Female empowerment in emerging markets: more than sanitary towels

As discussed in this blog we have learnt a lot since we started researching how we might apply an impact strategy in emerging market public equities 5 years ago, and especially in the last three years since we launched our strategy.

Back in 2018, one of the most exciting areas for me personally was looking for businesses that would fit into the ‘gender’ theme and through their products and services structurally improve outcomes for women in emerging markets.

As investors in India since 1996 and an office there since 2010, it was perhaps no surprise that one of my early favourites came from the country. P&G Hygiene and Healthcare basically created the feminine hygiene category in India. It was a business that had all the things we look for – defensible moats in terms of its strong brands and distribution in a large scalable market where around 350m women currently need some form of feminine hygiene product[1]. P&G Hygiene and Healthcare offers double digit earnings growth and strong cashflows, with over 50% market share[2] in India for feminine hygiene products and a long runway for growth in the category given that current penetration is only around 20%[3]. The scaling of this business delivers positive outcomes with an eye required on the pricing of the products to ensure they are accessible to ‘rurban’ consumers, whom are their target market.

Over the next three years we have tied ourselves in knots looking for other clear ‘gender’ examples in the public equity space with very little to show for it. The challenge is twofold. Firstly, that other themes we targeted stole all the good ones! There are so many different business models that benefit women but often in combination with another structural theme such as financial inclusion (a great many businesses focussed on female entrepreneurs) and health (improving outcomes for women in hospitals dedicated to women and children). Having a separate theme for gender just created discussions of limited value about how to categorise the company.

Secondly, we also must own up that we missed the point by designing the theme of gender as having to provide a product or service that primarily serves women. We did this with good intentions – we wanted to set the bar high and focus on delivering products and services at scale and deprioritised the operations of the businesses themselves. Access to products and services is part of the issue, for sure, but it ignores the fact that the wider system is broken and structurally disadvantages women. To ignore the impact of investing in businesses are women owned or women led or have leadership teams and corporate policies that level the playing field because they don’t sell a product for women is missing the point, and the fact it took us so long to realise this I see as a personal failing.

In my defence, the intentions were noble, the presence of greenwashing in the industry is a real concern and we skewed hard to products and services as we didn’t want to include a firm just because it had a senior woman as a HR director on the management team or Board. This is not to underestimate the impact of having women and minorities in leadership positions, I am one and I hope I make a difference in terms of my perspective on the world as a woman and a gay one at that. We wanted to set a bar that was as high as possible, particularly given we are investing in the listed space.

We now use the “2X Criteria” (https://www.2xchallenge.org/criteria) to broaden our scope of gender investments. This initiative was launched in 2018 as a commitment by DFIs around the world to mobilise more ‘gender capital’ to private sector investments that provide women in developing country markets with better access to leadership, quality employment, and finance. This will mean that companies which promote gender in their own operations (e.g., through having >30% women in senior management or >50% women in the workforce) can qualify under ‘gender’.

One caveat to our adoption is to improve our comfort around the quality of the employment and the ‘stickiness’ of Board/senior management level gender metrics, we also want to see the company have employee-related (ideally specifically gender equality-related) policies above and beyond what is required by local legislation. The 2X Criteria was designed with SMEs/private businesses in mind, we think it is reasonable to expect more from a more mature listed company.

The outcome from these changes and embedding ‘gender’ under the broader banner of our Equal Opportunities theme has given us a lot more flexibility and has led to 5 additional names entering the investment watchlist, including a female-led business in India.

More broadly, the work we have done with thinking about gender has improved our understanding and engagement across our wider portfolio. Engaging on this topic not only on female representation in senior management and leadership positions (I won’t rehash the age-old evidence of improved decision making from diverse teams) and the nitty gritty business of improving HR policies to ensure that women aren’t left behind during their career due to family commitments.

Intuitively we know this work matters and being able to support gender empowerment in a wider range of ways in emerging markets can only be a good thing.

Rebecca Lewis, Partner & Co-CEO


[1] https://menstrualhygieneday.org/wp-content/uploads/2016/04/FSG-Menstrual-Health-Landscape_India.pdf

[2] https://economictimes.indiatimes.com/markets/stocks/news/procter-gamble-to-rise-in-sanitary-segment-while-facing-competition-in-healthcare/articleshow/52612228.cms?from=mdr

[3] https://timesofindia.indiatimes.com/blogs/voices/feminine-care-brands-are-yet-to-spread-their-roots-in-rural-india/


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