Set Explicit Equality Impact Goals
How to identify opportunities for equality impact investing? How to set equality impact goals?
Investors aspiring to reduce inequalities through investment practices need to be intentional about equality impact from the very beginning. While traditional investors may first assess market potential, equality impact investing challenges investors to first set explicit equality impact goals, before moving on to market assessment. Otherwise, reducing inequalities may simply be a by-product of investments and will not be sustainable.
An important first step for any investor will be to develop an impact thesis that sets out clear and robust goals for the specific impact on equality you will seek through your investments. This section provides helpful steps and tools you can follow when setting equality impact goals.
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Identify equality challenges
Equality impact goals are a reflection of the inequality issue you want to address and the difference you want to make on that issue. First, it is important to know who is experiencing what kinds of inequality in what ways (see this section). You will need to have a clear idea of what these are in order to determine which EII strategy (or combination of EII strategies) to use when formulating your impact thesis.
EII draws on frameworks from the equality and human rights sector and associated analysis to establish the main dimensions of equality impact, which should be reflected in your equality impact goals:
Equality of what? These are domains or areas of life such as education or health where inequality manifests.
Equality for who? These are the individuals or groups affected by inequality who your investment will target.
Equality in what ways? Inequality can be addressed in terms of outcomes, structures and/or processes.
There are a number of useful frameworks to analyse inequalities and can inform the development of equality impact goals and measures. Although the two frameworks introduced below have been designed to look at issues on a nationwide level, their approach to understanding issues and their data can inform investor goals whether working internationally, nationally or locally.
+ Measurement Framework for Equality and Human Rights
Used by the UK’s Equality and Human Rights Commission (EHRC: the UK’s statutory equality and human rights body) as a basis for monitoring and reporting on the UK’s adherence to, and progress on, domestic and international equality and international human rights legal standards. As such, it is a key reference for the government and the wider public sector subject to these, but also a range of other private and civil social actors concerned with and working to tackle inequality in the UK.
See here for the framework: Measurement Framework for Equality and Human Rights
+ Multidimensional Inequality Framework
Developed by Oxfam and LSE’s Centre for the Analysis of Social Exclusion, this framework is designed for a wider range of actors and can be adapted to different country contexts. While it speaks to formal legal commitments, it goes beyond these to reference goals such as the SDGs. The framework can be used to understand the drivers of inequality and root causes across seven key aspects of life, which brings a systemic level analysis.
See here for the framework: Multidimensional Inequality Framework
TIPS AND TOOLS
When using these frameworks, it is important to consider how you conduct research and gather information when developing your impact thesis. Do you mainly rely on desk research for your analysis? Have you engaged with equality and human rights organisations who work on the issues you’re concerned with? How about with communities or people with lived experience you seek to benefit or serve, to understand their challenges and equality priorities? By engaging with communities and related organisations, you can develop a more informed analysis and better understand and respond to the needs of people you would like to reach and work with. Some useful tools to help you learn from the communities are:
+ Engaging with communities
- Check out the power analysis section to learn how to address power dynamics of your investment
- Ladder of co-production by Think Local Act Personal (TLAP) on the various stages of access and inclusion before full co-production with the communities can be achieved
- USERS methodology by The Social Investment Consultancy (TSIC) on inclusive monitoring, evaluation and learning
- Learnings from National Lottery Community Fund on people with lived experience by sectors
- Nothing about us without us – Lived experience insight & social investment by The Young Foundation sets out how, and to what extent, bringing more diverse voices into different parts of the social investment process has the power and potential to positively impact stated social investment outcomes
+ Equality data to support analysis
- Equality data by the Department for Digital, Culture, Media & Sport in the UK
- Is Britain Fairer? by the Equality and Human Rights Commission in the UK
- Compendium of practices for equality data collection by European Union Agency for Fundamental Rights
- Data resources for multidimensional inequality by Oxfam and LSE’s Centre for the Analysis of Social Exclusion
Equality impact goal setting: what can you change?
As an impact investor, your impact goals will form the basis of your impact thesis. Your analysis on the inequality challenge you wish to address (using the suggested frameworks and/or other research) will inform your equality impact goals. Equality impact goals need to be clear to help you decide which EII investment strategy/ies will be most likely to achieve these. To set equality impact goals, consider these guiding questions:
What’s the inequality issue you want to address? Equality of what, for who and in what ways?
What is the inequality challenge you want to address?
Are you focused on specific populations or geographies?
What are the drivers of the inequality challenge you are addressing?
How is inequality manifesting in the area and/or group(s) you are focused on, in terms of the dimensions of outcomes, processes and structures?
How can an intersectional analysis inform your assessment of the inequality challenges you’re interested in?
What’s the difference you want to make?
What will be the end result of reducing inequality / advancing equality of your intervention?
What are the specific outcomes you seek in terms of the actual experience, treatment, position and/or status of particular individuals or groups?
If you are (also) targeting wider processes and structures, for example by focusing on certain institutions, policies or public attitudes, what specific changes are you aiming for?
What could be your specific contribution to these equality outcomes, accounting for what would have happened anyway?
Case example: a place-based fund in Birmingham, UK
This hypothetical case example presents a place-based fund operating in the city of Birmingham, UK. The fund follows the steps above to set its EII goals.
What inequality issues did the fund want to address?
Equality of what? The fund is focused on addressing socio-economic inequalities in the city of Birmingham, which faces among the highest levels of deprivation in the UK. Employment levels are lower than the rest of the UK, along with levels of income.
Equality for who? Levels of employment among different groups vary greatly, with ethnic minority residents faring worse than white workers. Carrying out an intersectional analysis reveals that levels of employment for ethnic minority women are especially low in comparison to ethnic minority men.
Equality in what ways? Several factors have been identified as disadvantaging ethnic minority workers: low pay levels, the existence of an ethnic minority pay gap, insecure and low quality employment, discriminatory hiring practices, lack of networks and issues with work progression. Ethnic minority women experience these to a greater degree, and also face particular barriers to employment related to their care responsibilities.
Equality impact goal setting: what difference does the fund want to make?
The fund would like to increase the income levels of low-income ethnic minority women. It wants to do this through both job creation and through improving opportunities for ethnic minority women to access quality jobs by addressing barriers such as insufficient childcare provision, discriminatory attitudes and poor working conditions.
The fund will therefore seek to influence the following dimensions of equality impact:
Outcomes: Increase levels of quality employment for ethnic minority women
Processes: Influence discriminatory aspects of job recruitment processes
Structures: Influence policies to improve childcare provision for ethnic minority women and monitoring of working conditions by the local authorities
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