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30 Big Ideas Shaping ESG: Diversity

Funds that champion women-led businesses and gender-balanced deal teams are among the innovations as well as a mentorship scheme.

Mentoring diverse leaders in Africa

Actis

The challenge: Providing effective mentorship to high-performing women and minority groups in emerging markets.

The approach: The growth investor’s scheme, launched to encourage more diverse talent, matches high-performing, high-potential, female portfolio company employees, as well as individuals from minority groups in Africa with senior members of the firm’s own team. These include board members, senior advisors and other portfolio company management. To date, all mentees in the 18 mentoring pairs are African, more than half are female and they represent a range of nationalities.

Actis says: “Academic research and professional studies indicate that mentoring can be a powerful tool for professional development.”

We say: Feedback demonstrates both mentee and mentors are learning a huge amount from the relationship.

Investing with a gender lens

Development Partners International

The challenge: How to enhance women’s empowerment and economic participation in emerging markets.

The approach: With a gender-balanced team, the African investor already has a track record in tackling the diversity deficit that plagues the industry. With its third flagship vehicle it is extending this commitment into new territory. African Development Partners III has been designated the first 2X Flagship Fund in an initiative backed by development finance institutions such as CDC, the European Investment Bank and FinDev Canada. In line with the goals of the 2X Challenge to promote investment in projects that enhance women’s empowerment, DPI will integrate gender considerations into all stages of the investment process to pursue gender smart interventions, increasing the number of women represented at all levels of the portfolio companies.

DPI says: “ADP III is the first 2X Flagship Fund committed to investing with a gender lens.”

We say: As the first fund to align with this new initiative, DPI demonstrates a pioneering combination of ambition and leadership.

The Women’s Economic Empowerment Fund

SEAF

The challenge: How to champion women-led businesses in South-East Asia.

The approach: The emerging market growth investor launched the SEAF $100 million Women’s Economic Empowerment Fund with the goal of improving the living standards of women and their families in South-East Asia. The fund champions gender equality through economic empowerment and the investment of capital, not just in female-owned and led businesses but also women dominated sectors and products. A central pillar is the investor’s Gender Equality Scorecard, which it uses to screen investments and assess portfolio company performance around gender parity.

SEAF says: “The key innovation lies in executing on the premise that women-focused investing is vital to economic and societal development, particularly in emerging markets.”

We say: Following on the heels of the 2017 SEAF Women’s Opportunity Fund, its latest vehicle shows continued ambition to affect real change.

A 50/50 deal team gender balance

WestRiver Group

The challenge: Creating a gender-balanced leadership team.

The approach: At the Seattle-based VC firm, a gender-balanced leadership team is knitted into the fabric of the firm and regarded as a clear a route to generate superior returns. The investment team’s 50-50 structure ensures individuals bear equal responsibility across similar roles; carry and upside is distributed equally across genders; and that everyone shares equal voting rights serving on one investment committee. If one partner leaves, the firm is obliged to find a partner of the same gender.

WestRiver says: “Multiple studies have shown over the past decade that gender-balanced teams perform better.”

We say: By explicitly linking gender parity at the leadership level to financial performance, the firm sits at the vanguard of industry change in attitude and behaviour. That half of its female partners are women of colour cements this lead.