How investing in women can help meet Sustainable Development Goals?


“Overall, we are seriously off-track. Hunger is rising, half the world’s people lack basic education and essential healthcare, and women face discrimination and disadvantage everywhere. One reason for the faltering progress is the lack of financing.” [1]

The bad news first

Progress toward sustainable development is seriously off-track. By 2030, we will need USD $5 trillion — USD $7 trillion to call ourselves successful in meeting the SDGs as estimated by the United Nations Conference on Trade and Development (UNCTAD).

In a recent paper, the IMF estimated that meeting the SDGs in five priority areas — education, health, roads, electricity, and water and sanitation — by 2030 will require additional private and public annual spending of $528 billion for low- and lower-middle-income countries and $2.1 trillion for emerging countries.


The good news next

If we start investing in women and women start investing, we might get there.

There is a huge potential for women investors to change the world. Women control about $30 trillion in global assets, and that number is expected to grow to $72 trillion by 2030. [2]


However, only 10 percent of women globally have any kind of financial asset, and just 1 percent of women in developing countries have shares in listed companies. [3]

There is a big opportunity for women to change the world by investing in companies that have a positive impact on society and the environment. However, women’s financial power has to come from somewhere.




That’s where investing in women comes in.

When women have increased control over resources, they reinvest more in their families and communities. Studies have shown that women are more likely than men to reinvest their earnings in their children’s health, education, and nutrition.

In fact, one study found that if women’s paid employment increased by just 10 percent, it would reduce child mortality by up to 5.

Unfortunately, neither the corporate nor the start-up world has understood this logic.

In corporate,

  • Women receive $10 trillion less in wages than men [4]

  • Globally, women own only $1.5 trillion of the $36 trillion in total global assets, and they control less than 2 percent of the world’s wealth. [5]

  • In the European Union, women make up 46 percent of the workforce, but they hold only 3 percent of top management positions. [6]

  • In the US, women hold 52 percent of all professional-level jobs, but they occupy only 14.6 percent of executive positions. [7]



Source: https://media.giphy.com/media/dpqQNluWFaSpq/giphy.gif

In the start-up world,

  • Only 9 percent of companies that receive venture capital are led by women. [8]

  • In 2017, women received only 2.2 percent of all venture capital. [9]

  • In the US, women own only 36 percent of all businesses, but they control only 4 percent of all venture capital. [10]

Source: https://media.giphy.com/media/3oriNN32IqwTd7fJSw/giphy.gif


So what do we need to do as a society to help women invest more?

  1. Make it easier for women to get started

  2. Encourage women to take more risks

  3. Educate women about impact investing

  4. Help women connect with other women investors

  5. Support women-led enterprises

  6. Create more opportunities for women in leadership positions

  7. Pay women

  8. Promote women in the media

  9. Advocate for policies that support women

  10. Celebrate women investors

References: [1] https://www.ft.com/content/0c0eadc6-f739-11e9-bbe1-4db3476c5ff0 [2] https://www.mckinsey.com/industries/financial-services/our-insights/women-as-the-next-wave-of-growth-in-us-wealth-management [3] https://www.oecd.org/digital/bridging-the-digital-gender-divide.pdf [4] https://ec.europa.eu/info/policies/justice-and-fundamental-rights/gender-equality/equal-pay/gender-pay-gap-situation-eu_en [5] https://www.catalyst.org/research/women-in-the-workforce-global/ [6] https://ec.europa.eu/eurostat/web/products-eurostat-news/-/edn-20210305-2 [7] https://www.americanprogress.org/article/fact-sheet-the-womens-leadership-gap/ [8] https://hbr.org/2021/02/women-led-startups-received-just-2-3-of-vc-funding-in-2020 [9] https://fortune.com/2018/01/31/female-founders-venture-capital-2017/

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