have been successful trailblazers in the workplace often see the value of investing in women and promoting gender equality. That’s true for Laura LaRosa, the Director of Client Development at Glenmede. “When I think about my experience as a woman in finance, and being one of the few women in senior positions for much of my life,” she said, “I think about how important it is to get behind the gender-focused investing concept.”

Many successful women understand the unique value that women bring to the table. “When you start to speak about gender-lens investing to other women they intuitively understand . . . They already know from their own experience that women are hard workers, they are dedicated employees, they tend to think in a very different way to solve problems. Basically, women clients like to own these strategies because they make sense.”

How Gender-Lens Investing Supports Women

Gender-focused investing strategies aim to support women, but use different methods to do so. One way is to seek out and support companies that have female board members, a female CEO, or high percentages of women in other senior leadership positions.

“The broad goal is to reward companies that practice diversity. That’s what you have to think about from the top-level. But then you break that down a little bit more and you realize that you have several different areas to think about,” said LaRosa. Investors could back companies whose end products or services have a positive effect on women’s lives, such as a firm developing new breast cancer therapies. Some investors are beginning to take into account employee benefits, as perks like paid parental leave and flexible working arrangements can help women stay engaged in the workforce. “You need to think about what outcomes a company has that will benefit women over time,” LaRosa said.

Microfinance is another avenue that can have a direct, positive impact on women. With support from gender-lens investors, companies are offering women access to credit and enabling them to become entrepreneurs and breadwinners. LaRosa hopes that companies will tackle new challenges pertinent to women’s lives including automating household chores to free up time for other pursuits, increasing the availability of sanitary products, and expanding girls’ access to education.

The Financial Benefits of Investing in Women

Not only can helping women to flourish in the workplace benefit society as a whole, but those benefits can accrue within individual firms. Board and executive diversity is good for a company’s growth because diverse leaders may be able to address blind spots and introduce innovative ideas that homogeneous organizations might miss. “Having different thought processes in the room instead of everybody thinking exactly the same ends up making for a much more profitable company,” said LaRosa.

Companies that have policies supportive of working mothers may be in a better position to win the war for talent. And when women see that their employer values them, according to LaRosa, “it develops a certain amount of pride in your employer, and it also develops a lot of loyalty towards your employer.” Thus, equitable policies could help employers retain a diverse workforce and reduce turnover.

Because gender diversity may benefit employers, investing in companies with solid track records on gender may be a financially sound strategy. “You can bring your risk way down, because that diversity tends to make for a much more stable company and a much more profitable company,” LaRosa said. This means that gender-lens investors may be able to meet both their social and their financial goals.

Common Misconceptions

LaRosa finds that a few common misconceptions hold people back from adopting a gender-focused strategy. One misconception is that gender-lens strategies sacrifice returns. But that’s disproved by data on gender diversity and financial performance. Educating folks about the financial benefits of gender-lens investing is crucial to its continued success. “There’s still a tremendous amount of education that needs to be done,” LaRosa observed.

Another common misconception is that gender-lens investment must be achieved through negative screening and that it requires investors to take entire sectors off the table, limiting their opportunities. In fact, according to LaRosa, “you can do this without using a negative screen. You can invest saying, ‘OK, I want to participate in the market, but I want to reward the companies that do the best work.'”

LaRosa made it clear that investing for women doesn’t have to be all-or-nothing. If investors are unsure about implementing a gender-focused strategy, she recommends that they first try dedicating a small fraction of their portfolio to gender-lens investments. “Take a baby step somewhere,” she said. “Start with 10% and make a commitment to want to do this going forward.”

Looking to the Future

LaRosa believes gender-lens investing is gaining momentum. “It’s a much more readily accepted idea to be gender diverse in your investments, and people are embracing it.” She sees increased interest from asset managers and investors, as well as from attorneys, accountants, and other professionals who are in a position to educate and share information with their clients.

As gender-lens investing becomes widespread, its potential to influence business trends and to promote a more diverse and equal society continues to grow. “I think it’s going to make a big impact on investing in general,” LaRosa said, “and I think it’ll make a big impact on society.”


Sarah Brodsky writes about economics, personal finance, business, and careers. She writes about economics for job site Glassdoor and reports on careers for Hcareers.com. She has covered credit counseling, debt, and personal finance for Investopedia and the CESI Financial blog and has contributed work on culture to the Jewish Daily Forward's Sisterhood blog. Her writing has appeared in the Washington Free Beacon, the St. Louis Business Journal, Info Tech & Telecom News, the Springfield News-Leader, Edspresso.com, School Reform News, and other publications. She earned a bachelor's degree in economics from the University of Chicago.

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