This sector profile focuses on gender-based opportunities and gender-smart investing as an investment strategy for the healthcare sector. It aims to support investors and fund managers to identify existing and future opportunities. See CDC’s full Gender Sector Brief for the evaluation of healthcare investments, including screening and due diligence questionnaires and quick facts.

Gender-smart investing is smart business. We know that companies that perform well on gender inclusivity return greater profit. We also know that women are highly represented across the healthcare sector as employees, particularly in nursing and administrative roles, yet their value can be overlooked. We also know healthcare investments can directly and indirectly impact women’s economic empowerment: directly through jobs creation in the formal sector; indirectly through increasing women and girls’ access to health, including reproductive and sexual health. This highlights a significant business and impact opportunity.

Adopting gender as an investment strategy can help investors maximise their contribution to the United Nations Sustainable Development Goals (SDGs). There is significant potential for investors in the healthcare sector to link their gender efforts to SDGs, shaping gender outcomes in line with SDGs 3, 5 and 10, linked to good health and wellbeing and reduced inequalities.

Guidance on ESG issues and opportunities linked to the healthcare sector, including gender-based environmental and social risks, is provided in the CDC ESG Toolkit for Fund Managers.

Why take a gender lens to healthcare investments?

  • Business case

    • Improving workforce productivity: Improvement in women’s health increases productivity in two ways (i) directly, such as through a reduction of days lost to sickness or disability; and (ii) indirectly, through lessening the need for informal care by family members or friends who may also be part of the labour force. Improved women’s health can also free resources that can be used for child healthcare, education and feeding, contributing to an increase in future productivity.
    • Enhancing productivity, innovation and performance: Increasing gender diversity and inclusion in doctors and leadership roles in the sector can help healthcare businesses strengthen their productivity, drive innovation, optimise team performance, and increase levels of engagement. Women make up the vast majority of the health workforce – globally they make up 67% of employment in the health economy. However, men occupy most doctor and leadership positions. Looking at the Fortune 500, while women take 75% of healthcare jobs, only 21% access executive or board member roles. In Nigeria, 35% of doctors are women, in the Democratic Republic of Congo 14.5% are women and only 11.6% of all private health facilities are owned by women. In Africa, the healthcare sector has the highest percentage of female “leakage” (the share in women in senior management minus the share of women in non-management positions).
    • Improving healthcare utilisation rates: Out-of-pocket (OOP) payment for healthcare punishes the poor and penalises women in particular. There is overwhelming evidence that OOP payments for healthcare, a significant form of health system financing in Africa and South Asia, has led to an overall decline in the utilisation of health services. A World Health Organisation (WHO) report shows that even when the fees charged are low, they discourage utilisation. OOP payment presents a particular problem for women in Africa, because women are often dependent on men financially, and so their access to purchased health services depends on mens’ decisions. The report shows that where OOP payment is discontinued, utilisation rates rise.

  • Impact case

    • Increasing equal access to health: Many rural areas in Africa have few midwives, as women are less willing to work in rural areas due to safety concerns, and because women may be reluctant to receive care from a male, they may not seek care from a trained health worker as they are predominantly male. The same trend is observed in India, where a lack of female doctors in primary healthcare centers affect the access to healthcare services for female patients. In developing countries, 200 million women do not have access to reproductive health and means of contraception; every day 800 women die giving birth; complications from pregnancy and childbirth is the leading killer of adolescent girls.
    • Boosting economic growth: It has been estimated that 30–50% of Asian economic growth between 1965 and 1990 was attributable to favourable demographic and health changes that were largely a result of reductions in infant and child mortality, and subsequently in fertility rates, as well as improvements in reproductive health. In addition, because women are the dominant source of farm labour across developing countries, and the mainstay of Africa’s economy as a whole, investing in their health would generate significant economic gains. Similarly, it is evident that improving maternal health has socioeconomic benefits. The health of mothers is vital to the health of their unborn children.
    • Tackling gender gaps in medical education: In India, over 70% of medical students are female, yet only 16% of doctors are women. Pakistan also reports similar figure for female medical students and doctors. Studies observe that this is likely due to the demanding and inflexible nature of work, with long working hours and a dominantly male environment that make careers less attractive and accessible to mothers who work full-time, as well as managing the home and family., In addition, female medical students report facing sexual harassment during their studies, as well as cultural pressure to forego their studies and focus on the household.

Gender-smart investment process

  • 2X Screening
    The 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 diligence
    Gender 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.

    See the Gender Due Diligence Questionnaire for this sector.

    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.

Emerging trends

  • Pandemics and epidemics
    Studies show that infectious diseases often affect one gender more than the other. Across Guinea, Liberia, and Sierra Leone collectively, women comprised 55-60% of deaths associated with Ebola outbreaks. This is driven by the fact that women are often the primary caregivers for the sick, and continue to be so during epidemics. In addition, health professionals and health facility staff are the most exposed and at risk of contracting viruses. Ultimately, investments in the care economy (childcare, elderly care) have the potential to build more resilience and increase opportunities for women. Care infrastructures and services can be essential to enable women to continue to stay in employment.
  • Digital IDs
    Lack of official IDs disproportionately affects women in developing countries: in low-income countries, 45% of women lack ID, compared to 30% of men. A lack of official ID may prevent people from accessing educational opportunities, financial services, health and social welfare benefits.
  • Biological breakthroughs
    Biological breakthroughs can be used in developing countries to improve health outcomes, for instance through embeddable sensors for health monitoring, personalised medicine, and genome sequencing. However, new treatments are likely to be less affordable, particularly for women, and research and development into women’s health is typically lower than that of men. As a result, there is a risk that women get left behind in the gains of biological breakthroughs.

Additional resources

The following resources should help investors and fund managers further develop their gender-smart investing approach in the sector.