Gender equality and sustainability at the centre of private-sector action
For more than five years, IDRC has been nurturing the movement of businesses and investment funds that pursue social and environmental goals, as well as profit.
This movement is growing in size and significance. For example, the Secretaría General Iberoamericana recently estimated that there were 170,000 purpose-driven enterprises in Latin America, Portugal, and Spain, accounting for 6% of their total economies and employing almost 10 million workers. The Global Impact Investment Network estimated the size of the world’s impact-investing market at US$715 billion (approximately CA$885 billion) in 2019. Its survey respondents reported 12% yearly growth in impact capital investment since 2015.
IDRC supports the production of quality evidence to mobilize business contributions towards the Sustainable Development Goals (SDGs). This research seeks to move beyond socially and environmentally responsible private-sector actions, in favour of transforming the role of business and investment in society. The strands of research support have focused on
impact management and analysis
understanding investor contributions to gender equality, including the care economy
nurturing a healthy pipeline of gender-inclusive businesses
improving the public policies and regulations that these businesses operate in
shaping the next generation of business leaders to advance the SDGs
Tools to measure and manage for positive impacts
For more companies to venture into the sphere of purpose-driven business and achieve their goals, they need decision-making tools and methods to measure whether they are effectively working towards gender equality, inclusion, and climate action.
For example, the SDG Action Manager is an impact management tool available in five languages to help companies understand the impact of their operations, supply chain, and business model on relevant SDGs. It was created with IDRC support by the UN Global Compact and B Lab, the organization that certifies companies as B Corporations, which hold the highest standards of verified social and environmental performance. By May 2021, more than 15,000 companies had accessed the SDG Action Manager and 1,700 had engaged with it in a significant way. B Lab has used the aggregated data from this tool to assess progress towards the SDGs, concluding in a recently released report, that private-sector efforts need to be more ambitious and strategic if the world is to achieve these global goals by 2030.
IDRC has supported the development of several more impact management tools for businesses to identify social and environmental goals and measure progress towards them. The Poverty Stoplight is a self-evaluation survey for employees developed by Fundación Paraguaya. It allows companies to understand their staff’s quality of life and how they can improve it. Another IDRC research partner, SOPHIA Oxford, is incorporating gender in its Business Multidimensional Poverty Index so that companies can design more inclusive plans to reduce poverty.
Focusing on investments with a gender lens
Impact investors are investment funds that seek to simultaneously generate high social and financial returns, and they are increasingly interested in adding gender analysis to their assessment of the companies they invest in.
Intellecap, the advisory arm of an Indian-based impact investor, leveraged IDRC support to document several aspects of gender-lens investing. This approach aims to benefit women as workers, suppliers, or beneficiaries of critical products or services that improve their quality of life. Intellecap reported on the strategies of gender-lens investors across the globe. In Kenya, Rwanda, India, and Indonesia, the team also analyzed business models adopted by women entrepreneurs, the challenges these entrepreneurs face, and how these challenges affect access to capital and support.
Care and domestic work are key barriers to women’s and girls’ empowerment and yet, to date, they have not been a focus for the growing gender-lens impact-investing sector.
Innovative market-based solutions to recognize, reward, reduce, and redistribute care activities are emerging, including business models to provide affordable, high-quality childcare to underserved communities, or to improve labour conditions for care-economy workers. Building on lessons from previous research on the care economy, IDRC is spearheading knowledge generation in this new area of research to document scalable and market-based approaches to transforming the care economy and mobilizing impact-investment capital to allow these businesses to scale their impact.
Building business capacity for impact on gender equality
Key to the success of gender-lens investing is the existence of investment-ready, purpose-driven enterprises that effectively advance gender equality.
The Aspen Network of Development Entrepreneurs used IDRC funding to support six applied research projects that focus on practices, tools, or frameworks to measure and enhance a company’s impact on gender equality and inclusion. Impact Hub, a large accelerators’ network, benefited from one of these grants. Accelerators are programs that provide access to mentorship, investors, and other business support to help grow businesses.
In collaboration with the INCAE Business School, based in Costa Rica, Impact Hub identified how gender differences manifest in every step of acceleration: from design, promotion, and scouting to program delivery. The insights from the research are presented in a toolkit, which the network is now using to understand the challenges that keep women entrepreneurs stuck in the early phases of venture and to remove the gender blindness that limits acceleration.
Another example of IDRC support to grow the pipeline of businesses that contribute to gender equality involves the Gender Smart Enterprise Assistance Research Coalition. Six impact investors formed this coalition to improve how their portfolios of companies integrate gender considerations into their business models.
Building an enabling environment for purpose-driven enterprises
IDRC has forged alliances with researchers, investors, impact businesses, and policymakers to build a conducive ecosystem for purpose-driven businesses and to guide their contributions to social inclusion and climate action.
Government procurement is one important avenue to achieve this transformative effect, because of the large amount of purchasing power that governments wield. Data from the Organisation for Economic Co-operation and Development show that public procurement accounts for approximately 17% of Latin American economies. Building on previous work with the Organization of American States, IDRC is supporting research on how governments can use public procurement strategically, not only to purchase goods and services but also to respond to shortcomings in the economy and society. The Inter-American Development Bank and Sistema B, B Lab’s Latin American counterpart, are also involved in developing case studies, evaluating pilot projects, and producing toolkits on strategic public procurement, including with a gender lens.
A parallel project with the Secretaría General Iberoamericana and the United Nations Development Programme is also exploring ways of supporting purpose-driven business through regulations, tax policy, and new legal forms of business incorporation to enshrine the pursuit of public good in company by-laws.
Next generation of business leaders
The Centre’s long-standing support for Sistema B helped to create a community of practice that brings business, researchers, and academics together to drive change. Their success led to the creation of Academia B, which is now evolving into the B Academics global network. An example of this type of collaboration is the IDRC-supported research led by B Lab and Sistema B documenting the regenerative potential of B Corporations in degraded natural areas, to the benefit of communities that depend on these ecosystems.
Beyond research, Academia B has shown that business schools and universities can play an important role in nurturing the next generation of business leaders through the education they impart.
In addition, Telfer Business School, at the University of Ottawa in Canada, developed Gender-Smart Entrepreneurship Education & Training Plus to make business and entrepreneurial education and training programs more accessible to women. With IDRC support, Women's Economic Imperative is working with this Canadian business school to test and adapt the framework and scorecard in Peru, Mexico, Nigeria, and Kenya.
Another grant supports the Tecnológico de Monterrey in Mexico to review the current higher education curricula in Colombia, Peru, and Mexico on impact investing and business education and training, to foster the growing impact movement in these emerging markets.
IDRC is committed to strengthening the private sector’s role in achieving more sustainable, equitable, and inclusive economies in developing countries. Through research on measurement, gender-lens investing, tools to make businesses more inclusive, policy regulation, and education and training, it is generating quality evidence needed by all stakeholders to realize this goal.
IDRC-supported research is helping to guide the growing movement of purpose-driven businesses and investors toward greater impact.
Knowledge and innovation are generating the tools and strategies that the private sector needs to contribute to gender equality, inclusion, sustainability, and climate action.
Alliances with researchers, private enterprises and investors, and policymakers are improving the environment for impact business, through changes in government policy and university education.