Women Lead the Charge in Values-Aligned Investing
A recent webinar hosted by Interactive Brokers explored the benefits that women are bringing to the financial world.
The idea of impact investing has taken the world of finance by storm, with women leading the charge and playing critical roles in shaping the future of investing. According to Fortune, “men rule [the finance] world, except for one key field: The fast-growing arena of what’s known by the shorthand ESG.”
Similarly, a survey by RBC Wealth Management concluded that women are twice as likely as men to claim that it is extremely important that the companies they invest in incorporate ESG factors into their business models.
ESG investing takes into account non-financial factors such as the environmental, social and governance impacts of a company. According to CNBC, about one-third of millennials often or exclusively use investments that take ESG factors into account, compared with 19% of Gen Z, 16% of Gen X and 2% of baby boomers.
The younger generation is dedicated to aligning their investments with their personal values, and, according to Fortune, 57 percent said they have sold stock when they think the company is not serving the best interest of society or our planet. The financial impact of the younger generations and women on ESG investing has been profound–ESG grew tenfold in just two years.
Interactive Brokers is dedicated to gender equality and helping women become strong investors. IBKR Webinars by Interactive Brokers gathered a group of female leaders in business, finance and investing who have impacted the world with their inspiring work for their “Women Investing for Impact” webinar.
The timely event took place during Women’s History Month. It brought forth the knowledge and advice from three inspiring and successful women seeking to make a difference in the world through investment. The conversation delved into topics surrounding transparency and integrity in investing, and how women are leading the way in values-aligned companies.
The panelists have each spent their careers making, guiding and encouraging impact investments, enhancing opportunities for girls and women around the world and promoting other environmental and social priorities. (See end of article for their full bios.)
What is Impact Investing?
By unleashing capital's power for good, impact investing looks to generate positive ESG effects alongside financial returns. The goal is to provide funds to address the world’s most pressing challenges.
Motroni notes that “every dollar we have invested in private or public markets is having some sort of impact – positive or negative.” However, she presses the importance of measuring impact and warns that “there's a lot of products that claim to be impact investments, and unless that impact is being measured, I don't think we can call it an impact investment.”
As for Simons, she believes “that we are in a global emergency that is unlike anything we have ever faced before.” So now, more than ever, “it's extraordinarily important that we question our assumptions and integrate philanthropic strategies as well as venture investment into our portfolios.”
Lerner mentions how her impact investments are doing better in the market than some traditional portfolios. All it takes is time to ask the questions, find out what you are invested in, and make adjustments to better align your portfolio with your morals and values.
Why Women Matter In Socially Responsible Investing
Women and younger generations are driving the movement towards socially responsible investing. Women care about impacting their communities and families for the better. Motroni points out the reality of this situation – women are making more money than ever before and hold decision making roles.
But why do they care more? Motroni believes the reasoning for female participation in values-aligned investing could be deeply rooted. “Women, over time, have had to fight for equality,” she expresses. “We feel a connection to marginalized communities in a way that, frankly, white men in America who have traditionally run the financial industry and led conversations around family wealth maybe haven't had to be in,” she hypothesizes.
Women Lead Change
Not only are women strong and equitable investors, but leaders in systemic change. Simons brought up that “global research keeps revealing that when you invest in the status of women, everything improves – economy, health, ecology, and governance. So it’s this systemic highly-leveraged trim tab that women’s leadership seems to affect everything about society.”
Simons also brought up the analysis Paul Hawkins included in the book, Project Drawdown, encompassing all viable factors that could affect the current climate emergency. She recalls that the research found that the impacts of increasing women's leadership, the education of women and girls and the sovereignty of reproductive rights are among the top strategies to combat and address climate change.
According to Simons, the impact of female empowerment is “phenomenal and clearly an emergency we all need to be aware of in our comprehensive strategies.”
Similarly, Lerner runs her business, foundation, and philanthropic funds through the lens of the underrepresented. For her, “community building, helping women learn advocacy to be able to go to their governments to make change, helping them with microlending and microfinance to help them have the capital to be able to increase and help their families” is what she is passionate about.
She funds several women-run organizations and is inspired by their success, ability to create healthy communities and ambitious goals. For example, she has spent a lot of time in Haiti and still funds a group of 250 female agricultural farmers and owners of their land.
“Not only do I provide seed, experience, and mentorship, but they use part of my capital to help survivors of gender violence,” Lerner remarks. “There's a lot of different places you can put your money and your capital that’s going to make a difference.”
Addressing Social Inequalities with Financial Decisions
Lerner notes how she carries the same values-driven mentality when dealing with every aspect of her life, and a lot of people don't align all sectors of their lives, and there are several ways to change that. Lerner claims she predominantly funds grassroots organizations “because I truly believe that we will make change from the ground up.”
Motroni recommends looking into Community Development Financial Institutions (CDFIs) to empower women and business owners locally. “CDFIs are still in the business of lending to often marginalized or female entrepreneurs at really fair rates. They offer a lot of wrap-around services around financial literacy classes, business coaching classes, and help lift up communities from that aspect.”
With hope for the future, Simons believes that “like culture, economy can change with us and our relationship with money is what’s necessary in order to change it. So changing our relationship to resources and how we manage them, and how we understand them in relation to our lives and the world we’re living in is essential for everybody and especially essential for women at this time because … it seems that we carry a different quality of awareness about downstream impacts about multiple effects of our choices.”
