Finance – Politecnico di Milano – Progress in Research

Gender Lens Investing: reshaping financial landscapes

Posted on 14/02/202427/02/2024 by admin

A report focused on advancing gender equality through impact investing and sustainable finance was released. ‘Empowering women, building sustainable assets: Strengthening the depth of gender lens investing across asset classes’ was prepared by UN Women, in collaboration with Politecnico di Milano (TIRESIA project), Phenix Capital Group and Bocconi University – Axa Research Lab on Gender Equality.

The report explores the Gender Lens Investing (GLI) market through quantitative and qualitative analysis. The GLI approach places gender equality at the centre of investment decisions with the aim of reducing gender inequality through the strategic allocation of economic resources.

The report highlights the lack of consensus on the definition of equality and inclusion in the financial sphere, stressing the urgent need for better financial literacy. Improving financial education is a key step to incorporate gender issues into investment decisions.

Investors are increasingly aware of the importance of quantifying and reporting the impact of their investments, by adopting measurement practices that consider gender and equality issues, thus actively contributing to the success and positive impact of such initiatives.Top-down initiatives, including stricter regulations, are welcomed by the investment community, and foster the acceleration of gender and equality initiatives.

We have not yet been able to make impact the main focus for financial institutions to generate value.
Mario Calderini, director of Tiresia

The key findings of the report provide a detailed overview of the investment market targeting UN Sustainable Development Goal (SDG) 5, which promotes gender diversity. As of July 2023, invested capital reached the remarkable amount of USD 56 billion, reflecting the growing demand for SDG 5-related impact investment funds. Private equity is confirmed as the most mature impact strategy, as the asset class boasts the largest number of investment funds (41) and significant allocated capital. Investments in real assets – real estate and infrastructure – also saw an increase in initiatives in 2022, despite the limited number of funds.

This groundbreaking report not only reveals important findings, but also highlights the great contribution of Gender Lens Investing to society. By strategically allocating capital to address gender inequality, GLI offers a practical and potentially impactful solution to tackle the chronic underfunding of women’s empowerment and gender equality initiatives.As the world strives to achieve the ambitious goals set by the United Nations 2030 Agenda, this report proves the potential of Gender Lens Investing as a transformative force for positive change, breaking down barriers and paving the way for a more inclusive and fair future.

We have not yet been able to make impact the main focus for financial institutions to generate value.

One of the most immediate reasons to explain why this has not happened is in the composition of the boards of large financial institutions: who was not sitting there? Women. I strongly believe that the impact revolution will depend on more inclusion, more women and more gender diversity in decision-making bodies.

EmFi: a project to create sustainable and inclusive financial circuits

Posted on 03/08/202111/10/2021 by admin

Politecnico di Milano, through its QFinLab, coordinates the EmFi project – A special-purpose virtual currency for the Covid-19 socio-economic emergency in Italy. Partners of the project are Cefriel and Stirling University (Computing Science and Mathematics). Professors Emilio Barucci and Daniele Marazzina of the Department of Mathematics are the project managers for our university.

The project is funded by Algorand Foundation and is run in partnership with Comune di Milano (City Council of Milan), which is interested in validating the platform for supplying vouchers for textbooks to pupils at primary schools (cedole librarie).

The goal of the project is to study digital currencies supported by new generation Digital Ledger Technology (DLT). It is one of the first use cases in Europe of this kind of system for the distribution of aids to final users.

The intervention aims to experiment with special-purpose digital money and sustainable and inclusive financial circuits. Special-purpose digital money is about the management of financial resources for selected beneficiaries subject to pre-defined goals, particularly for the use of resources, like the support for primary school pupils. Sustainable and inclusive financial circuits aim to reach beneficiaries who could otherwise be out with the existing financial system (for instance the unbanked). Such individuals could easily become part of the EmFi innovative financial system, simply by means of a mobile app. Special-purpose money and financial circuits enable advanced interventions, whose desirable properties can be programmed and are supported by the technology.

This project is based on Algorand technology, a breakthrough Distributed Ledger Technology developed by the MIT professor and Turing Award Silvio Micali. Algorand represents a further innovation from models like Bitcoin and Ethereum. Noticeably, Algorand is also sustainable, secure and an extremely efficient technology.

Differently from many current systems for the distribution of resources, such as those based on vouchers or prepaid cards, EmFi relies on digital tokens for the creation of sustainable circuits. One of the main advantages of such an approach is disintermediation.

The COVID-19 emergency has clearly shown how public authorities need to efficiently reach also those potential targets of support interventions who are not included in traditional financial circuits. Applications based on DLTs are currently being studied by institutions like the ECB, many central banks, and regulators. They are of strong interest, since they offer a paradigm shift compared to traditional financial circuits, allowing you to reach individuals efficiently, safely and at limited cost.

The design of such innovative circuits, poses foundational questions, which will be addressed by the project: privacy, fraud prevention, clear identification of target beneficiaries (digital identity), provenance for the usage of resources linking sources to targets, and financial inclusion (particularly for unbanked or difficult to reach target beneficiaries).

Information Hub for alternative financing options

Posted on 06/07/202111/10/2021 by admin

Tag: Finance, Information hub, alternative finance, knowledge exchange
Researcher: Chiara Franzoni
Department: DIG – Department of Management, Economics and Industrial Engineering

Innovation in leadership and finance had been one of the missions of Horizon 2020. The EU funded ALTFInator project Horizon 2020 addressed this with the goal of easing the access to risk finance for companies and supporting innovation of SMEs across Europe.

ALTFInator developed alternative forms of finance for innovative SMEs with a specific geographical location: countries in Southern, Central and Eastern Europe have less opportunities and know-how of alternative financing, this is true for small and medium enterprises. The rationale behind the project was to map the existing financing framework in the participating countries; to collect and make accessible resource material to entrepreneurs and investors, as well as creating a matching architecture of supply and demand, raising awareness of financing alternatives and best practices through workshops and seminars.

The project concluded in April 2020 with the creation of the dedicated web page: an information database of resource material, news, and available financial providers. Among the relevant outcomes, there are national workshops, international best practice workshops and public roundtables.

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