Gender equality is smart economics. It's time to invest accordingly

When government leaders, private investors, development agencies and civil society leaders gathered on the sidelines of this year’s World Economic Forum Annual Meeting 2026 in Davos to discuss the future of financing for women, one takeaway stood out: gender equality was in high demand.

Throughout discussions, there was a broad recognition that investing in women and girls is not a marginal social priority. It is foundational for resilient growth, public health and long-term economic stability.

These takeaways tell an important, bigger story. Right now, leaders around the world are focused on economic resilience, capital markets and growth, and there is a clear appetite to examine those priorities more systematically through a gender lens.

This is no surprise given what the data shows: Removing barriers to women's full economic participation has profound global and local implications.

Closing the gender gap in labour force participation and management roles alone could add $7 trillion to global gross domestic product (GDP), with potential gains of $22-28 trillion if full equality is achieved. In entrepreneurship alone, gender parity could add a further $5-6 trillion to the global economy.

And yet the World Bank's newly released Women, Business and the Law 2026 report confirms that not a single economy in the world grants women equal economic opportunities.

Stakeholders from a range of backgrounds identified four things we can do today to maximize social and financial impact:

Gender lens investing – defined as directing capital towards businesses owned or led by women, that creates quality jobs and advancement for women, or whose products and services improve women's lives – is an evidenced-based approach that delivers both high financial returns and real impact.

A growing number of development finance institutions and forward-looking private investors are adopting this proven approach, but public and philanthropic capital have yet to follow at scale.

The financial returns from gender lens investing are well-documented. The Global Impact Investing Network's 2024 survey of 305 organizations found that 90% of gender investors met or exceeded their financial expectations, with 97% achieving their impact targets.

Who’s at the helm also pays off. The International Finance Corporation's (IFC) Moving Toward Gender Balance in Private Equity and Venture Capital report found that private equity and venture capital funds with gender-balanced senior investment teams generated 10-20% higher returns than male-dominated funds, and that portfolio companies with gender-balanced leadership outperformed peers on valuation growth by up to 25%. These findings represent a convergent body of evidence: gender lens investing clearly pays.

So, what is standing in the way of more investors applying a gender lens? Three things: political courage, capital alignment and execution at scale.

With public budgets tightening, the imperative to deploy finite resources with intentionality has never been greater. Instead of being recognized as the smart investment strategy it is, gender equality is being deprioritized. The difference between success and failure lies in how deliberately we invest in women and girls, and in the systems that support them.

We are in a new era of development finance, and investing in women and girls must span the continuum: grants, concessional capital, blended structures and private investment. While grants remain essential to fund public goods and address market failures, like unpaid care to legal reforms, private capital is indispensable for scale.

This requires not only new financial instruments but applying new mental models: seeing gender equality not as charity, but as a driver of long-term value creation and smart economics.

Leaders in Davos reinforced this point, citing examples ranging from agricultural supply chains mobilizing hundreds of millions in capital while improving women farmers' productivity, to pension and sovereign wealth funds embedding gender considerations, including board diversity and gender bonds, into long-term portfolio strategy.

Momentum for this approach is building. Spurred by initiatives like the 2X Global Challenge, total assets invested with a gender lens now stand at an estimated $122 billion. Yet this remains a fraction of what is needed. Women-owned small and medium enterprises (SMEs) worldwide face a $320 billion shortfall in access to credit. Without the full range of capital being fully engaged, these gaps could grow wider.

A deeper structural issue underpins these challenges: how economies measure value. The World Bank estimates that closing the gender earnings gap could yield $160 trillion in gains in global wealth per capita.

Yet women's unpaid care work, which is worth an estimated 9% of global GDP, remains invisible in national accounts. When economic systems fail to measure certain contributions, they fail to finance them. The International Monetary Fund has itself categorized the underutilization of women's talents as a misallocation of human capital that directly suppresses productivity growth.

Participants at this year’s Annual Meeting in Davos called for linking gender equality explicitly to emerging conversations on redefining economic success beyond GDP.

If gender equality is, as one leader put it, "a health check on our societies", then our metrics must evolve to reflect that reality, including through elevating unpaid care in national accounts (the official statistics through which governments measure economic activity), standardizing gender metrics across asset classes (categories of investment, from public equities to private debt) so institutional investors can track performance consistently, and embedding gender analysis into macroeconomic frameworks.

Investing in women and girls is not about adding another item to an already crowded list of global priorities. It is about strengthening the foundations of our economies: investing in societies, in growth and in the future.

The cost of inaction, paid for in lost productivity, weakened health systems, preventable deaths, and unrealized innovation, is simply too high.

Leaders now face a simple choice: act on gender equality at the scale this moment demands or pay the cost of inaction for generations to come.