New research reveals gender blind spot in UK’s multi-million social investment market

Date: 6 May 2016

The Young Foundation (1) has today published a new report calling for government and the wider UK social investment sector (2) to increase their use of “gender lens investing”. Gender lens investing (GLI) uses capital to simultaneously generate financial return and advance gender equality (3).

The research looks at why and how GLI is being used internationally and how the UK currently compares.

It shows despite being a global leader in social investment, the UK has a blind spot when it comes to gender and is losing out on investment opportunities, and in some cases having a negative impact.

It sets out a compelling body of evidence, from sources that range from the United Nations (4) to corporate giants McKinsey (5) that investments that empower women and girls and/or take on gender considerations more broadly, are delivering increased or more secure financial return.

Ceri Goddard, Director of Equality at The Young Foundation and report author said,

“Using a gender lens is not just social investing, it’s smart investing.

“There is no such thing as gender neutral investment and the more investors take this on board the higher the dividend, financial and social.

“Investing in advancing gender equality, whether it’s closing the pay gap or freeing both young girls and boys from unhealthy pressures to conform to media stereotypes would also be hugely positive for us all.”

However the research finds that while the vast majority of surveyed investors strongly agree they have a key role in advancing gender equality, very few are actually using a gender lens in practice.

  • Only one social investor from a national sample says they assess the gender equality impact of their investments.
  • Only 25% of investors consider gender in any part of their planning or decision making.
  • 18% investors collect data on the gender split of the end beneficiaries of their investments.
  • Only 50% of respondents reported they considered any equality issues as part of their decision making process

The main reasons given by social investors for not doing more are a lack of demand from “wholesale investors” such as government and the need for more guidance.

Glenys Thornton, CEO of The Young Foundation said,

“Despite pioneering the field of social investment and sitting at the heart of what is now a multi-million social market the UK is hardly off the starting blocks when it comes to harnessing finance to tackle gender inequality.

“Our research shows that the UK social investors want to do more but need government and other large investors to make clear they want to see this happen and practically support them to change their practice.”

Cliff Prior, Chief Executive of Big Society Capital (6) the UK’s largest social investment bank said,

“We know that gender equality is central to achieving a strong economy and a healthy, happy society.

“With social investment still a relatively new field we have an important window of opportunity in which to integrate a gender lens. It’s one we should seize as both the right and also the most effective thing to do.”

Sara Llewellin, Chief Executive of Barrow Cadbury Trust (7) which financed the research and uses a gender lens in its own social investing said,

“The launch of this new report on social investing with a gender lens is both timely and welcome. Although social investment has been around for several years now it is still, in some senses, in its infancy, which is all the more reason to ensure that a gender lens is applied to it now.

“With the voluntary sector grappling with how, if and when social investment might be an option, this report will be a very useful tool for considering how gender lensing might both increase the effectiveness of social investment but also how it can be used on several different levels to increase social impact and financial return.”

Editor’s notes.

(1) The Young Foundation harnesses the power of social innovation to address the structural causes of inequality. We believe that current levels of inequality are not inevitable and that we collectively have the power to shape the societies and communities we want to live in. Our work is based on research, partnerships and practical problem solving. We work with civil society organisations, business and the state to achieve change

(2) The multi-million social investment market sees investors put money into social organisations or goals such as lowering poverty or crime, but expecting a financial return on this investment. Strongly encouraged by government, it is growing rapidlyi and this is set to continue as public spending, which previously financed most social provision, continues to shrink. Like corporate investors, how social investors conduct their business, what they invest money in, and with whom, determines not only their profit but also their social impact – good or bad.

(3) Gender Lens Investing is a growing global movement focused at the nexus of gender equality and investment markets. In essence it advocates that financial markets, one of the most powerful forces in the globe, can be better harnessed to empower women and girls and advance gender equality while still delivering financial return. For example, by increasing investment in women entrepreneurs, in ventures with progressive employment practice and supply chains and in ventures that deliver goods and services that benefit women and girls and address gender inequality.

(4) The UN has declared “empowering women and girls and gender equality” a global sustainable development goal in its own right.

(5) Mckinsey found that greater gender equality could add 28 Trillion of additional GDP at the macro level.

(6) In 2012 Government set up “Big Society Capital” – the world’s first social investment bank. With contributions from the big four high street banks it receives £600 million of capital to be allocated to social investments Other large social investors, who receive government funds for the purpose of social investing, include The BIG Lottery and the ACCESS Foundation.

(7) The Barrow Cadbury Trust is an independent charitable foundation, committed to bringing about socially just change. The organisation financed the research for this report and uses a gender lens in its own social investing

An abridged version of the report is available if you  click here and a full version featuring detailed information and data is also available.

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