Social Inclusion & Human Rights

3 Ways Women Are Shaping Impact Investing

Impact investing has become a significant player in the world of finance, with $502 billion in assets under management globally. Women have played, and continue to play, critical roles in shaping every facet of the sector.

In comparison to traditional finance, women are better represented in environmental, social, and governance (ESG) investing, Fortune recently noted. Irene Mastelli of Phenix Capital explained why she thinks this is the case. “I think the answer lies in the fact that this sector is inherently—perhaps by design—more diverse and equitable.” As a new and evolving area, sustainable investing may also offer more quality career opportunities for women.

Whatever the reason, what is indisputable is the impact women have had. Here is a closer look at their work in three particular capacities—as investors, entrepreneurs, and leaders.

1. Investors

Research suggests that a high percentage of women are drawn to investments with social and environmental impact. For example, a Morgan Stanley study found that 84% of women versus 67% of men indicated an interest in sustainable investing. Those views are particularly relevant in light of how much wealth is in the hands of women: in the US, they control almost half of estates valued over $5 million and are predicted to inherit around 70% of the $41 trillion to be transferred over the next 40 years, according to Maximpact.

What is more, many trailblazers in the impact investment field are women. For example, pioneering venture capitalist Nancy Pfund founded DBL Partners to focus on companies that seek both a financial return and social, environmental, and economic improvement in their regions where they operate, as well as encouraging the integration of impact into corporate culture and operations. Tracy Palandjian, co-founder and CEO of Social Finance, has played a key role advocating for social impact bonds and pay-for-success models. Durreen Shahnaz, founder of IIX, aims to create a soup-to-nuts impact investing system in Asia.

2. Entrepreneurs

Many women are also creating enterprises that target a wide variety of social and environmental issues. For instance, Janice Omadeke founded The Mentor Method, a software that facilitates mentor matching to develop diverse employees into leaders while strengthening workforce retention. Some women-led enterprises are explicitly addressing the needs of women and gender equality. For example, Yelitsa Jean-Charles created Healthy Roots, a toy company with a mission to empower girls by creating toys that represent beauty from a diversity of backgrounds and communities.

Other entrepreneurs focus on impact investing itself, making it more accessible to regular investors. Catherine Berman and Yuliya Tarasava’s CNote, for example, is a platform that aggregates a large network of Community Development Financial Institutions (CDFIs) with a variety of thematic investing targets, such as immigration issues, affordable housing, and racial equity. Others target everything from repurposing waste to selling low-cost solar-powered lighting to communities without electricity.

Women have assumed significant leadership roles across the impact investing world, including spearheading and guiding efforts in everything from impact measurement and gender-lens investing to academic research and government policy.

3. Leaders

Women have also assumed significant leadership roles across the impact investing world. That includes spearheading and guiding efforts in everything from impact measurement and gender-lens investing to academic research and government policy. In some cases, they have moved among different sectors within impact investing.

For example, Sonal Shah, founding executive director of the Beeck Center for Social Impact + Innovation and a professor at Georgetown University, also founded the White House Office of Social Innovation and Civic Participation. In the private sector, at Google, she was the head of Global Development Initiatives and also developed the environmental strategy for Goldman Sachs.

Ruth Madrigal, another impact investing advocate in both the public and private sectors, now a principal at KPMG, was an attorney advisor in the Treasury Department’s Office of Tax Policy, where she spearheaded new program-related investment guidance for foundations.

In addition to blazing the trail for impact investing, women have also often been the beneficiaries of its successes. One of the earliest impact investing initiatives, microfinance has been used to lend money to low-income women to help move them out of poverty. “When we think about closing the wealth gap, it is hard not to think about issues like women’s equality and racial injustice,” CNote’s Berman told Triple Pundit.

Still, there is much work to be done regarding gender equality, even in the social enterprise sector.

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