Investments in this strategy aim to supply essential services and products by developing new transport methods to reach previously inaccessible areas, improving supply chains, and establishing novel community-centered service delivery models to ensure rural populations have access to basic services. The sections below include an overview of the strategy for achieving desired goals, supporting evidence, core metrics that help measure performance toward goals, and a curated list of resources to support collecting, reporting on, and using data for decision-making.

What

Dimensions of Impact: WHAT

Investors interested in deploying this strategy should consider the scale of the addressable problem, what positive outcomes might be, and how important the change would be to the people (or planet) experiencing it.

Key questions in this dimension include:

What is the problem the investment is trying to address? For the people experiencing the problem, how important is this change?

The Fair Wear Foundation has set forth eight overarching conditions to assess employment rights and conditions across supply chains: (a) “employment is freely chosen,” (b) “there is no discrimination in employment,” c) “no exploitation of child labor,” (d) “freedom of association and the right to collective bargaining,” (e) “payment of a living wage,” (f) “reasonable hours of work,” (g) “safe and healthy working conditions,” and (h) “legally-binding employment relationship” (1).

These eight categories exhibit severe disparities by gender. When conducting due diligence on businesses that rely upon the global supply chain for products, raw materials, and agricultural crops, gender lens investing is critical to consider the female employees, migrant workers, children, and other particularly vulnerable groups of people who are regularly employed, either formally or informally, in the global supply chain workforce of more than 450 million people. These people are regularly and systemically subjected to sexual violence, coercion, harassment, economic exploitation, forced labor, human trafficking, unacceptable working conditions, and physical and mental harm (1,2,3,4).

When designed with gender-equitable principles, value-chain programs have both competitiveness and gender equity arguments for their adoption. Understanding these efficiency and empowerment arguments for promoting gender equality and developing value chains allows organizations to identify relationships and actions that can at once accelerate poverty reduction, enhance competitiveness, and support gender-equality goals.

What is the scale of the problem?

Addressing structural inequities, particularly the wage gap, materially benefit the well-being and overall lives of women and other traditionally marginalized people. Unequal access to economic means can hinder a woman’s ability to own and control their own financial assets to save for the future and achieve their retirement objectives (5). Moreover, unequal economic access can impact a woman’s level of control over their job, make them more vulnerable to emergency situations and economic shocks, and affect their ability to make their own life choices. (5,6,7,8).

Data released from the Household, Income and Labour Dynamics in Australia (HILDA) panel study regularly demonstrate the significant economic differences experienced by men and women in retirement: nearly 24% of single women aged 65 or over live in entrenched income poverty compared to 17.4% of single men in the same age group (9). One study in the United States found that the gender pay gap alone contributes to the disproportionately high (2.5 times compared to men) level of anxiety and depression women experience (10).

Who

Dimensions of Impact: WHO

Investors interested in deploying this strategy should consider whom they want to target, as almost every strategy has a host of potential beneficiaries. While some investors may target women of color living in a particular rural area, others may set targets more broadly, e.g., women. Investors interested in targeting particular populations should focus on strategies that have been shown to benefit those populations.

Key questions in this dimension include:

Who/What is helped through this strategy?

Groups of people within the global supply chain who may be helped by this strategy include the following:

Women: Women are heavily employed throughout the global supply chain, with levels of representation that vary by industry. Female employees are disproportionately subject to human rights and oppressive gender-related abuses. Gender inequality comes in many forms, including restrictions on the type of work women do, limited access to labor protections, and disparities in compensation (11).

Children: Often employed informally, where they can be trafficked and exploited by the global supply chain, children are another highly vulnerable group to human rights violations. The International Labour Organization (ILO) estimates that 152 million children between the ages of five and 17 are engaged in child labor, with most victims under 14 years old (13). While the global supply chain has lowered costs and increased efficiencies, it has also helped to mask child-labor violations in many industries (13).

Migrant Workers: Often lacking legal status in their country of employment, migrant workers are also heavily exploited by the global supply chain. Migrant workers are regular victims of human trafficking rings, various forms of economic exploitation (including modern-day slavery), and sexual violence. According to Verité, a global labor-focused nonprofit, “some companies explicitly recruit women because they are thought to be more compliant and less likely to dispute their working conditions” (11). Women are also increasingly the primary workers in agriculture; as female agricultural workers migrate, they become even more vulnerable to human trafficking and forced labor (11,12).

What are the geographic attributes of those who benefit?

Global supply chains have distinct geography along the dimensions of production, distribution, and consumption (14). Globalization has dramatically changed how manufacturers in particular operate, offering opportunities to reach new customers in new markets while at the same time exposing firms to greater competition. Meanwhile, procurement of raw materials and supplier relationships must now be managed on a global scale (15). Since women who work across these supply chains are located all over the world, the application of this strategy has potentially quite broad geographic reach.

Contribution

Dimensions of Impact: CONTRIBUTION

Investors considering investing in a company or portfolio aligned with this strategy should consider whether the effect they want to have compares to what is likely to happen anyway. Is the investment's contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How much and Who?

Key questions in this dimension include:

Is the investment’s contribution ‘likely better’ or ‘likely worse’ than what is likely to occur anyway across What, How Much and Who?

Applying this strategy will yield a portfolio of investees with comparably more gender-equitable and workers’ rights–protecting conditions in their supply chains. In aggregate, signaling through investment the importance of performance on a range of measures pertaining to the elimination from supply chains of widespread forms of violence and exploitation could shift global practices and improve protections of the rights and well-being of women and others employed in the global supply chain.

