New 2X Challenge Announces US$20 Billion Target for Investments for Women.

Jun 17, 2024

The Global Innovation Fund has joined a multilateral coalition of public and private sector investors which has pledged to invest US$20 billion in women’s economic empowerment over the next three years, under the 2X Challenge.

The announcement came at the close of the G7 Leaders’ Summit in Italy, with the official communiquè affirming support from among the grouping’s development and multilateral finance institutions:

“Recognising the success of the 2X Challenge, we welcome the new collective commitment by our Development and Multilateral Finance Institutions and other members of 2X Global, to invest at least USD 20 billion in gender lens investing in developing countries, encouraging investments at the nexus of gender and climate finance. 

We call upon other public and private actors to join the next three-year 2X Challenge, advancing measurable changes and financing directed to women’s empowerment.”

This will be the third edition of the 2X Challenge, which was first launched at the G7 Summit 2018 in Canada, as a commitment from the G7 development finance institutions (DFIs) to mobilise US$3 bn in gender lens investments between 2018 to 2020. 

The first Challenge significantly surpassed that target, raising more than US$11 bn. A new target of US$15 bn was set at the G7 Summit 2021 in the United Kingdom and was also subsequently surpassed with US$16.3 bn raised between 2021 to 2022. As of 2024, more than US$33.6 bn in gender lens investments have been mobilised under the 2X Challenge.

The 2X Challenge 2024-2027 marks the first time that private investors will be a part of the initiative, which has expanded to include the full spectrum of capital providers. Alongside, the Global Innovation Fund, the participants include Deetken Impact, I&P Investisseurs & Partenaires, Developing World Markets (DWM), Advance Global Capital, and the Global Gender-Smart Fund (GGSF), run by Innpact and Sarona Asset Management.

Jessica Espinoza, Chief Executive Officer of 2X Global, the independent organisation which runs the Challenge, hailed this new phase in the initiative:

“This is really a significant milestone in the journey of the 2X Challenge - something which we’ve hoped for and worked towards making a reality,” she says. “Having both public and private capital providers on board for the Challenge represents an extraordinary opportunity to mobilise even more gender-smart capital for women, unlocking their potential and driving economic growth. 

“Combining the resources and expertise from both the public and private sectors means we can amplify our impact as we strive to close the gender gap in finance.”

The Global Innovation Fund is delighted to be joining the 2X Challenge, as one of the first non-DFIs to participate. Joseph Ssentongo, acting CEO says:

“GIF invests in innovations with the potential to improve the lives of the world’s poorest people. By placing an explicit value on women’s agency, we have successfully pursued transformative investments that empower women and girls – and seen their positive impact. We look forward to collaborating with partners who feel the same and are ready to take collective action.”

Lori Kerr is CEO of FinDev Canada, the DFI of Canada which is set to host the G7 Summit in 2025.

“FinDev Canada is proud to be a founding member of the 2X Challenge,” she says. “We welcome the private sector members’ participation in this next iteration of the Challenge. Together, DFIs, MDBs and the private sector, we can do more to advance gender equality, especially at the nexus of gender and climate finance, through better access to finance.”

A range of DFIs and MDBs have pledged their support for the 2X Challenge 2024-2027. They are:

  • Asian Development Bank 
  • British International Investment (United Kingdom)
  • Belgian Investment Company for Developing countries (Belgium)
  • CDP Development Finance (Italy)
  • DEG - Deutsche Investitions- Und Entwicklungsgesellschaft (Germany)
  • U.S. International Development Finance Corporation (United States)
  • European Investment Bank - EIB
  • FinDev Canada (Canada)
  • Finnfund (Finland)
  • FMO Entrepreneurial Development Bank (Netherlands)
  • International Finance Corporation
  • Investment Fund for Developing Countries (Denmark)
  • Japan Bank for International Cooperation (Japan)
  • Japan International Cooperation Agency (Japan)
  • Norfund (Norway)
  • Development Bank of Austria - OeEB (Austria)
  • Proparco (France) 
  • Swedfund (Sweden) and;
  • Swiss Investment Fund for Emerging Markets (SIFEM)

Under the 2X Challenge, investments are qualified using the 2X Criteria, the framework which underpins the Challenge and which has become widely used as the global industry standard for GLI. Participating investors submit their qualified gender lens investments through the Challenge platform, powered by Equilo.

The Case for Investing in Women

If women and men were to simply participate equally as entrepreneurs, global GDP could rise by 3-6%, boosting the world economy by US $2.5-5 trillion.

The European Investment Bank estimates that greater gender diversity in the workforce could lead to a potential increase of 26% of annual global GDP and US $160 trillion of human capital wealth, and could enhance business performance by 15%.

Over 10 years of investing, companies with a female founder performed 63% better than those with all-male founding teams.

In a study of Russell 1000 companies, Glenmede Investment Management found that firms with greater gender diversity (defined as: female CEO or Chair; greater than 20% women on the board; and greater than 25% women in management) outperformed with greater return and less risk.

The 2X Challenge was founded by the G7 Development Finance Institutions as a call to action to shift more capital towards investments that empower women in developing countries to access entrepreneurship and leadership opportunities, quality jobs, and products and services that enhance their economic participation. Since then, the flagship initiative has raised gender lens investments totaling US$33.6 Billion.