This sector profile focuses on gender-based opportunities and gender-smart investing as an investment strategy for the construction and real estate sector. It aims to support investors and fund managers to identify existing and future opportunities, with guidance across project stages of commercial construction and real estate projects, ranging from hospitality and commercial infrastructures (e.g. business parks), industrial and logistics space for production and distribution, low-cost and affordable housing, and other social infrastructure real estate. See CDC’s full Gender Sector Brief for the evaluation of construction and real estate investments, including screening and due diligence questionnaires and quick facts.
Gender-smart investing is smart business. We know that women’s increased representation across the construction and real estate value chains can benefit the industry by driving business performance, labour productivity, innovation, and sustainability. We also know that women are already key contributors to the hospitality and business tourism industry and, as entrepreneurs, are increasing in demand within commercial infrastructure. This highlights a significant business and impact opportunity.
Adopting gender as an investment strategy can help investors align their impact with the United Nations Sustainable Development Goals (SDGs). There is significant potential for investors to shape gender outcomes in line with SDG 5 on gender equality and SDGs 8, 9, 11 and 12, on promoting decent work, industrialisation that benefits women, inclusive cities and communities, and fostering responsible production practices.
Guidance on ESG issues and opportunities linked to the construction and real estate sector, including gender-based environmental and social risks, is provided in the CDC ESG Toolkit for Fund Managers, including hospitality, project design and construction, and retail.
Why take a gender lens to construction and real estate?
- Business case
- Improving business performance and supply chain diversification. While construction remains a male-dominated industry, there are signs that women are becoming increasingly represented, to the benefit of the sector. In South Africa, women own 48% of the country’s construction enterprises – the vast majority of these being very small enterprises. By promoting the participation of women-owned SMEs in the supply chain, companies can tap into a wider pool of providers and contractors, which in turn can enhance their profitability and performance. In the real estate sector, women are taking a hold of the property market in a number of markets in Africa and South Asia. For example, in 2018, women became the largest group of property buyers in South Africa, with roughly 72,000 residential properties purchased by single women, compared to 62,000 by single men and around 65,000 by married couples.
- Increasing labour productivity and addressing labour shortages. In most countries, construction jobs are undertaken almost exclusively by men. Women represent only 13% of the construction workforce in Africa. However, in South Asia, women play an important role which consists of performing unskilled tasks for low pay. For example, in India it is estimated that up to 30% of the construction workforce are women. They are integrated into the building workforce at the bottom end of the industry, as unskilled workers. Women in Africa play an important role in construction during times of peak demand for agricultural labour, as the men are involved in harvesting. In addition, increasing gender balance has the potential to help the industry improve its corporate reputation and public image. Evidence shows that building a respectful culture and designing inclusive facilities can help drive labour productivity, promote business growth, and attract and retain talent. In the construction sector, temporary sanitary facilities are usually unisex, and women complain about ill-fitting protective clothing and equipment that are not the right size or fit. Ultimately, addressing gender-based violence and harassment (GBVH) can improve womens’ physical and emotional wellbeing, and strengthen occupational health and safety (OHS), avoid reputational damage, financial risks and legal liabilities, build relationships and social license to operate in communities, and broaden the pool of potential workers that companies can draw upon, including women workers from nearby communities, because of lower perceived risk of GBVH.
- Enhancing customer uptake and satisfaction with commercial infrastructures. Construction and real estate projects have gendered aspects to them; women and men have different needs and uses for property, tourism and real estate infrastructures. As a result, planners should adapt construction projects to women’s needs, adding street lights and planning for security systems, performing gender-sensitive affordability analysis, and improving accessibility for children, strollers, the elderly and people with disabilities. Women would feel safer walking at night and widening sidewalks would make it easy around with walkers, strollers or wheelchairs.
- Impact case
- Enhancing quality job creation for women. Respectively, 69% and 53% of people employed in tourism are women in Africa and in Asia and the Pacific. The tourism sector as a whole offers opportunity for women-owned SMEs and income generation for women-owned micro-enterprises. However, women tend to be concentrated in informal, seasonal, part-time, low-pay, and low-skill activities. At the global level, women earn 14.7% less than men in the tourism sector. Women also carry a greater amount of unpaid work than men in family-run businesses. Investments in tourism real estate create jobs and skills development and training opportunities for women. Investors can also encourage tourism companies to source from women-owned SMEs.
