Prologue

-Stephen R. Covey

This book is the result of years of research and analysis, of thoughtful contemplation and discussion, of personal observation and experience. But the idea for the book-the moment when we decided to combine our knowledge and different perspectives on the printed page-came after a joint presentation that was almost a disaster.

We were supposed to meet on several occasions prior to the event to discuss outlooks and approaches, but each attempt proved fruitless. So, the first time we met was on stage. In front of 100 eager audience members. At a Beverly Hills hotel. The topic: Womenomics-or how empowering women can have wide ranging positive social and economic effects. Joe had written widely on the subject for U.S. Trust, the private wealth management arm of Bank of America. Jackie had only recently been hired by U.S. Trust, to build out the firm's impact investing strategy, with a particular focus on an area of expertise of hers: gender.

With no discussion of which points we'd cover, and no idea of how we'd share the spotlight, the old hand and the new hire launched into a rollicking back and forth, quite unlike anything we'd experienced before. With Joe displaying his grasp of facts and figures, and Jackie injecting new angles and subtle counterarguments, we had the audience electrified-and no one had a clue that what was happening on stage was spontaneous. Later, marketing colleagues would dub our performance "The Beverly Hills Hotel Showdown," and remind us to this day that it was one of the best presentations they'd ever seen.

Shortly afterward, we conferred on next steps-and this book is the result.

Why We Wrote This Book

Joe is a global strategist and economist by training, and has long had an interest in womenomics as a driver of global growth and economic development. With a daughter now actively engaged in the workforce, Joe is even more attuned to the gender gaps that exist in the United States. And as a longtime traveler to the emerging markets, he has witnessed the remarkable advancements of women in places like China, Latin America, and parts of Africa-a dynamic, for sure, that remains incomplete. He brings a macroeconomic perspective to women and growth, and firmly believes that in a world struggling to grow, and at a time when many nations face aging populations and shrinking labor forces, countries and companies cannot afford not to fully utilize women as an economic asset.

Trained as a strategy consultant and seasoned as a high-tech executive, Jackie came to the intersection of finance and gender a decade ago. She had helped grow a company through a public offering, then started (and closed) a nonprofit, and was now fully engaged in the emerging impact economy: finding market-based solutions to challenges in education, employment, poverty, and health. Launching a social venture fund while consulting with women's foundations triggered several important questions for her: Why did investors seeking social impact lack the gender lens that philanthropists used? And why were philanthropists avoiding asking more of their investments? What were the possibilities of applying gender analysis across a portfolio? The questions led to research, to product development, and to a seat at the table of an emerging discipline. To her position today as a managing director and investment strategist at U.S. Trust, Jackie brings an entrepreneur's lens of possibility and the experience of reviewing impact investments for a global wealth management platform. She believes that gender equality creates a world that works for all of us.

Gender lens investing-the practice of integrating gender into investment analysis-brings together our expertise and passions. While other books and much of the mainstream conversation speak to growing numbers and influence of women, gender lens investing moves from economic trends to financial strategy.

The time is now for gender lens investing given the mounting case that valuing women drives positive impact, the rising demand for more prudent investments, the maturing field of investable vehicles, and the wave of current cultural zeitgeist.

Women are among the world's greatest underutilized assets, and applying a gender lens allows one to identify companies that recognize this, or uncover the risks of companies that neglect it. A gender lens adds value across the investment community, and the impact reaches far beyond the bounds of portfolios to the economy and society as a whole.

We are far from alone in talking about the role of women in the economy and the enterprises that fuel it. It seems every week brings a new report on women's rising purchasing power, women's heath as the next big investment opportunity, or Japan betting on womenomics to turn the country around. It is no longer a rarity to hear elected officials say, "When women thrive, countries prosper," or to find CEOs holding press conferences committed to "Creating our future with women leaders."

The paradox is that while women are more visible and influential as successful entrepreneurs, corporate executives, and primary family breadwinners, many hurdles remain. Gender-based violence, the absence of women's legal rights, and the persistent wage gap are but a few challenges to be overcome.

We believe there is an unprecedented and underexplored opportunity for investors to productively use their capital using a gender lens.

People are looking for fresh ideas about how to make capitalism work better. Today a growing consensus finds the social costs of global capitalism-financial bubbles in various assets, rising income inequalities, and mounting evidence of damage to the earth's environment-unacceptable. Mainstream investors now see clearly that while the market-based economy often efficiently allocates resources, it is far from perfect.

There is a new type of investor activist emerging. These investors are pushing for greater long-term corporate responsibility. Sure, values and morality matter, but as smart investors they're looking for performance, accountability, and reduction of risk. Institutional investors, hungry for any insights in a rapidly changing world, see that the rise of an increasingly educated, legally empowered class of women affects the future risk and returns of their capital. And individuals, with equal pace, led by women and Millennials, are asking more of their investments. They seek financial returns and social good.

Not only are mainstream investors less resistant to using so-called non-financial measures of performance, many are embracing them as critical to understanding where good financial performance comes from. Just as climate change has become material in investment strategies for all sectors, the critical mass of women in the economy is making gender a material factor.

Few people realize the exciting and varied nature of applying gender considerations to investment decisions. The research base investors demand, coupled with increasing availability of data, has fostered an array of investment vehicles. You will find mainstream exchange traded funds tracking global indices and online loans with no interest. Investors who penned the Women's Empowerment principles are working alongside those newly committed to the power of gender analysis. Skeptics are dipping in toes and advocates are building completely new models. Yes, there is still more discussion than investment, but the field now has a breadth and set of vehicles that deserve to be showcased, invested in, and replicated.

Then there is the matter of the cultural conversations that are taking place on the status of women in society worldwide. Gender lens investing is aligned to today's zeitgeist.

Matthew Arnold, the nineteenth-century English poet and cultural critic who created the term, defines zeitgeist as something more than a prevailing worldview at a given time in history. It's a force that influences events. We see gender lens investing at the intersection of so much movement: women's rights, financial innovation and inclusion, entrepreneurial explosions, and corporation reinvention for the twenty-first century. How do we know this is a part of today's zeitgeist?

Sheryl Sandberg's Lean In ignited a conversation in bathrooms and boardrooms-and especially resonated with her target audience, younger professional women charting their careers. Sandberg's call to "lean in" also elicited some critical reactions from women who felt that "leaning in" was perilous without supportive systems and structures. Corporations have responded to the outcry and, with the leadership of women's scholars like Sylvia Ann Hewlett and her team at the Center for Talent Innovation, things are shifting: Many executives, entrepreneurs, and investors, and others you will meet in this book have begun a journey to gain the competitive advantage offered by including women.

The overwhelming resonance among women of Anne Marie Slaughter's article in The Atlantic, "Why Women Still Can't Have It All," led her to reverse her pledge not to write more on the topic, producing the book, Unfinished Business: Men, Women, Family.2

Slaughter, whose life's work includes mother, wife, tenured professor, international lawyer, Director of Policy and Planning at the State...