The care economy: there is no better, nor more urgent, investment
In addition to exacerbating the structural challenges of gender inequality, the COVID-19 pandemic has highlighted the unfair organization of care within society and the need to put care and sustainability at the centre of the development model. It is urgent that we advance “towards economic, climate and gender justice and a transition to a care society that prioritizes the sustainability of life and care for the planet and guarantees the rights of people who require or provide care; that takes into account self-care; that works to reduce the precariousness related to the care sector; and that raises awareness of the multiplier effects of the care economy on well-being and its ability to drive a transformative recovery with equality and sustainability.”
Towards a care society: the contributions of the Regional Gender Agenda to sustainable development (cepal.org)
The recent Gender Smart Investing Summit (GSIS) in London generated huge energy and commitment to investing in market-based solutions to care economy challenges. There is interest in a range of businesses that:
- reduce care burdens through the provision of time and labour saving products;
- redistribute care burdens from women and girls to the private sector through high quality affordable services;
- reward paid care and domestic workers, through decent pay, fair working conditions, training and skill building, and linkages to financial services and formal social security systems.
All of these efforts are based on a recognition of the need for systemic change and investment in the care economy, which urgently requires serious investment and action not only by the private sector, but also the public sector. Governments have an important role to play in fostering co-responsibility between men, women, households, communities, the private sector, and the public sector for the systemic change required to transform the care economy.
Two weeks after the London summit, the Regional Conference on Women in Latin America and the Caribbean in Argentina focussed on a caring society. The conference underscored the urgency and scale of the transformation needed and called for radical investments from governments but also innovative market-based solutions and public and private partnerships.
At the same time, in Guatemala, one of the most important regional convenings for impact investors, the Gender Lens Investing in Latin America Forum and Foro Latinoamericano de Inversión de Impacto Centroamérica y el Caribe (GLI-FLII CA&C) also discussed the role of impact investing and entrepreneurship to help transform the care economy, taking forward some of the discussions started in at the GSIS in London.
The Bali Care Dialogue followed, aiming to mobilize action at the G20, both leveraging community, public and private sector innovations in the care economy.
This whirlwind of events has left us with three main takeaways that we hope will help to galvanize a wide array of stakeholders to act collaboratively, and to act now.
1. For those committed to gender justice, racial and ethnic justice, economic justice and climate justice, the care economy is the sector to invest in.
Investing in care is investing in gender, ethnic and racial justice
The care economy is the core component of the wider economy. It includes all of the care and domestic work that is required to keep both society and the formal economy functioning. It is a simple – but elusive (to those in power) – fact that, to make economies function, you need to care about care, and about those who do that work. While core to the wider economy, the present organization of the care economy is a structural barrier that limits women’s economic participation and benefit, and women’s and girls’ wider wellbeing, with devastating consequences not only on society, but on the economy and the planet.
Gender lens investing is about investing in women led companies, companies that have a high proportion of women workers and/or companies that develop products and services that address women’s and girls’ needs. Investing in the care economy meets all these criteria together; it is an investment in women’s leadership, in women’s empowerment, and in those women who have been systemically marginalized by policies and practices in the public and private sectors. Investing in care is an opportunity to invest in women founders and leaders, and in a more equitable care economy.
The Care Economy Knowledge Hub led by Kore Global has mapped over 165 care economy businesses across Latin America, Africa, and South and Southeast Asia. Supported by the Transforming the Care Economy though Impact Investing (TCEII), the mapping revealed that, for those businesses with data, 88% met one or more of the 2X challenge gender lens investing entrepreneurship and leadership criteria, and 48% of the businesses mapped were founded by at least one woman.
International Labour Organization data shows that 19.3% of women’s employment globally is in the paid care workforce. This group includes more than 75 million domestic workers, over three-quarters of whom are women. Four-fifths of these jobs are in informal employment and are particularly vulnerable to exploitation. For example, in Latin America more than 17% of people employed as domestic workers are migrants, in jobs that are extremely precarious, including exposure to gender- based-violence.
A number of businesses in the Kore Global mapping are trying to address these issues, by professionalizing care work, facilitating access to social protection, linking workers to financial services, and providing decent pay and working conditions. An excellent example of this is Homely, the first digital platform in Mexico to offer formal jobs and social benefits to independent domestic workers including competitive salaries, and a range of benefits, such as monthly bonuses for punctuality and quality services. Homely has also partnered with Platzi to help domestic workers improve their knowledge on various topics, from digital and financial education to the English language. Domestic workers can decide whether to work full-time or by the hour, depending on their availability, without giving up the benefits of formalization.
Other businesses that focus on rewarding paid care and domestic workers include Symplifica, Asistta and aeioTu in Latin America; Jazza Center, AgeWatch Africa and The Baby lounge in Africa, and Ayat Care and Fair Employment Foundation in South and Southeast Asia.