How Much

Dimensions of Impact: HOW MUCH

Investors deploying capital into investments aligned with this strategy should think about how significant the investment's effect might be. What is likely to be the change's breadth, depth, and duration?

Key questions in this dimension include:

How many can receive the outcome through this strategy?

By rewarding businesses that have actively sought to eliminate gender inequities and broader human rights violations, the application of this strategy benefits women and otherwise traditionally vulnerable workers in the global supply chain by increasing the number of businesses actively seeking to eliminate harmful and exploitative practices at their suppliers. Purchasing firms need to know about and exert influence over what is happening in their supply chains.

All risks associated with supply chains are important, but it is particularly crucial to look at supply chains through the lens of gender (16). While women comprise 37% of today’s formal workforce in the supply chain, they fill only 15% of top-level positions (17). Women make up a disproportionate percentage of labor in the informal sector (18,19). Thus, a large number of workers would be influenced by this strategy. Statistics on gender and sexual minorities (GSM) in the supply chain remain limited, particularly in emerging markets where these groups face various discriminatory practices, including legislation criminalizing same-sex romantic relationships, which limits willingness to disclose GSM identity.

How much change can beneficiaries experience through this strategy?

Addressing the wage gap can materially improve women’s ability to save for the future, own and control their own financial assets, achieve retirement objectives, and mitigate emergency situations and economic shocks (5,6,7,8). Investing in the productivity of women in the agricultural supply will have particularly high return. For instance, if women had the same access to productive resources as men, they could increase yields on their farms by an estimated 20–30% (20).

Risk

Dimensions of Impact: RISK

Key questions in this dimension include:

What risks do investments in this strategy run in terms of either people/planet experiencing impact or society as a whole? What is the probability that those risks happen?

External Risk

Although investments in this strategy can help reduce gender biases in society over time, target beneficiaries will still be impacted by gender biases that are ingrained in law and/or customary practices and which may keep women and GSM from fully and equitably participating in the workforce, even if an organization is actively promoting gender equality. To help mitigate this risk, organizations can advocate for more gender equitable laws through their engagements with governments and by joining collaborative efforts such as Business Action for Women and HERproject. Safety outside the workplace may also impact the ability to fully participate in jobs that are available, in particular in areas affected by conflict or high rates of crime. In this case, organizations can make provisions to ensure access to safe transportation to and from the workplace.  

 

Execution Risk

There is no one-size-fits-all solution to creating safe and equitable workplaces for everyone. Organizations that fail to appropriately take into account the specific context of their business and needs of their workforce may find their workplace equity policies fail to take hold and/or result in backlash.

What are likely consequences of these risk factors?

Failure to appropriately address these risks can limit the impact organizations are intending to have and, in some cases, create unintended consequences for target beneficiaries and others.

Illustrative Investment

Levi Strauss & Co. are not only integrating compliance standards into their business models but also aim to improve overall working conditions in the global garment value chain and to ensure the well-being of the predominantly female workforce in garment factories worldwide (20). The Levi Strauss Worker Well-being Initiative encourages a high standard of worker well-being across the company’s supply chain by ensuring safe workspaces, including measures to prevent sexual and gender-based violence, and by offering health programs that include access to birth control, menstrual health-management products, and other products and services that address health issues female employees experience (always tailored to a supplier’s individual employees). By 2016, Levi Strauss had expanded this program to 12 countries, impacting almost 100,000 workers in its supply chain. In addition to improved health and well-being for supply-chain workers, Levi Strauss has documented decreases in costs and increases in productivity equivalent to a 4:1 return on investment. Their research is available on their website, as are the materials they use to implement their Well-Being Initiative (21).

Have another illustrative investment we should consider? Let us know!

Draw on Evidence

This mapped evidence shows what outcomes and impacts this strategy can have, based on academic and field research.

NESTA: 2
Gender Diversity, Business-Unit Engagement, and Performance

Badal, S. and Harter, J.K., 2014. Gender diversity, business-unit engagement, and performance. Journal of Leadership & Organizational Studies, 21(4), pp.354-365.

NESTA: 1
Gender Equality and Development

“World Bank. 2012. World Development Report 2012 : Gender Equality and Development. World Bank. © World Bank. https://openknowledge.worldbank.org/handle/10986/4391 License: CC BY 3.0 IGO.”

NESTA: 1
Building Healthy and Equitable Workplaces for Men and Women: A Resource for Employers and Worker Representatives

World Health Organization, Building Healthy and Equitable Workplaces for Men and Women: A Resource for Employers and Worker Representatives, Protecting Workers’ Health Series No. 11, 2011

NESTA: 1
The Power of Parity: How Advancing Women's Equality Can Add $12 Trillion to Global Growth

McKinsey Global Institute, The Power of Parity: How Advancing Women’s Equality Can Add $12 Trillion to Global Growth (2015)

NESTA: 1
The XX Factor: A Comprehensive Framework for Improving the Lives of Women and Girls

The Center for High Impact Philanthropy, University of Pennsylvania. The XX Factor: A Comprehensive Framework for Improving the Lives of Women and Girls (2017)

Each resource is assigned a rating of rigor according to the NESTA Standards of Evidence.

Define Metrics

Core Metrics

This starter set of core metrics — chosen from the IRIS catalog with the input of impact investors who work in this area — indicate performance toward objectives within this strategy. They can help with setting targets, tracking performance, and managing toward success.

Additional Metrics

While the above core metrics provide a starter set of measurements that can show outcomes of a portfolio targeted toward this goal, the additional metrics below — or others from the IRIS catalog — can provide more nuance and depth to understanding your impact.