Women are making a noticeable difference in the realm of impact investing, whether they are investors, managers, or leaders. I was interested to discover a bit more about some of the women at the forefront of this trend in investing.
Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing, has a diverse career behind her. A former foreign correspondent and bureau chief for The Wall Street Journal, she then held a number of senior policy positions in both the Clinton and Obama Administrations, the FCC, and Commerce Department. Choi believes that private investment can go a long way toward mitigating impending climate-related change.
In a recent TED talk, Choi explains that the concept of impact investing can be potentially more profitable that general investing:
“If you had invested a dollar 20 years ago in a portfolio of companies that focused narrowly on making more money quarter by quarter, that one dollar would have grown to 14 dollars and 46 cents. That’s not bad until you consider that if instead you’d invested that same dollar in a portfolio of companies that focused on growing their business and on the most important environmental and social issues, that one dollar would have grown to 28 dollars and 36 cents.”
Choi further argues that impact investing does not need to be a niche or “nice guy” investing. Making business decisions that save energy or plans for long-term success while also positively affecting the community add up to returns for investors.
Deborah Winshel, head of BlackRock Impact, believes big data is essential to the success of impact investment managers. The former president of the philanthropic Robin Hood Foundation uses data as both screening and measurement tools. Add in BlackRock’s risk management platform, Aladdin, and you have the potential to leverage all that big data has to offer. Winshel notes that in her tenure at BlackRock, she has seen two themes emerge: a broad ESG approach that simply involves investing in companies with socially/environmentally responsible ethics. The other trend focuses specifically on a particular issue, such as climate change or diversity. Like Choi, Winshel does not believe that impact investing involves sacrificing return for ESG-type responsibility: “There are a number of studies that support the fact that ESG investments can potentially perform as well as—if not better than—traditional strategies.”
In contrast to other areas of financial services, the percentage of women who start, lead, and manage companies having to do with impact investing is far greater, and the link between women and impact investing opportunities is well established. As impact investing increasingly becomes mainstream, will the same go for gender equality in financial services?