18 June 2021 SA GENDER BOND LANDSCAPE REPORT A South African Pre-Feasibility Study By Dr Dlamini et alia
Pre-amble Investing in gender parity can grow the economy and make it more inclusive and resilient. South Africa with one of the highest regional gender equality indexes; has most to gain from gender parity and most to lose of all African states Author’s quote This report was commissioned by UN Women South Africa in support of the Government’s desire to build forward better as part of its COVID 19 Economic Reconstruction and Recovery plan with the women and youth currently being left behind, positioned as key agents of change. The report assessed the possibility of a gender bond as a method of mobilizing significant capital in this regard.
Executive Summary South Africa is a recognized actor in African Feminisms since the 20,000 Women’s March to Pretoria on 9th August 1956 where women confronted Prime Minister J.G. Strijdom on Apartheid pass laws which they and their men had suffered for decades. South Africa currently faces great challenges with respect to gender inequality, most prominent of which is the violence that men demonstrate towards women. Gender based violence in South Africa is at an all time high and dubbed a COVID 19 shadow pandemic. Challenges are opportunities turned inside out. This landscape report takes the high road of opportunity and suggest channels that could include women and girls in the national march towards post COVID 19 economic reconstruction and recovery (ERR). Development indicators show South Africa’s women who led in the March against apartheid laws in 1956 are being left behind in the current ERR march. The Landscape report shows that capital markets can be leveraged to include them and the youth of South Africa, Despite COVID-19 having worsened the burden of care for women, investment in women is not strongly reflected on the COVID-19 Economic Reconstruction and Recovery Plan (ERRP), whereas gender responsive planning could be used to move SA from care crisis to opportunity. There is opportunity for gender mainstreaming both in the National Budget and in the ERRP, with the success of efforts contingent on the participation of women in the fiscal planning; increased availability of gender disaggregated data as well as the smart and sustainable use of capital instruments such as bonds. The landscape report indicates that a sole focus on the bond instrument may not be enough. A broader SDG lens is required. In assessing the feasibility of a gender bond in South Africa, it was found that the gender bond market is a small share of the bond market and more momentum that exists is related to green bonds tagged to infrastructure projects. The landscape report recommends the pursuit of a broader sustainability frame under which gender bonds and other capital market products would fall. The launch and quick uptake and advancement of the green bond market in South Africa and other SDG related investments could be leveraged this way. Given South Africa’s widening fiscal deficit, this landscape report recommends a combined commercial and concessionary Sustainability Plus Facility (SPF) which positions GEWE as a catalyst to and booster of sustainable socio-economic development as measured by 2X gender finance and UNDP’s SDG investment indicators. STRICTLY PRIVATE AND CONFIDENTIAL 3
Table of contents 1. INTRODUCTION This section provides the background to the report and a summary 2. AGENDA ITEM 02 3. GENDER RESPONSIVE BUDGETING This section reviews planning for gender priorities from a fiscal and 3.financial perspective incluAdiGngECNODVIAD 1IT9 EEcMono0m3ic Recovery THE NATIONAL LANDSCAPE FOR GENDER BONDS This section distills insights from existing social impact, green and gender bond market globally and in South Africa 4. FINDINGS This section presents key findings from the desktop review and stakeholder interviews that informed the report’s recommendations 5. RECOMMENDATIONS This section outlines the recommendation for a deficit neutral gender bond, it’s structure and gender priorities to be funded
“The seeds of success in every nation on Earth are best planted in women and children.” Ex President Joyce Banda Section 1 This section is in two parts Introduction A. The methodology used for the report B. The status of gender equality in South Africa as a backdrop to the rest of the report.
The Brief Introduction Terms of Reference of SA Gender Bond Landscape Report ▪ UN Women’s (UNW) Strategic objectives as part of the UN Country Team in South Africa work towards: the elimination of discrimination against women & girls; the economic empowerment of women, and the achievement of equality between women & men as partners & beneficiaries of development, human rights, humanitarian action & peace & security ▪ UNW is supporting the Government of the Republic of South Africa regarding the feasibility of issuing a deficit neutral Sovereign Gender Bond (SGB) − Based on the findings of a study (“the Study”) by Lions Head Global Partners (LHGP) commissioned by Financial Sector Deepening Africa (FSDA) and UNW a two part SA Gender Bond assignment was commissioned. ▪ Part 1: A Country specific Analysis of gender priorities with the objective of determining which national priorities align with the SDGs and which are most appropriate to fund through a designated gender bond ▪ Part 2: Develop a detailed Gender Bond proposal: Part 1- Landscape Report Task List − This Landscape fulfils the requirements of Part 1 - A Country specific analysis of gender priorities with the objective of determining which national priorities align with the SDGs and which are most appropriate to fund through a designated gender bond − Consultants to conduct detailed review of the Landscape of the SA market for Gender Bonds including: Review of Governments gender priorities, policies, and programmes by Ministry (** if these are not clearly articulated and collated as part of the National Development Plan, National action plan and relevant government documentation containing commitments to gender equality, mapping of these policies and programmes and their key performance indicators (KPIs) against the National Action plan (or similar planning document if not already done by government), South Africa’s current fiscal framework and the medium-term debt trajectory (the ‘active’ scenario) ; commitments to sustainability; Legal frameworks for debt issuances, existing Social/ Green bonds in issuance in country (or region?) + relevant frameworks used. Indicators of success/ challenges, Gender Responsive Budget (GRB) practices STRICTLY PRIVATE AND CONFIDENTIAL 6
Methodology REPORT 1. WRITING DESKTOP 1 Desktop Review REVIEW 2 Consultations 3 Analysis 2. 4 Landscape Report CONSULTATIONS STRUCTURIN G
Method of Analysis of Qualitative Responses Grounded Theory Method – open, axial and then selective coding to extract key themes Axial Coding –the themes (categories) are compared with each other, by identifying the indicators 1 3that relate closely with each other. OPEN CODING 2 SELECTIVE CODING Open Coding – entails AXIAL CODING reading through data Selective Coding – and picking up themes where all the themes (categories) that emerge. The themes (categories) are combined together to are then compared and obtain a general idea. contrasted
Section 1B The sub- section reviews progress on gender equality and women’s Gender empowerment (GEWE) in South Africa Equality in South Africa South Africa’s progressive legislative and policy framework in respect of gender is reflected in that fact that it is 4/87 countries on the 2012 Social Institutional and Gender Index of the Organisation for Economic Co-operation and Development There have been notable improvements in the socio-economic empowerment of women since the apartheid system came to an end, despite gender disparities persisting. The Challenges South Africa currently faces with relation to the inequality of women are believed to be residual effects of apartheid, which was premised on violent exclusion based on race, class and/or gender. South Africa has the highest rate of rape in the world of 132.4 incidents per 100,000 people (World Population Review, 2020). A woman is more likely to be raped than learn to read.
