Introduction

The report examines how gender lens investing (GLI) can accelerate progress towards Sustainable Development Goal 5 (SDG 5) on gender equality. It highlights the need to mobilise both public and private capital to close gender gaps in access to finance, leadership, and economic opportunities. Despite rising interest, only 17.2 per cent of impact funds in Phenix Capital’s Impact Fund Database explicitly target SDG 5, representing USD 56 billion of USD 631 billion in assets under management (AUM). The report argues that applying GLI across all asset classes—public and private equity, debt, and real assets—can strengthen women’s empowerment and economic inclusion.

Evolution of global principles, standards and measurement frameworks

The development of GLI has been shaped by frameworks such as the UN Principles for Responsible Investment, the Women’s Empowerment Principles (WEPs), and the 2X Challenge. Over 8,000 company leaders across 153 countries have adopted the WEPs to advance gender equality in the workplace, marketplace, and community. The 2X Challenge has mobilised USD 27.7 billion in gender-focused investment between 2018 and 2021. However, most funding has targeted women’s representation in companies rather than women-owned enterprises or products for women consumers.

Measurement frameworks, including the Global Impact Investing Network’s (GIIN) IRIS+ metrics, align with SDG 5 targets. New initiatives, such as the Equality Fund’s Gender Lens Investing Criteria and the Standards of Practice for Gender Lens Investing (Criterion Institute, 2X Global, and Aspen Network of Development Entrepreneurs), seek to embed feminist principles and accountability in investment processes. Evidence shows that gender-diverse leadership correlates with better profitability, risk management, and innovation. Studies by the Peterson Institute, IFC, and MSCI have shown that companies with gender-balanced teams perform better financially and face fewer governance controversies.

However, the report notes the lack of a universal standard for GLI, creating challenges in impact measurement and accountability. Critics caution that without stronger frameworks, GLI risks becoming superficial or “impact washing”.

Applications of a gender lens by institutional investors and impact funds: Insights and practices

Institutional investors are increasingly integrating gender factors across investment processes, from screening to reporting. Interviews with asset managers and development finance institutions revealed that investors use gender analysis to identify risks and opportunities, often guided by frameworks such as IRIS+, the 2X Criteria, and WEPs. For example, investors like FinDev Canada, Swedfund, and the Sasakawa Peace Foundation emphasised due diligence on gender impact and reporting.

Challenges persist in obtaining high-quality gender-disaggregated data. Regulatory initiatives, such as the EU’s Sustainable Finance Disclosure Regulation, are helping improve data quality by requiring reporting on gender diversity and pay gaps. Investors also link diversity to performance, viewing inclusive teams as improving creativity and decision-making.

SDG 5 as an impact investing objective: Impact funds’ practices across asset classes

Across 2,440 impact funds tracked by Phenix Capital, only 17.2 per cent target SDG 5. Private equity is the most mature segment, representing 33 per cent of AUM in gender-focused funds. Growth in fund launches peaked between 2020 and 2021. Real assets and public equity funds also demonstrate emerging practices. Case studies illustrate diverse approaches, such as Cross Border Impact Ventures in health, Ilu Women’s Empowerment Fund in microfinance, and the Women in Safe Homes Fund in affordable housing.

Private equity funds invest in women-led enterprises, education, and healthcare, while private debt funds support women entrepreneurs through microfinance and blended finance. Real asset investments address gender gaps in property ownership, agriculture, and housing. Public equity funds, such as Pax Ellevate, apply gender diversity screens and engage companies on pay equity. Public debt examples include gender bonds, such as Symbiotics’ INR 244.6 million social bond in India.

Conclusions and recommendations

GLI is growing but remains underdeveloped relative to environmental goals. While evidence of measurable impact is still limited, progress shows strong potential. The report recommends embedding feminist and intersectional approaches in investment due diligence, prioritising women’s economic empowerment, and ensuring participatory decision-making. Investors should use gender-responsive metrics, commit to transparent reporting, and promote collaboration among financial actors, policymakers, and civil society.

To advance transformative impact, the report outlines ten priorities, including structural change, long-term investment perspectives, and policy advocacy for gender-responsive finance. By strengthening accountability and embedding equality principles across financial systems, investors can play a critical role in achieving SDG 5 and fostering inclusive economic growth.