Investing in care is investing in economic and climate justice
We are currently facing two deep and structural crises: the climate crisis and the care crisis. At the GSIS and at the GLI-FLII CA&C there was momentum to advance the intersection between gender and climate in finance. Investing in the care economy is an opportunity to do so. Women and girls, especially those in the lower-income countries, are most exposed to and impacted by climate change.
A recent report commissioned by Canada’s International Development Research Centre outlines how addressing climate change can positively impact care and domestic work, and addressing care and domestic work inequalities can positively impact climate and the planet. As an example, investing in clean energy solutions can, in itself, be a “triple win”: where clean energy access is improved, women’s economic empowerment can be enhanced, and women’s heavy and unequal responsibility for care work can be reduced and redistributed. But for this triple win to materialize, investments in clean energy need to be intentional about care reduction and redistribution, and seek changes in social norms.
Of the 165 businesses mapped by Kore Global, a significant majority of these focus on reducing and/or redistributing care and domestic work and can both contribute towards climate action and gender equality. They include business such as Atec, which provides clean cooking solutions and biodigesters to rural, semi-rural, and urban households in Bangladesh and Cambodia; Tierra Grata, based in Colombia, which develops and implements solar panels and generators for rural areas; and Usafi, which manufactures and distributes cooking stoves and biomass briquettes in Kenya.
2. A central challenge is that a traditional approach to thinking about profit, risk and impact, and therefore making impact investing decisions, still prevails.
The predominant investment model is patriarchal. It works for a tiny select few because it puts profit at the center and reifies inequality. It causes suffering to people and our planet. The GSIS and the GLI-FLII CA&C approach sought to challenge this patriarchal paradigm by shifting the lens from why to how. Instead of asking why to invest with a gender-justice lens, a racial-justice lens, and a climate-justice lens, it asked how to use current instruments, vehicles, and partnerships to enable this investment, and how to create new ones. The challenge went even further, by asking not what investing in women can do for financial returns (that old instrumentalist chestnut!), but rather what investment can do for women, girls and other marginalized groups. It turned the tables.
The conferences also shifted the aperture. Just as the climate emergency is deepening, the focus is shifting to what we need to do now for long-term planetary sustainability. As the care infrastructure crumbles, we need to also look for solutions for long-term social, economic and planetary sustainability. This will require a shift in how we understand impact. To leverage the traction that gender and climate smart investing has gained over the past decade, we need to re-imagine and re-define what we mean by impact. We need to measure what truly matters for people, for prosperity and for the planet. We also need to build a market that identifies and costs external risks – the effects of unpaid care demands must factor into sector and market analyses of potential growth. Unpaid care needs to be counted, recognized and properly rewarded and paid for.
If gender lens investing is to deliver on its promise to help tackle gender inequalities, the types of capital and investment vehicles need to be reconceptualized. At the GLI-FLII CA&C in Guatemala discussions focused on the need for different types of capital for different stages of care businesses, and the important role of peer learning, assistance and collaboration. We learned from care economy innovations such as indigenous cooperatives that emerged during the pandemic and the type of capital and support that they need to flourish. Recent work commissioned by the Gender Smart and 2x Collaborative Care Economy Working Group, and supported by the TCEII Initiative, provides guidance to investors and employers on how to engage.
3. It is possible – and necessary – to bring a Care Economy lens to all investments.
The care economy, as demonstrated above, is an investable sector in and of itself. But it is also a lens to apply to all investments because care economy constraints are fundamentally material to progress towards gender equality in all sectors. Bringing a care economy lens to investments in any sector will help to achieve greater impact for women, girls and marginalized groups in that sector and beyond. It asks, as a bare minimum starting point, whether women’s care burdens have been taken into consideration and whether the benefits to them (not just the household) outweigh the costs. Asking these – and deeper – questions can lead to a virtuous cycle (similar to the one between climate-just and gender-just transitions discussed above). Addressing care and domestic burdens enables women to engage more in the market – as formal or informal sector workers – and addressing gendered market constraints in these sectors can increase women’s economic agency, enabling them to invest in reducing and redistributing their own care burdens. What is needed is a framework and tools for mainstreaming a care lens across all investments – this is our next work in progress!
In conclusion, investing in care is investing in people, prosperity and the planet. The scale of the transformation needed requires collaboration and co-responsibility between impact investors, impact business and public sector. It requires supporting women and girls who are engaged in unpaid and paid care and domestic work, shifting social norms at the household and community level that devalue care work and assign it to women and girls, investing in transformative solutions for service and product provision in the market, and public policies and investment. The caring society we seek to create requires everyone.