Gender policy framework South Africa has made many legislative improvements General Economic Empowerment Gender Based Environment Health Violence National Development Plan Women’s Financial Strategy Towards Gender Sanitary Dignity Framework Vision 2030 (NDP) Inclusion Framework Emergency Response Action Mainstreaming in the (2019) (2019) Plan on Gender-Based Environment Sector (2016- South African National Policy Codes of Good Practice Violence and Femicide (2020) 2021) National Contraception Policy Framework for Women’s (2007) Guidelines within a Empowerment and Gender Policy Framework to address Mining Reproductive Health Equality (2000) Energy Gender-Based Violence in the Broad-Based Socio-Economic Framework (2001), Ppst-School Education Empowerment Charter for the The South African Department of Energy Training System (2020) South African Mining Industry National Contraception Reconstruction and Recovery Policy Framework for Service Delivery Guidelines Plan Women Empowerment and National Policy Framework on Local Government (2003) Gender Equality (2016) Management of Sexual Offences Management (2012) National Contraception and Fertility Planning Policy and Gender-Responsive Planning Human Settlement Service Delivery Guidelines (2012) Framework on Gender-Responsive Planning, National Women Settlements Programme: Budgeting, Monitoring, Evaluation and Framework for the Empowerment and Gender policy Framework for Local Government (2011) Auditing Participation of Women in Human Settlement Delivery (2009) See more detail in the Annex 10
South Africa’s Gender Machinery is best in class This makes for a solid start South Africa’s progressive legislative framework in respect of gender is reflected in that fact that it is fourth (4) out of eighty seven (87) countries on the 2012 Social Institutional and Gender Index of the Organisation for Economic Co-operation and Development (Statistical South Africa Gender Statistics, 2015, IV). The Global Gender Gap Index ranks South Africa 19th out of 149 countries (World Economic Forum, 2018 Gender equality is one of the Sustainable Development Goals (SDGs) that form part of the NDP’s Vision 2030. South Africa’s National Development Plan (NDP) aims to eliminate poverty and reduce inequality by 2030 through uniting South Africans, unleashing the energies of its citizens, growing an inclusive economy, building capabilities and enhancing the capability of the state and leaders to work together to solve complex problems. Gender responsive budgeting is the means by which the government plans priorities and re-allocates its resources to meet its commitments to women. SA’s Gender Policy Framework establishes guidelines for South Africa as a nation to take action to remedy the historical legacy by defining new terms of reference for interacting with each other in both the private and public spheres, and by proposing and recommending an institutional framework that facilitates equal access to goods and services for both women and men called the National Gender Machinery. The Gender Machinery advances the “basic needs” approach to women’s empowerment and gender equality to ensure that government approaches these challenges in an integrated manner and avoids piecemeal impact. The Department of Women Children and People Living with Disability (DWCPD) handles the monitoring and evaluation of impact on women. 11
South Africa’s Gender Machinery Although South Africa’s National Gender Machinery is universally acknowledged to be a “best practice,” the lack of skills, resources, and integrated co-ordination framework with clear lines of communication and accountability is likely to render it ineffectual, limiting the achievement of gender parity aspirations 12
The SA Gender Equality Opportunity South Africa’s Gender Equality Challenges are Opportunities Turned Inside Out • The South African labour market is heavily racialized and gender-biased towards white men maximizing earnings. The largest contributor to overall income inequality came from the labour market at 74,2% South Africa is ahead of the pack at 0.76 Gender • In 2018, female labour participation rate was 52.9% compared to 65.5% for men. parity score (GPS). • Women and girls have been excluded from ownership and control of the economy and According to Mckinsey Global Institute’s 2019 access to productive resources, including land. power of gender parity in Africa report; the o Women own 17% of land compared to 46% owned by men (November 2017 Land economic case for gender parity in Africa is $316 • Audit Report). billion or 10% of GDP by Women, particularly women in rural areas and in poor urban and informal settlements, 2025 face inadequate access to basic services such as water, sanitation, energy and • transport. Black women, are the main target of triple marginalisation ‒ race, social class and sexism in South Africa. They are often worst affected by a lack of access to decent education (from primary to tertiary education), quality health care, public safety and • information and communications technology and most vulnerable to climate change GBV is at horrific levels killing a woman every four hours, raping 50,000 women a year and 200 cases are reported daily- all perpetuated by patriarchal norms and practices. This threatens mental health and subdues productivity Power of parity in Africa Report, 2019 13
GBV threatens South Africa’s Gender Parity Gains Gender based violence is a shadow pandemic in South Africa o •South Africa is considered the rape capital of the world “ The UN study conducted South Africa has the highest rate of rape in the world at 132.4 incidents per 100,000 people according to the in Sub-Saharan Africa at World Population review 2021. Reported domestic violence is on the rise the start of COVID 10 • Intimate femicide is five times the global average. One woman is killed every 3 hours in SA showed that domestic • Of reported rape cases, only about 14% goes to trial and there are convictions in only about 7% of these violence, whether physical • cases or verbal, increased from GBV disproportionally places the costs of violence on the shoulders of victims or the state and therefore 40.6% before the COVID-19 crisis to 52.2% during the • reduces resources that can be accessed by victims or spent by the state. pandemic crisis, a rate of There is a chronic underfunding of shelters. A 2017 report of the Heinrich Bohl Foundation on shelter funding increase of 12%” for the Western Cape showed that only 1% of the R1.3 billion budget of the Department of Social Sources: Prof Gouws is the Research Development went to the Victim Empowerment Programme Chair in Gender Politics at Stellenbosch University and UN o What is being done about GBV in SA is not yet working Women et al Gender Based Violence • The 2016 #EndRapeCulture and the 2017 #TotalShutdown campaigns in Africa During COVID 19, Policy • On February 4, 2021, President Ramaphosa virtually launched a private sector-led, multi-sectoral Gender- Paper Based Violence and Femicide (GBVF) Response Fund aimed at supporting the implementation of the 14 National Strategic Plan (NSP), and the wider GBVF response in the country; after a 2020 UN Women o • coordinated National elimination GBV national summit COVID 19 shadow pandemic has exacerbated an already disheartening GBV situation in SA Official reports show that within the first week of level 5 lockdown, South African Police Services (SAPS) received 2,320 complaints of gender-based violence, with only 148 related charges made. These statistics represent a 37% increase from the weekly average of South African GBV cases reported for 2019.16 A
