Contribution of FDI towards SDG 5
As part of a growing focus on the Sustainable Development Goals (SDGs), many investment promotion agencies (IPAs) are seeking to enhance the contribution of their activities – and of foreign direct investment – to greater sustainability. An important aspect of sustainability is gender equality, listed as SDG number 5 – Achieve gender equality and empower all women and girls. From our initial findings and discussions, IPAs are increasingly paying greater attention to the connection between investment attraction and gender equality.
To support IPAs in achieving SDG 5, FDI Center has launched the “Toward Gender Equality in FDI” initiative, which kicked-off with two separate webinars in September 2022. These discussions featured senior IPA executives from around the world and specialists from multilateral development agencies. The discussions centered around two main topics: how IPAs can enhance gender equality within their own organizations and how IPAs can contribute to gender equality in society through the investment they attract.
The contribution of investment attraction to gender equality
Our discussions showed that while investment attraction activities can play an important role in supporting gender equality, achieving this goal is difficult for many IPAs. They must often balance numerous mandates and may not have the resources to dedicate to initiatives other than their core mandate of creating jobs. Additionally, IPAs typically do not have direct control or even influence over the policies required to promote gender equality.
The panel highlighted that for progress to be made, gender equality needs to be a stated goal of IPAs (along with other sustainability objectives) that is supported by both senior leadership and stakeholders. IPAs can also play a key role in coordinating the activities of different actors that are dedicated to enhancing gender equality – including other government agencies, non-profit organizations and the private sector – to ensure that their activities are working together in harmony and include a focus on foreign investment.
In terms of the role of gender equality in day-to-day investment attraction efforts, the consensus was that trying to select target industries that may generate proportionally more female employment is not a feasible approach. Selecting such industries is difficult and may be counter effective to the overall economic priorities of the location. An alternative approach used by some IPAs is to focus on specific types of companies, such as female-owned businesses.
The discussion suggested that the greatest impact can be achieved by working with investors that have already selected the location or may already be operating there. IPAs can provide value by connecting these companies to existing initiatives and “impact projects” in the area of gender equality (and other societal goals) and facilitating their cooperation.
The discussion also highlighted the important role of workforce development and training. In some cases, a tight labor market may make a focus on gender equality unrealistic, as companies are struggling to fill positions regardless of gender considerations. However, in cases where women lack the skills or means to enter the workforce, IPAs can work with public and private training providers to ensure that a greater number of women receive the vocational training and skills that employers are looking for. Government incentives can also play a role in encouraging investors to hire and train more women, as well as other initiatives aimed at minority groups, which also contribute to greater workforce diversity and inclusiveness.
How investment promotion agencies can further gender equality inside their own organization
In addition to contributing to gender equality in society, many IPAs are also trying to address gender imbalances within their own organizations. However, few IPAs have experience in implementing successful measures. Our discussion suggested that gender mainstreaming activities fall into three major categories: structures, processes, and capacity building.
Structural measures include the installation of an internal gender focal point, who advises and supports professional staff in mainstreaming gender equality, reports on progress, and serves as a trusted source inside the agency. Incorporating gender equality into the agency’s KPIs, thereby holding leadership accountable, ensures that the issue retains attention at the management level and helps to mobilize resources for implementing organizational change. This includes collecting and publishing data on gender equality statistics inside the organization to create fact-based transparency.
Institutionalizing gender equality in organizational processes such as hiring, promotion, and performance evaluation can have a lasting effect on company culture and contributes to greater diversity, equity, and inclusion at large. It was noted that ensuring the same opportunities instead of the same criteria for professional development takes women’s needs into consideration, whilst equal pay helps to overcome cultural and psychological biases.
Integrating gender equality into capacity building such as regular sensitivity and awareness training is critical for ensuring an equal level of understanding among staff and for fostering adherence to gender equality standards. Further, it was mentioned that while publishing organizational guidelines helps to clarify standards, it is in fact training and workshops that facilitate actual adherence to those guidelines across all staff in investment promotion, facilitation, aftercare, and policy advocacy.
The way forward
FDI Center’s “Towards Gender Equality in FDI” initiative aims to provide practical knowledge and tools for IPAs to create opportunities for female leaders within their own organizations while contributing to greater gender equality and societal benefits through the investment they attract. Over the next months, the initiative will build a global community of progressive leaders from investment promotion agencies and experts in gender equality, with a common goal of sharing best practices and knowledge to further progress towards achieving SDG 5, gender equality.
Recordings of the webinars can be found on our page here. Follow us on LinkedIn or contact us directly at email@example.com to stay up to date. Get in touch if you would like to be part of the “Towards Gender Equality in FDI” initiative going forward.