“Female Investors for Social Justice”: A highly topical issue, and having it expertly unpacked by a top-ranking researcher and practitioner in the field is a rare privilege. This became a deeper dive into the topic by Dr Vanina Farber, Director and holder of the elea Chair for Social Innovation at IMD, one of Switzerland’s most prestigious business schools, as, due to unforeseen circumstances, Kristin Hull of Nia Impact Capital was unable to join.
GFL founder, Sigrid Bauschert, welcomed participants from around the globe and introduced Vanina to us. Her background as an economist and political scientist specializing in social innovation, impact investing and sustainable finance, combined with her extensive experience in teaching, research and consultancy with academic institutions, multinational corporations and international organizations has given her profound insights into an aspect of investing that we all need to know more about.
What is so important about impact investing?
Although we’ve all become more aware of ESG recently, Vanina gave added meaning and focus to what has been pushing the global financial sector towards Environmental, Social and Governance-oriented investing. Her interest at the social innovation centre she leads is to identify how the market addresses issues as complex as social justice or gender equity, and how to structure solutions that are driven by the private sector by mobilizing private capital.
What is active impact investing?
Among many other factors, Vanina discussed the significance of intentionality – how impact investors are focused on solving social and environmental problems, so therefore not only engage with companies that are inherently “good”, but, crucially, use their investment as an instrument to effect change for good – thereby having a direct impact on global organizations. She cited the case of a small activist shareholder group effecting genuine change in a shareholder meeting; through their intervention, they gained three seats on the board of Exxonmobil, forcing the company to become more transparent about its climate transition plans.
There were many other examples around gender equity, and Vanina went into great detail about this aspect of impact investing. Kristin Hull herself had demonstrated active ownership with her own investment company: as an investor in Tesla, during a shareholder meeting, Kristin challenged the company’s use of mandatory arbitration policy in cases of sexual harassment and racial discrimination. Although not yet successful, Kristin’s policy is not to divest (after all, the companies will still get money from somewhere and won’t change) but to maintain her investment and continue to push the issue until the company is forced to change.
Is background important?
Vanina pointed out that many of us have been privileged to have achieved leadership positions by having access to resources which have helped us make it. This brings with it a certain responsibility to help build the kind of ecosystem that creates a bridge for those who are less privileged – and she cited the Global Female Leaders as exactly the kind of network needed to bring together women of all ages, types and interests to leverage our assets and our collective knowledge.
Apart from Kristin, Vanina also mentioned Sallie Krawcheck who co-founded a company called Ellevest after being fired from Citibank during the global financial crisis in 2008 “for being ethical”. With her all-female staff, Sallie’s knowledge of women’s very specific financial needs is both insightful and feeds directly into the design of the company’s products tailored for women.
The compelling question for Vanina was this: how to align who you are and your own values to put that at the service of social justice or other women. In the case of both Kristin and Sallie, it’s not just about the product – selling financial instruments for retirement or managing investors’ capital to align with their values – it is about education and bringing together other women to create a movement.
In effect, said Vanina, summing up, we’re trying to be forward-looking. We are trying to put our money into driving the change we want to see, so if we invest more of our money, those companies will become more profitable, and the overall outcome will be positive.
Takeaways from this virtual talk
We can express our values through finance and push the agenda for change especially in topics that are dear to us, including gender equity.
We need to collaborate to find ways to change the face of finance as well as actively bring change to companies we invest in.
Companies have to measure more than numbers – women on the board, etc. They must begin to measure impact as well as financial results, so impact investors can have all the metrics.