COVID 19 threatens South Africa’s Gender Parity Gains Women, especially black women single headed households bear the brunt of COVID 19 • South Africa has Africa’s largest Coronavirus Disease 2019 (COVID-19) caseload and a rapidly “Side-lining women • accelerating outbreak holds back economies from growing and Even before the pandemic, women already earn 2X less than male counterparts, on prospering. The average, and women-led SMEs had lower access to financial capital to invest in their economy cannot business operate at its full potential with hurdles • Women’s higher rates of employment in service industries (e.g., domestic work and retail) puts for half of the world’s population. Gender them at higher risk of COVID-19 due to social intensity parity is not only a fundamental human • While women only make up 39% of global employment, 54% of job losses during COVID-19 right but also a critical economic opportunity” have been by women: – OECD ▪ COVID-19 is increasing the burden of unpaid care, which is predominantly carried by 15 women - some women are forced to leave their paying jobs • ▪ Women predominates in unskilled jobs and jobs vulnerable to lockdown COVID-19 impacts for children are also considerable: ▪ Schools and pupils without reliable data connection are at a greater risk of education fallout, especially from low-income background ▪ Children reliant on school feeding schemes for meals faced malnutrition with school closures
COVID 19 has worsened SA’s youth unemployment crisis Women, especially young black women bear the brunt of COVID 19 unemployment South Africa Female (Blue) and Male (Black)Unemployment Rates 2016-20 South Africa is amongst the most unequal societies globally. most black South Africans live in poverty and their average per capita Sources: Diagram Statista and Facts Maryana Iskander, CEO of Harambee Youth Employment incomes are roughly one-fifth those of the historically privileged Accelerator, 2021; South Africa: Current Issues, Economy, and U.S. Relations, 2020; white minority. Black people make up 80.8% of SA population of 60 million people Of the three million job losses in South Africa as a result of Covid- 19, two million (two-thirds) were held by women. Women in the informal sector have been the hardest hit don job loss during South Africa’s lockdown. The SA youth unemployment rate is 56% and of that women bear the brunt Covid-19 exposes the staggering inequalities and barriers that women (especially black and young) face in finding, and keeping, work. Ar the height of South Africa’s lockdown in mid-May 2020, employment rates for young men fell from 30% to23%, and for women from 23% to 18%. When South Africa eased lockdown regulations, employment for men rose close to pre-lockdown levels while employment for women remained at 18%, further widening the gap. Listen to young SA Women Here 16
Gender equality as an economic recovery booster The gender equality economic opportunity of all times ▪ Gender parity is an under leveraged ERRP 17 booster. ▪ South Africa is trying to find ways to manage itself back into a more positive and prosperous economic outlook through a COVID 19 Economic Reconstruction and Recovery Plan (ERRP). ▪ The ERRP is gender vague (mentions in passing) ▪ The latest Accenture (NYSE: ACN) research shows that upskilling more women, creating a culture of equality, accelerating and leading the change the country could unlock R319 billion in GDP which would be the single largest source of economic growth in South Africa ▪ The inclusion and empowerment of women & girls should and could be a bigger part of the ERRP solution. Power of parity in Africa Report, 2019
Section 3 ALIGNING GENDER PRIORITIES TO PLANNING Gender Responsive This section assesses how well gender priorities are Budgeting reflected in fiscal and financial planning in South Africa (GRB) SUMMARY This section is divided into 4 parts 3.1 Austerity and Debt 3.2 National Budgeting – where are the women? 3.3 Gender Responsive Budgeting (GRB) 3.4 Gender Responsive Covid-19 Economic Recovery Plan
In South Africa COVID 19 has worsened an already fragile economic outlook · Continued fiscal consolidation in the 2018, 2019 and 2020 budget coupled with the forthcoming years’ paint a grim picture even though fiscal reacted forcefully with a R500 billion COVID 19 recovery stimulus · package Debt has risen to 80% of GDP in 2020 and could exceed 100% by 2022. The government employee · wage bill also remains high at 12% GDP and tax collection sub-optimal Treasury projects economic growth of 3.3% and 2.2% in 2022 from a base of -7.2 % in 2020 when · COVID 19 hit. The 2020 recession followed a decade of modest growth South Africa’s high unemployment rate hit a record high as COVID 19 hit particularly amongst women · and youth according to IMF (2021) Inequality continues to be amongst the highest of advanced economies. 20% of households earn 1.7% ·· of total income (OECD, 2021) Most of ¾ of the population is exposed to harmful levels of air pollution Unreliable electricity supply constraints COVID 19 economic recovery and triggered operation Vulindlela · (open the way) to address this issue Government's economic recovery plan includes a comprehensive health response intended to kick start · economic recovery South Africa has a sound macroprudential regulations and a robust financial system. Financial · institutions continue to be highly capitalized The time is now to combine the economic upside of gender parity and capital markets in SA for economic recovery (Source OECD 2021) 19
What is Austerity? SA’s austerity budget? Austerity is a fiscal policy aimed at helping There is an insistence that the current budget is governments return to financial health. It may not austerity and yet: feature: ？ Sin tax increased to compensate for corporate • Increased government revenue through and high-income earners tax relief to increase increased income tax revenue ？ Capped social spending • Reduced non-essential government spending, ？ Non-interest spending remains steady, about typically through cuts or freezes to: R1.56 trillion over the 21/22 MTEF; however, it o government services and infrastructure will decline as a share of GDP from 29.2 development percent to 26.2 percent o public sector salaries / pensions and hiring ？ New priorities to be funded o government subsidies ？ No significant budget increases to improve socio-economic rights ？ Decline in public investment in infrastructure development SA Treasury Budget Review 2021 STRICTLY PRIVATE AND CONFIDENTIAL 20
SA’s Austerity • Applying a gender intersectionality lens to an & Gender Equality austerity, contractionary budget raises the Catching the 2 concern that already economically (both genders) to grow marginalized groups; poor, black, disabled, the economy women and girls (orphaned and abandoned), living in rural areas will be the • most affected Austerity does not make for a good fiscal climate for GEWE investments and yet from earlier forecasts of billions that could help • grow the economy (catch 22) Important given constraints that government is assisted in converting gender equality commitment into the lived reality of South African women and girls • Gender parity can help grow the economy • A gender analysis of the budget & the COVID 19 ERRP could give clues 21
