Devex Invested: Gender-lens investing struggles amid political backlash

As International Women’s Day approached I found myself wondering about the state of gender-lens investing — especially the 2X initiative that spurred development finance institutions to focus on investments that support women-owned and operated enterprises.

This week marks eight years since the Overseas Private Investment Corporation — the precursor to the U.S. International Development Finance Corporation — launched the 2X initiative, a $350 million commitment that aimed to catalyze $1 billion in private-capital investments.

That led to the 2X Challenge, a G7 initiative also aimed at boosting investments in women-owned businesses, under a set of 2X criteria. That charge was led by U.S. President Donald Trump’s first administration.

It goes without saying that things are different in the current Trump administration, including when it comes to gender and women (this story from my colleagues covering the Commission on the Status of Women at the United Nations this week is just one example). And that shift from an issue that was in fashion to one that is taboo is having ripple effects across the gender-lens investing sector.

While there has been significant growth driven by new guidelines for gender bonds, new larger commitments to a more stringent set of 2X criteria, and ongoing commitments from some DFIs, there are also headwinds.

Angie Madara, CEO of Athena FundX, describes a challenging year in 2025 where she had to abandon plans for a new fund supporting African women microentrepreneurs using a new credit-scoring algorithm after U.S. funding vanished, philanthropic investors went on pause, and some corporate backers pulled out of all inclusion-related investments.

In some areas, this pressure has meant that what these investments are called is changing — using phrases such as “investing in women” or “women’s leadership in business” — or that some investors aren’t openly talking about it. Others are also changing how they make the case for these investments, shifting from making an equity argument to emphasizing the economic case.

“There is evidence to that but also it’s less likely that it would get politically hijacked or that there would be a political backlash because even if you only care about returns and economic metrics, this makes sense,” Jessica Espinoza, the CEO of 2X Global, tells me.

But not everyone is walking away. Maria Smith, British International Investment’s chief impact officer, tells me that while the official numbers aren’t out yet, BII is on track to surpass its 2022 commitment to have 25% of all investments meet the 2X criteria.

“It was a stretch for the organization and I think having this target and embedding the process really did affect behavior,” she says, adding that 2X has become an industry standard.

As BII prepares to release its next strategy, Smith says that 2X will remain central — with the target at a minimum maintained at 25% or potentially increased.

Read: Can the business case save gender-lens investing from political backlash? (Pro)

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Stormy seas

Last week Trump ordered the U.S. International Development Finance Corporation, or DFC, to provide political risk insurance to keep tankers sailing through the Strait of Hormuz despite the war with Iran.

On Friday, DFC announced an agreement on a detailed implementation plan to deploy a $20 billion revolving reinsurance facility. It will apply only to vessels that meet the criteria, DFC wrote, but didn’t specify that criteria. The agency said it has identified “best-in-class, preferred American insurance partners.”

“I am grateful to President Trump and Secretary Bessent for their support and approval of DFC’s plan to restore confidence in maritime trade and stabilize international markets,” DFC CEO Ben Black said in a statement. “Working alongside CENTCOM, DFC coverage will offer a level of security no other policy can provide. We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world.”

Shipping traffic has slowed dramatically with the risks stemming from the conflict, but Lloyd’s Market Association said that the majority of the vessels that have remained at anchor in the area and delayed transit are insured in the London insurance market. LMA also pointed to other factors that have slowed movement, including concerns for the safety of vessels and crew, along with availability of salvage services.  

“We look forward to collaborating with the relevant parties, including the US Development Finance Corporation, to continue supporting shipowners and to facilitate global trade and economic stability,” LMA said in a statement.

Further details about the reinsurance facility are not yet available, but I’ve heard plenty of questions about what this could mean for DFC. There are questions around pricing, DFC’s ability to deliver insurance quickly, how it would be funded, and how this aligns with DFC’s development mandate.

One of the key points of debate in the U.S. Congress around DFC’s reauthorization was about whether it would retain its development mandate or serve as more of a political vehicle for foreign policy priorities. This move will likely renew some of these questions.

Credit check

You may remember back in October when I wrote about new guidance from S&P Global Ratings about the methodology it uses to rate and assess risk and multilateral development banks. At the time, Moody’s Ratings had signaled it might reassess its ratings — and it has.

The firm published a request for comment proposing updates to its ratings for multilateral financial institutions. The changes include introducing a risk-adjusted capital ratio, refining its approach to preferred creditor status in part due to the availability of more data, incorporating new types of capital facilities in the definition of usable equity, and reconfiguring the strength of member support factor.

There is no target date for entry into force yet, and Moody’s expects few ratings changes based on the new methodology, officials said during an online event.

When S&P made its changes, it said they could unlock $600 billion to $800 billion in additional sovereign lending capacity at the MDBs — but experts warned that changes at only one ratings agency was unlikely to change lending behavior. That becomes more plausible now that Moody’s is on board, but it’s unclear whether or how quickly MDBs would ramp up lending as a result.

ICYMI: Could a credit ratings agency methodology change unlock billions at MDBs?

Climate critics

Two legal experts are arguing that multilateral development banks and their shareholder governments could be breaching international law by financing fossil fuel-related projects. And a coalition of civil society organizations is seizing on a new legal opinion the pair wrote to call on four major MDB to meet their climate obligations, my colleague Jesse Chase-Lubitz reports.

“[The opinion] is the first to address the legal obligations of multilateral development banks and their member states to act on climate change,” Jason Weiner, the executive director and legal director of Bank Climate Advocates, which commissioned the legal work, tells Devex. “We see this as a watershed moment for climate ambition at MDBs.”

Bank Climate Advocates and 33 other organizations wrote to the European Investment Bank, the Inter-American Development Bank, the Asian Infrastructure Investment Bank, and the African Development Bank to inform them of their climate obligations under international law. That follows similar letters sent to other MDBs late last year.

Read: Legal opinion warns development banks may violate climate law

When in Rome

World Bank President Ajay Banga laid out its jobs focus at an event in Rome, Italy, last week, where he also met with Pope Leo XIV.

The three pillars of the bank’s approach to jobs are infrastructure (both physical and human), business-friendly regulatory environments, and helping the private sector scale.

It will also focus on sectors that create jobs where people live including energy and infrastructure; agribusiness; health care; tourism; and value-added manufacturing, including critical minerals, he said.

“The evidence across time is clear: Countries that have sustained growth and expanded employment have done so not through isolated projects, but through steady improvements in their business environment — reforms that were sequenced, implemented, and maintained over time,” Banga said.

What we’re reading

Funding for Africa clean energy financing surges despite fewer project approvals. [Associated Press]

U.S. Export Import Bank chief details what’s in Trump’s Project Vault. [Devex]

Angola gets World Bank, MIGA loan guarantees for debt-for-education swap. [Reuters]

Beyond debt reprofiling: China’s role in global south development. [Boston University]