At Convergence, we keep our finger on the pulse of new blended finance research and literature, so we can consider them in our analysis and add them to our Resource Library. Over the past year, we have seen many new reports on gender and blended finance come out. Here are three main takeaways:
1. Industry standards for gender-related impact measurement are becoming more sophisticated.
Measuring and monitoring the impact of investments on gender quality and women’s economic empowerment can be challenging. 2024 saw important developments in this space. One highlight was the release of the updated 2X Criteria Reference Guide. The guide helps investors apply the 2X Criteria, which allow actors to screen and mark deals as 2X-aligned for their internal reporting and tracking purposes. The 2X Criteria are applicable to any kind of investor or financial institution, from impact investors to asset managers, private equity firms, and development finance institutions. As a result, we have seen an increase in the number of blended finance vehicles that apply the 2X Criteria over the past year.
Another highlight was the launch of 2X Certification in September 2024. 2X Certification is an independent, third-party verification process that helps advance gender equity for investors, companies and financial instruments. The certification platform is powered by Equilo, a web-based App.
2. The spotlight turns to investment decision making processes and gender composition of leadership teams.
In the past, many gender related blended funds and facilities focused their attention on collecting and reporting gender disaggregated data on their investee companies, such as the percentage of women among beneficiaries, or the percentage of women-owned/women-led enterprises. Nowadays, “counting heads” at beneficiary level is no longer sufficient to brand your blended finance vehicle as gender responsive. As part of the selection and due diligence processes, it is an increasingly common practice to review the gender composition of the investment teams and senior management, and gauge how inclusive the decision making processes of these teams really are.
In June 2024, Convergence member IPE Global released a “Toolkit for Gender Lens Investing”. Based on the experience of the USAID-supported SAMRIDH Blended Finance Facility, this publication provides tailored gender responsive approaches to investments in healthcare. For example, SAMRIDH’s investment committee has equal representation of men and women, all of whom undergo gender sensitization training to ensure an unbiased selection process. The toolkit identifies several teams (at fund level) whose gender composition matters:
Image: Gender Composition at the Fund level (Credit: SAMRIDH)
3. Moving from short-term to long-term gender outcomes.
The prevailing three to five year funding cycles of donor-supported projects and blended funds can make it difficult to measure changes over a longer period of time. It inadvertently means interventions are designed with a focus on short-term outputs, such as the number of jobs created for women. Yet, if the goal is lasting change and improving the livelihoods of women across the world, we need to shift towards aiming for and evaluating long-term changes in social dynamics and values. The first stocktaking report on Blended Finance and the Gender-Energy Nexus, published by the Catalytic Climate Finance Facility’s Learning Hub, summarized this as follows: “…robust evidence on long-term outcomes of gender lens investing is critical in creating an industry transformation and a paradigm shift in investment practices.”
For more of the latest research on blended finance, visit our Resource Library.
Please view our gender equality page for more gender-related blended finance resources, including stats on gender deals, grant programs, trainings, publications, and more.