Legal argument for prioritizing gender equality even in times of austerity A gender intersectional approach towards women’s empowerment will be the most accepted SA Bill of rights Government has an obligation to Thus, the governments obligations are: protect the most marginalized and and gender vulnerable in our society Moving forward. Government cannot take steps intersectionality backwards, e.g., reducing the quantity and/or level of - This requires knowledge and service provision recognition that individuals experience multi-simultaneous oppressions Intersectionality. If large numbers of people are not accessing their rights including women, it will be The International “All human rights impose three types of assumed that government is not doing all it can obligations on States - respect, protect Covenant on and fulfil human rights” Social protection. Government must give explanations Economic, Social for budget decreases that affect the progressive - Which the state must fulfil to the achievement of socio-economic rights of the & Cultural Rights maximum of its available resources marginalised (ICESCR) Partnerships. Government must seek the support of international institutions, other governments, the private sector and donors during crises in order to raise revenue and deliver services See Annex for example of a Legal Judgement 22
Gender Responsive Budgeting (GRB) in SA South Africa was the first African country to join the Commonwealth’s Women Budget Initiative (WBI) and has been producing reports annually since 1995 on whether the government budget and fiscal policy promotes equity between women and men, boys and girls and other marginalized subgroups. The WBI also concerns itself with the intersectional forms of discrimination like race, age, disability etc. Although the GRB process was externally initiated the government later took this up as well. The externally driven process, known as the ‘Women’s Budget Initiative’ (WBI), was spearheaded by NGOs, academics and a group of parliamentarians (Commonwealth Secretariat, 1999). A distinguishing feature of South Africa’s gender-budgeting is its location within and outside government. In 1997, National Treasury started government’s parallel GRB initiative, which unfortunately lost momentum soon after its introduction which affected the non-governmental impetus. Before things slowed to a halt a Parliament/NGOdriven WBI made several inputs into analysing government budgets and demonstrated that a GRB public –citizen partnership could work. In the first three years, this JV evaluated budgets of 27 national portfolios using set criteria (Budlender, 2005; Sharp, 2003; Budlender et al., 2002a; Budlender et al., 2002b). The WBI used such research to lobby for gender-sensitive policy changes. WBI made its final budget review in 2002. Since then, South Africa has introduced a participatory budget initiative called the Estimates of National Expenditure (ENE). The ENE publications present the details of national government’s expenditure estimates for the three-year expenditure framework period. The ENE provides extensive information on the priorities, spending plans and service delivery commitments of government, as well as its associated agencies in a simplified form. The aim is to foster government’s accountability to citizens for public funds being spent on intended outcomes. According to the 2019 ENE R300 million was set aside for women to be managed by combination of the Presidency as Executive Authority and the Department of Women, Child and Persons with Disabilities. 23
National budget – where are the women & girls? Government’s commitment to gender equality, can be assessed through a budget analysis of ministries, departments, programmes, projects, initiatives that give effect to the number of gender-specific policies and laws that government has committed to R678.8 million is earmarked to continue rolling out free sanitary products for learners R678.8 M from low-income households through provincial departments of social development and basic education The Economic Reconstruction and Recovery Plan: 40% set aside for women in public 40% procurement and infrastructure development, legal remedies to close the gender pay gap, women’s participation in economic sectors, access to assets and women’s financial inclusion Women in infrastructure: The Government has committed to R791.2 billion infrastructure R791.2 B investment drive, with partners in the private sector, to rollout infrastructure through initiatives such as the blended finance Infrastructure Fund Department of Small Business Development is allocated R4 billion for township initiatives R4 B over the medium term, including blended finance initiatives – not clear how much for women 24
GRB Opportunities Planning happens every three years (Mid Term Budget) and there is an annual review Key Budget 4 Budget Oversight: 1 Budget Formation: Key Budget Documents: These key budget Documents: Executive’s budget proposal; documents, unique to each Audit reports; The budget accounts are The executive formulates Mid-year reports; process in the budget cycle, Mid-year reports; audited, and audit findings are the draft budget. Supporting budget reports provides information crucial Legislative Audit for gender-responsive Committee reports reviewed by the legislature, Key Budget planning, budgeting, which requires action to be Documents: monitoring, evaluation and taken by the executive to Budget law; auditing Reports of legislative correct audit findings. budget committees Key stakeholders throughout the budget cycle The budget cycle 3 Budget Execution: 2 Budget Approval: will demand highly credible, Key Budget The executive collects The legislature reviews and •evidence-based research: Documents: revenue and spends amends the budget- and then National Treasury, in In year reports; money per the allocations particular, will want Mid-year reports; made in the budget law. enacts it into law. information on revenue Year-end reports; raising, sustainability Supplementary budgets • and viability Parliament will value costing of the proposed policy, programme, project, or initiative 25
The Economic Reconstruction and Recovery Plan The GRPBMEAF DWYPD’s “Status Report on the Extent to which Women are Benefitting from COVID-19 Related Public Expenditure” in December 2020 has shown that there is considerable spending towards meeting women’s needs during COVID-19 pandemic. 18 million women have benefited from social and economic relief spending R47.5 B • 24% of beneficiaries of The Social Relief of Distress Grant are women, and received R44 B in social relief • 98% of The Caregiver Grant beneficiaries are women, receiving R 3.5 B R17.1 B Economic relief includes Spaza Shop Support Programme (52% women), SMME Debt Relief Facility (33% women), The Compensation Fund (82% women), TERS, in economic relief Agriculture Relief Fund and Sports, Arts & Culture relied amongst others However, there are still gaps in the data where some indicators are not reported regularly or signed-off by authorities, while others are not disaggregated by gender, making it difficult to accurately quantify how much women are benefiting from the R500 billion in relief funds and other COVID-19 related public expenditure and procurement. A Gender Responsive Planning, Budgeting, Monitoring, Evaluation and Auditing Framework (GRPBMEAF) aims to address this gap. 26
