nl
Komende september verschijnt bij Walburg Pers de uitgave IMPACT - een bundeling van interviews met filantropie influentials - van DDB Expert Rense Bos. Hierbij vast het interview dat Rense Bos hield met de Australische nieuwe-generatie impact investeerder Bec Milgrom, die op gestolen land woont.
BEC MILGROM:
'IMPACT INVESTING IS COLLABORATIVE'
Bec Milgrom shows how the new generation is creating impact. Three years ago, together with her brothers, they launched their 100% impact, Australian based, family office with the name: Tripple. Their mission is to use capital as a force for good and invest in people and organisations around the world working on solutions to some of our greatest global challenges.
Why are you in this impact investing world?
My grandfather was born in Romania and came to Australia in the 1940's to escape the persecution of the jews. Together with my grandmother and her family they built a fashion retail business that my Mum eventually took over. They are smart and lucky business people and were very successful which meant that we grew up with privilege and wealth. We grew up knowing that we were really lucky and were obliged to give back to our community but my parents mostly sheltered me and my siblings from the fact that we were wealthy. They very deliberately made sure we did not grow up entitled but the result of that was that I was really disconnected from that part of our experience. I spent the majority of my late teens and twenties pretending the wealth didn’t exist and in my mid 20’s I moved to the US, bought a cheap car and ‘lived paycheck to paycheck’.
As I got older and became more aware of our global challenges, I started making life decisions that were actively in line with my values. I worked for a small company, spent more time outdoors, tried not to buy things I didn’t need, ate plant based food and used all my energy for good. On my return to Australia after those years away in the US, it was really apparent to me that I wasn’t really using all my energy in line with my values. There was this resource that I had tried to hide from all those years. This untapped source of capital energy that could be harnessed for good. That’s when my brothers and I sat down and started to talk about what we could and should do about that untapped resource and thanks to the sale of a legacy family asset, Tripple was born. For us, any investing was always going to be 100% impact focussed. Simply, I came to impact investing as a result of looking at my whole world and seeing what resources I had, acknowledging that when you have ability you have a responsibility and then putting that energy to work to create a better future for everyone.
Was there a certain event why you started with impact investing?
No, it was a slow unfolding, and it continues even now. I’m still struck by the injustice of being born so privileged when so many are not. There is quite a deep discomfort around that. We are so lucky for so many reasons. Being born in Australia was really lucky, being born in a stable house was really lucky, being born within a loving family was really lucky, as well as being born into a wealthy family. When you have those things and more, you have a responsibility. I didn’t want that responsibility because it can be hard to own up to the complexity of that responsibility and know you’re part of a system of injustice.
Why do you want it now?
I think when you realise you have the capacity to do good and you’re not using it, it’s really uncomfortable to stay in that moment. The opposite is that you do something about it. And then the more you do it, the more joyful it becomes. It’s really joyful work. I consider myself extremely lucky to spend my days talking to people with amazing ideas trying to solve complex problems and create a better future for everyone. To be able to inject energy into those spaces.
What does impact mean to you?
I think we say we’re impact investors because that is what the world has termed it. What I really think is that there are two kinds of investing: there is thoughtful investing and thoughtless investing. So thoughtful investing, thoughtful living, purposeful investing, purposeful living for me is about using your energy to try and create a better future for everyone. That’s my big picture theory of impact.
When it comes to investing in individual projects or organisations, impact will vary in area, depth, scale and other factors. I’m not personally wedded to any one definition of what is impact. If we’re intentionally creating opportunities for everyone to thrive then that is a great place to start and so different to today’s investment status quo that values financial gain above all else. Then we combine that with consistently learning and an ethos of progress not perfection and hopefully our impact gets deeper and more effective in time. I know I’m likely to make decisions today that maybe I wouldn’t make in five years but that’s ok. For me, at the base of it, impact is about intentionally creating an ecosystem for great ideas, companies, projects, people and planet to thrive. Whichever angle people choose within that, that’s great!
Walburg Pers
Verwacht: IMPACT van Rense Bos. Een interview met Bec Milgrom
How do you, together with your brothers, make a decision about what is impactful, thoughtful and purposeful?
Holistically we’re very open. Practically we’re quite process driven in how we go through to understand the impact of a company because there are great opportunities and there are opportunity costs. You have to weigh things up. So we have borrowed heavily from the impact management project framework and the Toniic network thinking. The first step for us on a deal is always looking at the impact.
From a practical point of view, we’ve developed an impact calculator and a series of questions. It's based on a series of yes and no questions and then ratings.
The first one is whether we feel it in our gut. Is this something that we think contributes to that picture of a thriving world? Acknowledging that this is totally subjective and flawed and everyone will have their own answer to this. Then we look at where it is practically. What is the impact area? What is the problem? How are they solving it? At that point we really lean on the impact management project and go through their factors. Who are the beneficiaries? How underserved are they? How much will this intervention change their lives?
With all this to think about we created, thanks to my brother Jake, a calculator that spits out a number that tells us whether this is a project that is of benefit to communities, contributibuting to solutions etc. and then we’re able to assess. So it is a subjective objective. It attempts to allow us to look back and see how we made that decision, what assumptions we made. We review that once a year.
I think most importantly in our process we are looking at potential impact return in the same way we would look at potential financial return. Then we use this all as a springboard. Who do we need to consult to find out more about this area or the beneficiaries? What do we need to know to see if our assumptions are true?
What does it mean to be a good ancestor for the next generations?
