Organisation: EcoEnterprises Fund
Signatory type: Investment manager
HQ country: United States of America
COVERED IN THIS CASE STUDY
Asset class: Private equity
Geography: Latin America
EcoEnterprises Fund, an innovator in the field of gender-inclusive investments, was the first female-owned and managed impact fund to be launched at its inception in 1998; especially notable given our Latin American focus. With seven out of eight team members being women, a governance structure with women on executive committees, and nearly 25 years in the field, EcoEnterprises Fund has been strongly positioned to identify and invest in companies that are led by and/or benefit women in local communities.
Tailored growth capital and hands-on support is central to our investment mandate. Our deep network in the Latin America region, along with our close engagement with companies, allows us to identify innovative women-led business models and promote women’s involvement at the forefront of the movement to tackle biodiversity loss, climate change, and poverty levels in their communities and more broadly. Impact and returns are maximised by leveraging our broad network of partners, as well as our expert investment and risk mitigation strategies developed and tested over two decades. The fund’s dedication to gender-inclusive investing is quantified by our commitment to the 2X Challenge, launched at the G7 Summit in 2018 as a bold commitment to inspire investment in the world’s women.
Why this approach?
Deterioration of valuable ecosystems continues to accelerate. In Latin America, one of the world’s most biologically rich regions, representing nearly 40% of the planet’s remaining biodiversity, there is a significant burden on fragile habitats and natural resource bases, mainly due to unsustainable agricultural methods. Poverty and challenges arising from climate change further increase the pressure.
Women are disproportionately affected by these issues, while also playing an important role in combatting them. Despite being vastly under-represented in financing processes, women’s leadership increases the effectiveness of climate and biodiversity funding, strengthens innovation, and delivers stronger environmental and business outcomes. Women are also important participants in sectors that are critical to transitioning to a nature-positive economy, including agriculture and forestry. In many rural communities, it is primarily women who are involved in the sustainable management of natural resources, such as drinking water, land utilisation, or agroforestry, and women are often the primary holders of community knowledge concerning species diversity and usage of indigenous plants. For this reason, strengthening their leadership in these sectors not only advances social outcomes for women and their families, but is a necessary part of creating effective action on conservation and regeneration.
EcoEnterprises Fund has found that successful conservation and addressing the economic needs of rural communities are inextricably linked; our investment in gender-smart, nature-positive businesses in sectors such as regenerative agriculture, agroforestry, alternative forest products, circular economy, and other emerging opportunities leads to positive impacts in local communities and in the natural ecosystems they rely on.
As part of our investment participation, EcoEnterprises Fund works with each portfolio company to enhance diversity, equity, and inclusion. Through our advisory work and technical capacity-building funds, we have supported all our portfolio companies in undertaking gender-smart actions, beginning with an analysis of current policies through the Women’s Empowerment Principles Gender Gap Analysis Tool. The tool identifies the gender-progressive actions that our portfolio companies are taking, as well as areas for improvement. We then look for ways that we can support projects to address gaps. One such example is our investment in an organic lime producer in Colombia. In a traditionally male-dominated sector, the company is implementing a programme supported by our technical assistance funds to provide women in its workforce with educational courses and professional development opportunities, with the aim of growing the number of women in leadership.
EcoEnterprises Fund continues to be at the forefront of initiatives such as the 2X Challenge, which mobilises capital to provide women in developing markets with improved access to leadership opportunities, quality employment, and financing. For our third fund, EcoEnterprises Partners III, we have already surpassed the target set by our stakeholders for funds committed under the 2X Challenge. 2X Challenge companies that received financing include a female-led company in Colombia focused on innovative natural colorants, developed in conjunction with Afro-Colombian communities. We also invested in a food upcycling company that sources from a women-led organic plantain provider in Ecuador. The plantain producer provides technical assistance to indigenous farmers in the Amazon, many of whom are also women. Due to our involvement, the food upcycling company recently acquired the Ecuadorian plantain producer, amplifying the positive impacts for women stakeholders along the value chain and allowing for greater transparency and traceability.
EcoEnterprises Fund’s positive impact for women-led businesses has scaled alongside the growth of our funds. We have seen an upswing in women-led businesses in the region and are pleased to have supported this, not only through our investment approach, but also through our consistent push for change in our portfolio companies, encouraging more women hires and female leadership. These ground-breaking women have stood as role models, and we are proud to also represent strong female leadership in the field, using our experience to mentor next-generation women-led businesses.
Latin America has high potential for further growth – female participation in economic activity in the region remains under 50%, exacerbated by the economic fallout from the Covid-19 pandemic. A study by The Global Entrepreneurship Monitor found that a lack of profits or funding problems among female-led businesses are responsible for 56% of their failures in Latin America. Women’s lack of access to financial education and business training, as well as gender biases, continue to create barriers for the creation and growth of women-led and gender-inclusive businesses.
EcoEnterprises Fund looks to continue leading the way in investments at the intersection of biodiversity and gender in Latin America. Success for us includes not only a solid portfolio of financially viable, progressive businesses, but also an active pipeline of women-led companies, signalling a healthy ecosystem of female entrepreneurship. To reach that goal, we need dedication to growing the ecosystem, alongside flexible financing, and hands-on support. All these are critical for long-term performance and to lay the groundwork for others to follow the same path.