The Economic Reconstruction and Recovery Plan An opportunity to build forward with a care economy? COVID 19 has exacerbated the burden of care on women. This could be turned in to an economic opportunity • A growing body of evidence shows that at times of low growth, high unemployment and pervasive underemployment, public investment in social infrastructure and the right mix of gender equality policies can drive inclusive economic growth and women’s economic autonomy. • Building forward better from COVID 19 should include a care economy that will convert women’s efforts into to increased family income • The COVID 19 pandemic is not just an economic crisis, but it is also a health and social crisis. • The massive role that women as homemakers and caregivers in families, and as participants in the informal and insecure economy in South Africa, has been well documented and is acutely seen in the pandemic’s impact on women’s livelihoods. • Women are forced to use their skill, time teaching and caring for children, looking after sick or elderly relatives, ensuring that domestic work is conducted for no pay in patriarchal markets; South Africa included. • With limited economic participation, compromised income, the inability to raise emergency funds, and heavy dependence on loans from family and friends, the emerging COVID-19 Tracker Data indicates that the pandemic is disproportionately reducing women’s financial resilience. • ITUC research shows how public investment in paid care jobs provides women with independence to find and keep jobs in other sectors or be paid for the work they disproportionately do, through formal employment in the care sector 27
ADVOCATING FOR GENDER RESPONSIVE COVID-19 ECONOMIC RECONSTRUCTION AND RECOVERY PLAN Examples of how women can participate Gender-based violence Financial inclusion and access to digital services Develop budget and KPIs to support the plan Strengthen women’s access to finance, mandatory currently in place reporting of sex-disaggregated data by all financial Ownership institutions is an important catalyst Transform ownership patterns and providing Housing access to assets, e.g., land Protect women against housing evictions Social security Increase social security grants with inflation Legal remedies to close the gender pay gap Protect women against housing evictions Care-taking facilities Supporting early childhood development (ECD) Programmes and community health across private and public Provide clear articulation of how the government sectors budgets give effect to announced plans, develop accountable monitoring frameworks to evaluate progress in gender responsive budgeting
Summary | Gender equality in South Africa · South Africans, especially women are facing increasingly poor indicators in health, education, GBV, social welfare and protection, access to the economy and land access · This is happening on the back of a struggling economy, with rising debt, poverty and unemployment · Women’s participation in decisions that affect their money, taxes development outcomes is crucial for economic recovery and growth · In budget decisions there are winners and losers – women influencing prioritization and negotiating for their needs is important as when they win everyone does · An intersectionality lens will go a long way in ensuring that the most marginalized and vulnerable populations are prioritized 29
Section 4 This section assesses the feasibility of gender bonds in South The national Africa based on the priorities already surfaced, market conditions, landscape and options available for bonds. It starts with an overview of for gender Social Impact Bond (SIB) and Sustainability Bond market globally bonds and then in South Africa after a review of the genesis of the landscape study; and ends with matching opportunity for large scale capital and gender priorities : • Overview of SIBs • Global SIB market and trends • South African SIB market and trends • Social bond models in South Africa (traditional vs pay- for-success model) • Overview of Sustainability bonds (a.k.a. green bonds) • Sustainability bonds in Africa and globally • Sustainability bonds in South Africa STRICTLY PRIVATE AND CONFIDENTIAL 30
The FSD Africa and UN Women Africa Gender Bond Landscape Study The nascent impact bond market has ben gaining traction in sub-Saharan Africa (SSA), with efforts to develop green bonds receiving strong support from DFIs. According to a study by FSD Africa, which compared gender bond markets in SSA, the South African market is a prime market for gender bonds, as it meets the selection criteria employed by the study. A gender bond is yet to be issued in SSA: A working debt capital market Strong institutional investor interest Availability of pipeline opportunities SA has a relatively established debt capital There is already an established themed SA has access to assets or activities that market amongst countries in SSA, with: bond investor base that is conscious of can be labelled as gender positive, o Diverse product offering social issues including women’s products and service o A regulatory environment that enables providers, and women-led/owned incorporation of ESG in investment businesses decisions While banks’ considerable loan books make them the most likely issuers of themed bonds, they require commercial benefit. Government willingness to play a significant role focused landscaping on maximizing social impact as opposed to commercial gain in. this pre-feasibility landscaping approach 3131 STRICTLY PRIVATE AND CONFIDENTIAL
Overview of Impact Bonds Bonds are typically differentiated As of August 2020, the global bonds market was approximately $128 trillion3 either by use of proceeds, guarantor • Sovereign, supranational & agency issuers accounted for 68% or US$ 87 or issuer: trillion • Corporate issuers accounted for 32% or US$ 32 trillion SDG bonds by use of proceeds: • Green Bonds, targeting environmental As of July 2020, the African bond market is estimated at ca. US$ 1.15 trillion3 impact • African supranational, sovereign & agency issuers accounted for • Social Bonds, targeting social impact approximately 87% or US$ 1 trillion (including gender equality) • African corporate issuers accounted for approximately 13% or US$ 150 • Sustainability Bonds, combining the above billion • South Africa accounted for 39% of the African bond market Bonds by guarantor (responsible for repayment): • Africa accounted for less than 1% of the global bond market, based on July • Organisation, including sovereign, backed & August 2020 estimates bonds • Asset backed bonds As of 2019, cumulative Green Bond issuances were estimated to be US$ 776 billion2 • Combination of the above • Africa accounted for US$ 2.7 billion or 0.3% • South Africa has led green bond issuances in Africa Bonds by issuer: • Sovereign, supranational & agency bonds As of August 2020, an estimated US$ 3.4 billion of Gender Bonds were in issue, • Corporate bonds representing a negligible proportion of the global bond market & also much smaller than the nearly US$ 1 trillion Green Bond market Sources: 1. Green, Social and Sustainability Bonds, PIMCO, 2021; 2. Types of bonds, Climate Bonds Initiative, 2021; 3. Bond Market Size, ICMA, 2020 32 STRICTLY PRIVATE AND CONFIDENTIAL