Lerner adds a vital point, claiming that “it's not just about giving people money and helping them with money, it's training them.” For example, she refers to an organization in Haiti that trained 1,000 female beekeepers who previously had no source of formal income. “We have created a mini economy, and now they are making co-operatives together,” Lerner adds and continues to press that “it's not just about investing money, it's about investing your talents and expertise.”
What Makes a Great Impact Investor?
Motroni looks back at the despair she felt when she realized the cyclical nature of capitalism. She noticed that “a lot of the time, we make our money at the expense of the environment and the planet. Then, when we have enough money, we give back to try and fix the issues that we may have caused in the first place because we were hungry for money or power.”
With optimism, she started to ask questions like
- “What if our money can actually work for us?”
- “What if our money can work for the rest of the world?”
- “What if we can align our investments so even in the space where we are focused on making money or building a company or building success, that we are creating a better world through that process.”
Acknowledging the reality that our money can foster growth and development is the starting point. Lerner claims, “you’ve got to care about other people, and you have to do it with heart and love. You have to start with that premise in your head about what you want to do, and then you’ve just gotta find things you're interested in.”
When looking back at her own journey towards impact investing and philanthropy, Lerner says she put herself out there to meet people. “I met other women doing incredible things, and I learned from them. I spent a lot of time learning before I got involved in anything.”
Getting clear on your values is the next step. Motroni mentions how many private investors are interested in climate change, but in reality, that’s a huge field. She advises thinking about what specifically in that realm you care about most.
Motroni elaborates on how “impact investing is such a personal journey around what do I care about and what are my personal values and what do I want my legacy to be in the world.”
Elaborating on that point, Simons offers up her definition of an impact investor as being “all about the alignment with one's own sense of purpose or a calling,” continuing that “it gets to the questions of – what gives your life meaning and purpose? And what do you care most deeply about? Because that’s ultimately going to fuel you for the long haul.”
Spreading Financial Knowledge
The inspiring women on this panel have great hopes for a better, more sustainable and equitable world. The growing power women are gaining in the financial sector is a turning point for humanity. Lerner believes that “parity will change the world. Parity will change everything.”
Simons reminds us that “your money is having an impact whether you know about it or not, so learn about it,” since “any investment choice is going to affect the community and social realm that we live in.” And, most importantly, that “one of the greatest underutilized resources we have as women in the world is the tremendous capacity to strengthen each other by coming together in an authentic alliance.”
Watch the entirety of the captivating webinar to learn more about the challenges that panelists have faced, resources for embarking on impact investing, and advice on how to move forward with financial awareness.
Suzanne Lerner is the Co-Founder and CEO of the fashion and lifestyle brand, Michael Stars. Michael Stars was one of the first brands to bring social responsibility to its business model by ensuring fair wages and a commitment to local sourcing and manufacturing. As a result, the company was awarded the California Apparel Social Responsibility Award by the Los Angeles Business Journal.
Lerner also established the Michael Stars Foundation, which focuses on funding grassroots and community organizations to build critical pathways to gender and racial equality. She serves as a director on several nonprofit boards, including the Foundation Board of the ACLU of Southern California, the ERA Coalition, the Ms. Foundation for Women, and an advisory board member of Prosperity Catalyst and Children Mending Hearts.
Additionally, she is a member of the Women Moving Millions, Forbes Business Council, Women Donors Network, and the Women at Sundance initiative. She received the “Woman of Vision” Award from the Ms. Foundation for Women, was recognized as one of “21 Leaders for the 21st Century” by Women’s eNews, and as 2020’s “25 Most Influential Angelenos” by Angeleno Magazine.
Nina Simons is the Co-founder and chief relationship strategist at Bioneers and its Everywoman’s Leadership Program. Bioneers is an innovative nonprofit highlighting systemic and breakthrough solutions for restoring people and the planet.
She is a social entrepreneur who is passionate about the power of women to transform the world, reaching racial and gender justice, elevating indiginous knowledge and rekindling a sacred relationship with nature while co-creating a just transition that’s regenerative and peaceful.
She authored the award-winning book Nature, Culture & the Sacred: A Woman Listens for Leadership. She was named a recipient of the Goi Peace Award in recognition of her pioneering work through Bioneers to promote nature-inspired innovations for restoring the Earth and our human community and was honored with the Robert Rodale award. Simons is a long-time member of the Women Donors Network and other progressive philanthropic member organizations.
Ali Motroni is an impact investing advisor at Align Impact, an RIA and B corporation with $1.6 billion of assets under advisement. She helps to leverage the power of private capital to create a world that works for people and the planet. Before joining align, Motroni worked in account management and business development at Stryker and Eli Lilly.
Parallel to her corporate track, she started Switch, an anti-trafficking nonprofit focused on awareness, prevention, intervention and restoration of sex trafficking survivors. She also started a social impact community for professionals in Los Angeles, hosting speaker events, film screenings and facilitating conversations about purpose and work.
Motroni also recently joined the board as treasurer of Exen, an organization focused on providing spiritual direction through wilderness trips. In 2021, Motroni was a Praxis Academy Investment Track host and a Christian Economic Forum delegate.
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