According to a 2014 study by KPMG, gender-based violence (GBV) costs South Africa between R28.4 billion and R42.4 billion per year – or between 0.9% and 1.3% of GDP annually, which is sadly, in line with global GBV estimates. These costs include health, justice, and other service costs, lost earnings, lost revenues, lost taxes, and second-generation costs, which are the cost of children witnessing and living with violence, such as increased juvenile and adult crime.
The study emphasised that GBV prevents an economy from attaining its full economic potential: “Aggregate Demand is skewed towards goods and services related to the effects of violence thereby diverting resources from their optimal use, resulting in lower economic growth and a reduced standard of living... Aggregate Supply is reduced through lower productivity, reduced output and exports, and reduced savings and investments... Additionally, the reduction in output is even larger because of the economic multiplier whereby a rand lost represents more than just a rand. Rather it includes the lost savings and spending that is passed on to others to save and spend many times over.”
It's time to acknowledge that GBV is not just a social risk but a ubiquitous chronic risk that affects multiple industries, sectors and geographies. For instance, from a political risk perspective, “the overall level of violence against women is a better predictor of state peacefulness and relations with neighbouring countries than indicators measuring the level of democracy, level of wealth, and civilizational identity of the state.” In other words, no other tested measure is better at predicting future political instability than a country’s levels of GBV.
From a corporate financial risk perspective, GBV contributes to absenteeism and low productivity. In addition to the social effects suffered, female victims of domestic violence have significantly lower propensities to turn up for work on time, to work productively while at work and to stay in the job. From a market risk perspective, there is the inefficient use of that 0.9% - 1.3% cost of GDP as well as the lost family income.
And if we accept that the risks of GBV are this extensive, then the tools to address it do not reside only with government, community organisations and individuals. South Africa’s corporations and financial institutions have both the responsibility and the opportunity to prevent and respond to GBV.
At the Bertha Centre for Social Innovation and Entrepreneurship at the UCT Graduate School of Business, we have spent nearly a decade working on innovative financing strategies for a range of social issues. Inspired by the work of the Criterion Institute in the US, a long-time supporter of GBV prevention through finance, we have developed a set of suggestions for South African corporates and financial institutions designed to support large-scale action. 1. Collect data to support action
To start with, we need to begin collecting data on the impact of GBV. As it stands, South Africa suffers a dearth of data on GBV and its effects on society. There is currently no recognised national prevalence rate for GBV or violence against women nationally, and, since government spending on GBV is not ring-fenced, it is unidentifiable in national expenditure data. While policymakers move to create large scale data collection initiatives, corporates can start to collect relevant data from employees and clients and make that data transparent. Financial institutions can help to accelerate this process by requiring reporting on GBV data. 2. Develop evidence-based programmes to respond to and prevent GBV
Next, we can use this data to begin to shift processes in institutions to allow for compassionate responses to domestic violence and other forms of gender-based violence. For example, National Australia Bank's programme “NAB Assist” provides hardship extensions and appropriate access to services for its clients including family support, counselling, men’s behaviour change programmes and more. In the first year of the programme, the bank saved A$70m in costs related to capital recovery and delinquencies. In the second year, they saved A$200m. Internally, corporates should design and support employee wellness programmes that include gender transformative trainings that challenge gender norms for the prevention of GBV, and healing programmes that address the trauma and mental health consequences of GBV. By using GBV data as an integral part of designing internal and external programmes, corporates can help to address the root causes of GBV in addition to reducing the economic impact on society and their business. 3. Use data to support better investment decisions
We also need to use this data to make better investment decisions. For institutional investors, this will start with identifying fund managers best positioned to address the root causes of GBV, such as gender lens investment funds, and creating mandates for other investment managers around addressing the root causes of GBV and requiring reporting on GBV data. Additionally, proxy voting can be used to influence companies to report on and improve their performance around GBV relevant data.
For direct investors, now is the time to channel capital to companies or investments making a difference in the area of GBV. There is a plethora of investment opportunities that both directly and indirectly contribute to GBV support. Investment in female entrepreneurs is a quick win in terms of shifting power dynamics and empowering women. Currently only a tiny proportion of venture capital is allocated to women-run companies globally (2.2% in the United States, and less than 1% in the UK) but the tide is turning. Angel investing networks like DazzleAngels and investors like Alitheia IDF are earmarking their capital specifically for female-run businesses, empowering women to take ownership of their economic future and that of their families.
Investors can also put capital behind companies championing behaviour changes or providing support services to GBV. There is a myriad of opportunities, from tech-based safety apps (such as Namola, a free emergency response tool or MiBlackBox, a virtual witness to volatile and emergency situations, of ChafHer, a female-driven ride hailing service) to advertising companies that prioritise empowered gender stereotypes and campaigns, to legal firms with a focus on domestic violence cases.
Investments in related areas associated with the underlying causes of GBV offer the opportunity to prevent factors likely to result in violence against women. Food insecurity, poor mental health support, and poor education have all been correlated with increased incidences of GBV. Intentional investments into sustainable food, quality healthcare, and affordable education can all go a long way to preventing the underlying causes of GBV.
It’s clear that the time for action against GBV is here, and there are significant opportunities for corporates to take action. The first step is recognising and unlocking the value of data in understanding GBV, and then using this data to design programmes and make investment decisions that address the underlying economic and social issues of GBV. With a few targeted interventions and intentional decisions, South Africa’s corporate and financial sectors hold the power to both stimulate the economy and create a safer country for South African women. Aunnie Patton Power and Natasha Dinham work in the Innovative Finance Team at the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town’s Graduate School of Business (GSB).