Overview of Social Impact Bonds (SIBs) Definition and characteristics SIBS are a classical form of blended finance – catalytic in nature and brings together “public, philanthropic and private capital together to explore specific opportunities to achieving sustainable economic growth in global growth markets” An SIB is a contract between the public sector and investors, in which repayments are based on improved social outcomes from activities funded by the SIB. But improved outcomes are not guaranteed and measurement is difficult, thus, returns are uncertain They target a variety of social issues, including criminal justice, homelessness, child welfare, early childhood education, and youth development. They can include Green Bonds Background • SIBs were pioneered by Social Finance, UK, in 2010. Since then, more than US$ 300m has been mobilised in more than 24 countries around the world Sources: Social Impact Bonds, Social Finance STRICTLY PRIVATE AND CONFIDENTIAL 33
Global Social Impact Bond market and trends SIBS Across the World1 ▪ As of March 2020, there were 18 Social Impact Bonds contracted across 14 developing countries 34 − 7 overall in Africa across 7 countries − 2 in South Africa, focussed on Early Childhood Development and Employment Creation 1. Source: Brookings Institution Global Impact Bond Database, February 1, 2020 STRICTLY PRIVATE AND CONFIDENTIAL
South African Social Impact Bond market and trends Only two SIBS have been issued to date, the Early Childhood Development bond and the Youth employment bond. An AGYW1 SIB has been Proposed by the South African Medical Research Council targeting health & social challenges specific to adolescent girls & young women Yea Valu Rationale What the SIB did What the SIB Achieved r e • 40% of people aged 15 to 34 lack • Provided upfront capital to the • 600 people placed between April The youth • $1.47m employment, education or training service provider to identify job & December 2018, 61% were employment • 2017 opportunities & training for 600 women bond • This rate is higher for young women at 43% versus 35% for excluded young people • A further 5,400 young people to Early young men • The model is to be scaled-up over 3 be placed from July 2019 to June childhood • 201 development 8 • As of Q4 2018, 60% of years after the 1st year, with 2022 unemployed people had not investors recycling their capital & graduated from secondary school commit to larger funding over the scale-up period • $22.7 • 4 m children (<6yrs old) living in • Funded a home visiting programme - m poverty do not have access to aimed at improving the cognitive- quality Early Childhood and socio-development outcomes of >2000 childre- n, aged 3 to 5, in Development services with the Western Cape persisting low investment from public and private sector 1. Adolecent, girls and young women 35 STRICTLY PRIVATE AND CONFIDENTIAL
Deep dive | The Youth Employment SIB Bond characteristics Year 1 Years 2-4 Launched in April 2018, the Youth Employment SIB has benefited Beneficiaries 600 young people meeting the outcome 5,400 young people meeting the outcome 6000 young South African and metrics below: plans to scale up over three years Outcome metrics 1. South African citizens ages 18-35 in a poor household with no or low income, and in need of a work Interest is serviced quarterly, Upfront capital readiness intervention principal is a bullet-payment in Outcome June, 2022. Outcomes are tracked payments 2. Sustainable, quality employment-contract at least 12 months (or 24 months in the case of payments from the periodically & form the basis of Intervention Jobs Fund) servicing the obligations Service provider Employment contract must be in place to trigger outcomes payment According to the Brookings Outcome funders Institute: Intermediary R34 million ($2.42 million) R86.9 million ($6.21 million) • Service provider capacity & Investors R38 million ($2.71 million) R270.5 million ($19.3 million) ability to track performance is key Evaluator • Using a market diagnostic to identify growth sectors that have the capacity to absorb youth labour, and • The key stakeholders need to understand the problem they forming coalitions with the relevant players are trying to solve & establish the appropriateness of a SIB • Identifying and executing alternative pathways to train your people • A progressive model allowing for demonstration of capacity to • Securing job placement perform can be helpful • Harambee Academy 36 • Harambee Academy • Explore Data Science Academy • WeThinkCode • Yellowwoods • Yellowwoods • Allan Gay Orbis Foundation • Allan Gay Orbis Foundation Endowment Endowment • Gauteng Provincial Government • Gauteng Provincial Government • The Jobs Fund • The Jobs Fund • First Rand Empowerment Foundation • Bonds4Jobs (financial intermediary) • Harambee Youth Employment Accelerator (technical intermediary) • Brimstone Legacy Fund in partnerships • Brimstone Legacy Fund in partnerships with Old Mutual and with Old Mutual and Nedbank Nedbank • The Hollard Insurance Company • The Hollard Insurance Company Limited Limited • The Standard Bank Tutuwa Community Foundation • The Standard Bank Tutuwa Community • Clientele Limited Foundation STRICTLY PRIVATE AN• DOCpOpNenFhIDeiEmNeTrIGAeLnerations Foundation Limited PwC
Social Bonds in South Africa The role of the Government Direct • The South African central government has not issued Social Bonds • Municipalities have issued self-labelled green bonds – i.e that do not confirm with the ICMA Green Bond Principles: o Municipal bond issued by the City of Johannesburg on the JSE to finance various green projects such as solar geysers & biogas o Municipal bond issued by the City of Cape Town on the JSE’s Sustainability Segment towards various water-resilience initiatives Indirect • The South African central government has not provided direct financial support to SIBS as an outcome funder • Indirect support as an outcome funder provided through Government agents: o Co-outcome funder for the youth employment SIB through the Jobs Fund (a National Treasury initiative) & the Gauteng Provincial Government o Co-outcome funder for the ECD SIB through the Western Cape’s Department for Social Development o Proposed co-outcome funder for the envisaged AGYW SIB through the SAMRC, in turn funded through the Department for Science & Technology STRICTLY PRIVATE AND CONFIDENTIAL 37
Social Bond Models in South Africa Traditional model Pay-for-success model Key stakeholders are: Key stakeholders are: • Investors – lend to the issuer based on the ability of the issuer or project to • Investors - lend in exchange for a financial return • Intermediary - facilitates fundraising & administers the investment service the debt (may be secured or unsecured), demonstrate impact • Implementer - implements activities needed to for the desired outcome • Issuer - facilitates fundraising, implementation (directly or indirectly) & is • Evaluator - independently verifies the outcome • Payer - repays the investor for the desired social outcome, with interest and responsible for servicing the loan obligations potentially on a tiered basis In South Africa, only green bonds have been issued: • As at 2021, SA based issuers have issued >US$ 1.6B in Green Bonds 2 SIBS have been issued to date • The JSE operates a Sustainability Bond Segment1 • Early Childhood Development (2017) in the Western Cape for $1.47m • Based on ICMA (Social Bond Principles or Sustainability Bond Principles) • Youth Employment (2018) in across South Africa for $22.7m Investment Resources Partner Develop & Finance Social Government Intermediary Service activities / payer providers Issuer products Investor (company) Financial returns + gender equality Impact Independent Deliver impact Investors Evaluator services People in need 1. Prior to June 2020, Called Green Bond Segment) | Source: LHGP Study Trigger outcome Achieve payments outcomes STRICTLY PRIVATE AND CONFIDENTIAL 38