- Addressing skills mismatches. Construction is one of the key drivers of GDP growth across Africa and South Asia. However, there is a lack of skilled and educated people to meet the employment demand. For example, in Kenya there is an estimated gap of about 30,000 engineers, 90,000 technicians and 400,000 artisans. This slows down the country’s economic growth prospects. By educating the female workforce, this gap can be closed. In India, 45% of women trained in science, technology engineering and mathematics (STEM) feel stalled and unable to sustain or progress in their careers. In STEM sectors, women are the majority of graduates in many countries. However, this trend is not necessarily translating into more women entering and staying in the workforce, or occupying skilled roles and leadership positions. A lot of talent is wasted if women with a STEM education decide to not continue their careers in this field. More economic potential for companies and countries can be sustained if women feel more welcome in the STEM sector.
- Responding to emerging net-zero and tech challenges. Shifts to a net-zero, tech-powered industry have the potential to improve women’s participation across the construction and real estate value chain, from board level to contractors. Mega-trends like the low-carbon economy transition, urbanisation or disaster risk-reduction efforts provide opportunities for women to work in the construction and real estate industries to meet the demands for city expansion, energy efficiency, and resilient leisure, business and tourism infrastructures. As entrepreneurs, women are key contributors to construction and real estate supply chains and can help drive innovation and supply chain performance. Women-owned companies will represent over 40% of registered businesses worldwide by the end of 2020. Increasing women-owned SME representation in construction and real estate supply chains can help anticipate customer needs, drive innovation and competition, and enhance brands and corporate reputations.
Gender-smart investment process
- 2X ScreeningThe investor should answer 2X-aligned screening questions before the deal is submitted for approval. The questions below explore gender-based opportunities and focus on the company’s smart inclusion of women across its workforce and supply chain, and its efforts to serve female customers. Screening questions will help determine: (1) If the deal meets thresholds and/or qualifies under the 2X Challenge; (2) if there are potential gender-based opportunities to be explored further in due diligence.
See the Gender 2X Screening Questionnaire for this sector.
- Due diligenceGender due diligence is the process of gathering gender-related data and information from the potential investee company for analysis to determine whether gender gaps present opportunities that may impact performance and affect an investee company’s operations and financials. Deal teams can integrate these questions into existing due diligence workstreams (e.g. E&S, impact, commercial). The investor will collect the due diligence information and proceed to confirm 2X qualification; (2) confirm gender-based opportunities to determine whether to take forward compared to other impact investing themes. Selected sector-specific documents can also be requested to guide due diligence further.
For gender-smart investors, due diligence on gender-based risks and negative impacts is an important aspect of ESG due diligence. Improper screening and poor management of gender-based risks can prevent effective gender-smart investing and have a detrimental impact on a company’s performance in terms of operational costs, reputational damage, stakeholder engagement, employee productivity and loss of confidence.
- Net-zero economy transitionA just transition towards a net-zero economy presents an opportunity for businesses and investors to promote women’s inclusion in the traditionally male-dominated construction sector. Gender balance across the sectors will enable businesses to more easily respond to green construction demands, increase profitability and shift business models towards more energy efficiency and sustainability.
- MigrationMigration will increase pressure on the construction sector to deliver safe and lower-cost housing in high growth emerging markets, thereby presenting opportunities for investees that focus on this market.
- UrbanisationThere is a clear opportunity for women to work in the construction sector to meet the demand for city expansion, although given differential rates of male vs female migration to urban areas and the existing gender balance in the construction industry, many of these jobs may initially go to men.
- Digital IDsSmart cities and increasing gentrification risk more homeless people, particularly women, who often have lower ownership and resilience than men. As a result, governments are under increasing pressure to recognise the right to housing. IDs, particularly digital IDs, are crucial to demonstrate eligibility for affordable housing, and can increase efficiency in the public housing process.
The following resources should help investors and fund managers further develop their gender-smart investing approach in the sector.
- Randstad, Women in Construction: The Race to Gender Equality (2019)
- World Bank, Handbook for Gender-Inclusive Urban Planning and Design (2020) and Gender Dimensions of Trade Facilitation and Logistics (2012)
- UN World Tourism Organisation, Global Report on Women in Tourism (2nd Edition) (2019)
- PwC, Women in Hospitality, Travel and Leisure – 2020 Edition (2020)
- Asian Development Bank, ADB Gender Checklist: Urban Development and Housing (2006)
- TradeMarket East Africa, Finding New Talent in the Logistics Industry (2018)
- WE Connect, The Business Case for Global Supplier Diversity and Inclusion (2017)