Publish What You Fund has examined how development finance institutions (DFIs) are disclosing their 2X investments and found big gaps in the information available. The lack of standardised disaggregated information makes it almost impossible to get the granular insights that are needed to measure the value, impact, and progress of gender lens investing. In a new research paper, “Taking stock of the 2X Challenge: The transparency of gender lens investments“ we assess the current state of 2X disclosure and suggest how the 2X community can improve its transparency and accountability.

The world is currently off track to meet the global goal of reaching gender equality by 2030 (SDG 5). If we are serious about achieving gender equality, we need to match our ambition with effective, catalytic investments that offer significant advancement to women and girls. One of the leading efforts to do this is the 2X Challenge, an initiative by DFIs and institutional investors. Since 2018, according to 2X Global (which houses the 2X Challenge), it has mobilised a total of USD$27.7 billion for women and girls. The 2X Challenge is about to open to a wider range of investors, and launch a certification scheme for 2X investments.

This time of change provides an ideal opportunity to take stock of its progress. What do we know about 2X investments? Which have worked and which haven’t, and how do we learn from this?

In order to answer these questions, we need to see investment-level information. 2X Global provides global trends using aggregate data, but not the detailed data that is needed to measure value, impact, and progress. We need investors to disclose disaggregated data to measure whether the approach is effectively closing gender gaps, to hold investors accountable for the public money they spend, and to understand how much is invested by DFIs versus how much private sector funds are being mobilised.

To understand the current level of disclosure of 2X investments, Publish What You Fund assessed the non-sovereign portfolios of 14 DFIs that are part of the 2X Challenge. We examined publicly available information to identify individual 2X investments, and understand why they are eligible.

The review identified significant gaps in disclosure of 2X qualifying investments by DFIs.

Our top findings

Public disclosure is broadly lacking and varies considerably between DFIs

Three of the 14 institutions reviewed did not disclose anything about their 2X investments on their website list/database, downloadable database, investment page, project sheet, interactive map, or annual reports (including impact and gender reports). Only six of the 14 DFIs disclosed their 2X investments at investment level. These institutions were British International Investment, US International Development Finance Corporation (DFC), FinDev Canada, Proparco (France), European Investment Bank and Swiss Investment Fund for Emerging Markets.

Distinguishing between direct contributions and mobilised funding is challenging

We found that DFIs disclose different figures, and few distinguish between total direct investment and mobilised investment. Reporting only mobilised investment figures or not distinguishing direct contributions runs the risk of inflating the amount of 2X investment.

DFIs largely do not publicly disclose how their investments meet 2X Criteria

We identified only two DFIs that systematically disclose which of the 2X Criteria investments meet at an investment level (DFC and FinDev Canada). This information is needed if we are to understand how each DFI is investing in women as entrepreneurs, leaders, employees or customers.

Financial Intermediary investments are typically less transparent than direct investments

More investments meet the 2X indirect criteria (investing through financial intermediaries) than any other of the five criteria, which compounds the transparency challenges we have identified. DFIs do not disclose their contribution amount (DFI commitment) in cases where the investment is made through a financial intermediary.

Recommendations for improving the disclosure of 2X investments

The next round of the 2X Challenge is opening to a wider range of investors. This provides an ideal opportunity to address gaps in disclosure and instil a culture of transparency within the 2X Challenge. Without greater transparency we cannot assess the impact of these investments in closing gender gaps. Without the data and the evidence to ensure we are being responsible fiscal custodians, investments may be haphazard or worse, doing harm.

Publish What You Fund makes a number of recommendations for 2X Global and individual DFIs to improve their disclosure. We propose that 2X Global improve transparency and timely disclosure of 2X investments by making investments publicly accessible via a centralised reporting platform. Much of this information is already collected and reported to 2X Global by DFIs, and their consent to publish it would mark a significant step forward for the transparency of gender lens investing.