Overview of green bonds around the world Green Bond issuances As of 2019, the Climate Bonds Initiative estimated that cumulative Green Bond issuances were US$ 776 billion, Africa accounted for US$ 2.7 billion or 0.3% Sovereign green issuers made up less than 5% of total Green Bond issuances as of 2019, but have increased significantly since the first Sovereign Green Bond issuance by Poland in 2016 Though Europe dominates overall issuances, Africa & Latin America increased two & four-fold in 2019, respectively, albeit from a low base Cumulative green bond issuance by region Region Green Issuers Amount Change Europe bond 269 issued 2018-19 markets (US$ B) (amount) 25 307.4 74% North America 2 167 190.4 46% Asia-Pacific 18 345 183.6 29% Supranational - 11 79.4 9% Latin America 11 47 12.9 216% Africa 6 16 2.7 495% SourceL Green Bonds Global State Of The Market, Climate Bonds Initiative, 2019 STRICTLY PRIVATE AND CONFIDENTIAL 39
Green Bond Potential in Africa Green Bond Potential Green Investment Potential in Sub-Saharan Africa East Asia & South Asia Europe & Middle East & sub-Saharan Latin America According to the IFC, Pacific $22 B Central Asia North Africa Africa & Caribbean Total there is US$ 1.5 T of $141 B Waste $82 B $217 B $17 B $28 B $13 B $37 B $200 B green investment potential in Africa, Renewable energy $266 B $110 B $88 B $31 B $89 B $226 B $842 B $214 B almost half of which is Public Transport $135 B $1.8 T $116 B $281 B $159 B $109 B $1 T $2.5 T attributable to green Climate-smart $461 B $64 B $79 B $101 B $228bn $1 T building water $46 B $133 B $344 B $285 B $1.6 T $881 B $1.1 T $768 B $4.1 T $24.7 T Electric vehicles $569 B $1.2 T $1.7 T $1.5 T $5 T $29.4 T Green buildings $16 T Total $17.5 T Note: Amount in $US where B and T denote billion and Trillion, respectively Increasing investment Source: Adapted from IFC, 2018 STRICTLY PRIVATE AND CONFIDENTIAL 40
Green Bond Potential in South Africa Green Bond issuances Green Bonds Issued in Africa Country Green Amount First Certified Use of Proceeds South Africa accounts for over 70% (or US$ 1.5B) of Green Bonds Bonds (US$m) Issuance Climate Bonds issued in African countries between 2012 and 2020. Green Bonds Kenya Buildings have been targeted for deployment were there’s a strong 1 41 Sept. No.# Amount Namibia 2019 (US$m) Energy, buildings, commercial basis (cost saving or financial return on investment). Seychelle 1 5 transport, water, South African issuers include municipalities and corporates s Dec. 1 41 waste, land use, 1 15 2018 adaptation & resilience 360 97 Oct. Land use & marine 74 2018 resources 200 138 117 Nigeria 4 136 Dec. 2 71 Energy, transport, 2017 water, land use Morocco 4 136 Nov. 1 117 Energy and buildings DBSA Standard City of Nedbank Growthpoint City of 2016 Bank Johannesburg Cape Town Issuer: South 6 1,556 Apr. 2 Energy, buildings, Type: MDB Corporate Municipal Corporate Corporate Municipal Africa 2012 193 transport, water, None None Green Green 10 Green Green 10 waste Standard: Bond Bond Bond Bond Principles Principles Principles Total 17 2,107 6 422 Principles 7, 5, 3 10, 7, 5 10 Tenor (yrs): 1. Prior to June 2020, called the Green Bond Segment STRICTLY PRIVATE AND CONFIDENTIAL 41
Green Bond Premium Do Green Bonds offer pricing advantages to Issuers? Results are mixed: • A study conducted on municipal issuers in the United States across 2,500 securities between 2013 & 2017 found no advantage from issuing Green-labelled bonds, a similar outcome found by ODI regarding Green Bonds issued by KfW, the largest National Development Bank issuer of Green Bonds as at 2019 • There is some evidence of secondary market bonds trading at a premium to vanilla bonds in the second half of 2019, & subsequent investigation has found some observable advantages, but non that are statistically significant to conclude a that there is a Green Bond premium • According to NatWest markets sampling of bond information in European bond markets, green issues may bring down yields across an Issuer’s portfolio (the “Halo Effect”) There is more demand for Green Bonds than there is supply: • Most issuances are oversubscribed – the same applies for South African (non-private placement) issuances to date • For less developed markets with limited capital market depth & a high cost of capital, access to Green Bonds may be advantageous • As a relatively new product, ultimately the long-term financial returns on ESG-linked bonds & underlying investments may offer new insight on evaluating & pricing sustainability STRICTLY PRIVATE AND CONFIDENTIAL 42
Determining Bond Impact ICMA’s Bond Standards are widely used and clarify requirements on: Use of Process for Project Management Reporting Proceeds Evaluation & Selection of Proceeds Proceeds must be applied The Issuer must proceeds must be: make & keep up to date towards Social Projects: communicate to investors: ▪ Set aside in a designated information on the use of sub-account or portfolio that ▪ With clear social benefits ▪ The social objectives targeted can be tracked & updated proceeds readily available: which can be assessed & ▪ The process by which the where possible, quantified ▪ Transparency is prime, & an ▪ To be renewed annually issuer will determine how independent auditor or third- ▪ Disclosure on the Social ▪ That fall within specified projects fit the relevant social party may be required to categories criteria verify usage Projects invested must be provided ▪ Eligibility & exclusion criteria ☆☆☆ Standard Bank (2021), DBSA (2020), Nedbank (2019) and Growthpoint ‘s (2018) green bonds all met the ICMA’s Green Bond Principles STRICTLY PRIVATE AND CONFIDENTIAL 43
Overview of gender bonds What are “Gender Bonds”? Definition of Gender Bonds Can Gender Bonds be Social (or Development) Impact Bonds (SIBS)? • According to the Study by LHGP, gender bonds are “bonds that support the advancement, empowerment and • Defined as “unique public-private partnerships that fund equality of women” effective social services through performance-based contracts” • No widely accepted definition • Generally for SIBS, the desired social outcome is: • As at March 2020, 13 gender-labelled (excluding Social Impact o funded by investors who wish to improve some Bonds, see below) bonds were in issue globally in three forms: defined desirable social outcome o SDG labelled gender bonds o delivered by a contracted experienced implementor, whose performance & impact is evaluated by an o Financial inclusion gender bonds independent party o Corporate behaviour gender bonds o None of the gender-labelled bonds above were issued in o typically paid for by an outcome funder, who may be Africa a donor, government or party invested in the social outcome Source: The viability of Gender Bonds in SSA - A Landscape Analysis and Feasibility Assessment, FSD Africa, 2020 44 STRICTLY PRIVATE AND CONFIDENTIAL
The Gender Bonds Market Global distribution Countries where gender bonds have been issued Source: The viability of Gender Bonds in SSA - A Landscape Analysis and Feasibility Assessment, FSD Africa, 2020 45 STRICTLY PRIVATE AND CONFIDENTIAL
The Gender Bond Market Gender bonds across the World ▪ Where does the money go? − Development Finance Institutions have been the largest absolute $400 M issuers with c. 38% of gender bonds or $1.3B QBE Bond − The largest issuance of $1.1B targeted multiple SDGs – gender & Policies Educational health skills and promoting vocational gender equality training − Most Gender Bonds in developing countries targeted financial $384 M Total inclusion, primarily through loans, accounting for 15% or just over NAB Bond $686 M $492 M $500M Equal Changing Livelihood, Access to DFI Bonds compensation finance − 46% of Gender Bonds were attributable to women’s leadership & and work-life business assets, (Turkey, gender equality in Canada & Australia culture and services and balance practice opportunities Thailand, Panama) Total $20 M: Women $1.5 B Livelihood Bond ▪ What’s missing? Commitment, Voice and agency: Financial 1+2 transparency services QBE Bond − Notably, infrastructure, which has been at the cornerstone of Strengthening economic growth plans (including South Africa) and individual visibility and $147 M and representation Chile Bond accountability information − There is opportunity for incorporating gender equality across many $796 M Gender Products Market information SDG, ESG or broader economic growth projects to increase CIBS Bond balance in and and business participation, consumption & welfare leadership development services to − No gender bonds have been issued in Sub-Saharan Africa and support to enhance workforce enhance productivity Source: The viability of Gender Bonds in SSA - A Landscape Analysis and Feasibility Assessment, FSD Africa, 2020 growth $400 M 46 STRICTLY PRIVATE AND CONFIDENTIAL QBE Bond
Gender Bonds in the developing world Gender bonds in the developing world Issuer Issuance description Issuance date Size Key performance indicators and metrics ADB Gender Bond To finance projects that promote November 2017 ¥10 B gender equality and women’s (»US$ 90 M) • Not specific. Part of ADB’s wider empowerment, such as ADB’s October 2019 operations and support of ADB’s support for financial inclusion for Strategy 2030 which includes women March 2020 accelerating progress in gender equality December Bank of Ayudhya’s This offering aims to boost lending 2020 US$ 220 • Loans outstanding to women-led M small and medium-sized Krungsri Women to women-led small and medium- (3rd bond) enterprises in Thailand sized enterprises in Thailand SME Bond OCBC NISP Enable the Bank to increase IDR 2.75 T lending to women entrepreneurs • Not disclosed Gender and women-owned small and Program medium enterprises. (»US$ 200 M) IIX Women’s Goal is to create sustainable US$ 150 M • Social Return on Investment, which Livelihood Series livelihoods tabulates the total net impact for 250,000+ underserved women generated (monetized) per dollar of in the Asia-Pacific region investment across the life of the bond. • Number and percentage of female beneficiaries Number of households positively impacted Source: Furthering Gender Equality Through Gender Bonds, IISD, 2021 STRICTLY PRIVATE AND CONFIDENTIAL 47
Gender bonds in the developing world Gender bonds in the developing world ▪ In developing countries, South America & Asia lead the issuance of gender bonds with over US$ 500 million issued as of 2020 ▪ Gender bonds are typically placed with large developmental supranational investors & are customized to meet their requirements ▪ Only two Social Welfare SIBs issued in developing countries as of February 2021, including targeting Gender Based Violence in Papua New Guinea ▪ UN Women is pursuing various initiatives to proliferate the issuance of Gender Bonds in developing countries, including: − South Africa: a potential sovereign gender bond & private investment fund targeting the country’s Economic Recovery & Reconstruction Plan − Morocco: potential funding through a gender bond for the country’s 10-year national program on women economic empowerment − India: Women Livelihood Bonds issued in October 2020 by the State Bank of India with a commitment to lending to women-owned businesses − Mexico: Trust Funds for Rural Development placed US$ 145 million in Mexico’s first social bond with a gender perspective, targeting women in the agricultural sector Sources: Impact Bonds in the Developing World, Centre for Universal Education – Brookings, 2017 STRICTLY PRIVATE AND CONFIDENTIAL 48
Bond Options Characteristics of sovereign, social and social impact bonds along key dimensions Paying back Relative pricing Flexibility in use & risk & costs of proceeds Sovereign • Unless it has unsustainable debt, • Sovereign bonds typically attract • Sovereign bond issuers typically bonds sovereign bond investors will sovereign-risk, & are often prefer flexibility in how they deploy prioritize the country’s ability to considered “risk-free” & the lowest the funds raised, which in many meet its obligations, & less so on cost of financing available for that cases is towards government policy underlying projects economy or social causes Social • For social bonds issued by non- • Social bonds & SIBs are based on • Social & impact bonds, which bonds sovereigns, repayment may either the specific circumstances of the increasingly need to meet prescribed be based on the borrower's broad issuer or underlying use of funds, principles to be eligible, restrict the SIB ability to pay, the viability of the which is often considered riskier use of proceeds towards the intended targeted projects or the assets than for sovereigns social cause pledged as security • There is no clear evidence of a 49 • The viability of a SIB depends on pricing advantage for social the Outcome Payer’s ability to pay, bonds or SIBs over sovereign & the implementor’s ability to bonds – but demand far outstrips achieve the intended outcomes supply and may change over time STRICTLY PRIVATE AND CONFIDENTIAL
Determining Impact of Gender Bonds Gender impact metrics that investors consider ▪ The 2X Challenge was established by the Gender Finance Collaborative, led by the Commonwealth Development Corporation (CDC): − Started as a joint commitment by G7 countries to commit & mobilise US$ 3B to advance women’s economic empowerment & gender equality − As at 2018, 496 global institutional investors reported that they applied gender lens criteria to $868 billion in assets − The 2X Criteria were recently aligned with the Global Impact Investor Network’s IRIS+ system, which is generally accepted for measuring, managing & measuring impact by impact investors ▪ The 2X Criteria are widely referenced by Gender Lens Investors, & ascribe an investment as “2X” if it fulfils at least one of these criterion: − Entrepreneurship, with 51% women ownership or founded by a woman − Consumption, with products or services that disproportionately benefit women − Leadership, with 20 to 30% women in senior leadership, or 30% representation on the Board or Investment Committee − Investments through Financial Intermediaries, with 30% of the DFI loan proceeds or portfolio companies meet the 2X Criteria − Employment, with a 30 to 50% share of women in the workforce and one qualitative indicator beyond compliance that addresses women’s quality of employment with evidence of implementation or commitment to implement STRICTLY PRIVATE AND CONFIDENTIAL 50
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