I try to think about both what we’re leaving for and what we’re borrowing from future generations. I think a good ancestor leaves the world better than when we got it. To me that means, most saliently in this moment, climate justice and social justice. I think it’s a constantly evolving dance between these quite broad but interconnected issues. There is a set of things that I want for future generations. I want them to have a great education, to know that they are safe, secure and healthy and have clean water and air. To have plenty of room to play. To have opportunities for purposeful work and rest and connection with community. So, we try and look at what we have to stop doing now. We have to stop using fossil fuels for example. And then what we have to foster. We have to foster regenerative solutions that are available to everyone. So we are looking at those two dimensions all the time.
In our last conversation you were talking about reconciliation and why it is an important topic. Can you say something about that as well?
Australia has a really dark past and unfortunately enduring story with our first nations people. We live and work on stolen land that was never ceded so we have a lot of healing work to do. Personally, I have a lot to learn and unlearn. Our first nations people got a lot of things right and I think we need a re-indigenizing of thinking on a lot of fronts. Particularly the connection to Country. Understanding that we are a part of nature not apart from nature. There are a lot of questions to be asking here. What does it mean to be someone who owns property on stolen land that was never ceded? What are we going to do about it? We also need to be really careful about where power sits and not be prescribing solutions for indigenous Australians or demanding their energy or a share of their wisdom. There is danger in falling into a colonial and paternalistic pattern when we declare our intention to empower first nations people but as a wealth holder and a landholder on stolen lands you have a real responsibility to give back power. The big question is how do you do that. It’s one that we’re exploring and I feel is really important.
Firstly, that they got a lot of things right and we need a re-indigenizing of our thinking on a lot of fronts.
How do you translate that into your impact investing work?
Right now for us that means backing indigenous led organisations focussed on self-determination. One of the things we’ve just done is we created an advisory board for our family office with diverse voices including diverse genders, professional and personal backgrounds, ethnicities and included in this is first nations representation. Importantly, we pay all our advisors in acknowledgment of the fact that the systems that created our wealth systematically held others back and that we value the time, energy and emotional labour that historically marginalised people and people with unique lived experience give to provide insight and advice. So that is one small part of how we think about changing who is at the decision making table. We are also building our networks with first nations individuals, campaigners and asking lots of questions and again, making sure we are paying them for their time. We’re still definitely learning and our best answer today is just try and invite people to connect and share with us, pay them for their time, let go of expectations and back their organisations.
Holistically we’re very open. Practically we’re quite process driven in how we go through to understand the impact of a company because there are great opportunities and there are opportunity costs. You have to weigh things up. So we have borrowed heavily from the impact management project framework and the Toniic network thinking. The first step for us on a deal is always looking at the impact.
From a practical point of view, we’ve developed an impact calculator and a series of questions. It's based on a series of yes and no questions and then ratings.
The first one is whether we feel it in our gut. Is this something that we think contributes to that picture of a thriving world? Acknowledging that this is totally subjective and flawed and everyone will have their own answer to this. Then we look at where it is practically. What is the impact area? What is the problem? How are they solving it? At that point we really lean on the impact management project and go through their factors. Who are the beneficiaries? How underserved are they? How much will this intervention change their lives?
With all this to think about we created, thanks to my brother Jake, a calculator that spits out a number that tells us whether this is a project that is of benefit to communities, contributibuting to solutions etc. and then we’re able to assess. So it is a subjective objective. It attempts to allow us to look back and see how we made that decision, what assumptions we made. We review that once a year.
I think most importantly in our process we are looking at potential impact return in the same way we would look at potential financial return. Then we use this all as a springboard. Who do we need to consult to find out more about this area or the beneficiaries? What do we need to know to see if our assumptions are true?
What does it mean to be a good ancestor for the next generations?
I try to think about both what we’re leaving for and what we’re borrowing from future generations. I think a good ancestor leaves the world better than when we got it. To me that means, most saliently in this moment, climate justice and social justice. I think it’s a constantly evolving dance between these quite broad but interconnected issues. There is a set of things that I want for future generations. I want them to have a great education, to know that they are safe, secure and healthy and have clean water and air. To have plenty of room to play. To have opportunities for purposeful work and rest and connection with community. So, we try and look at what we have to stop doing now. We have to stop using fossil fuels for example. And then what we have to foster. We have to foster regenerative solutions that are available to everyone. So we are looking at those two dimensions all the time.
In our last conversation you were talking about reconciliation and why it is an important topic. Can you say something about that as well?
Australia has a really dark past and unfortunately enduring story with our first nations people. We live and work on stolen land that was never ceded so we have a lot of healing work to do. Personally, I have a lot to learn and unlearn. Our first nations people got a lot of things right and I think we need a re-indigenizing of thinking on a lot of fronts. Particularly the connection to Country. Understanding that we are a part of nature not apart from nature. There are a lot of questions to be asking here. What does it mean to be someone who owns property on stolen land that was never ceded? What are we going to do about it? We also need to be really careful about where power sits and not be prescribing solutions for indigenous Australians or demanding their energy or a share of their wisdom. There is danger in falling into a colonial and paternalistic pattern when we declare our intention to empower first nations people but as a wealth holder and a landholder on stolen lands you have a real responsibility to give back power. The big question is how do you do that. It’s one that we’re exploring and I feel is really important.
Firstly, that they got a lot of things right and we need a re-indigenizing of our thinking on a lot of fronts.
How do you translate that into your impact investing work?
Right now for us that means backing indigenous led organisations focussed on self-determination. One of the things we’ve just done is we created an advisory board for our family office with diverse voices including diverse genders, professional and personal backgrounds, ethnicities and included in this is first nations representation. Importantly, we pay all our advisors in acknowledgment of the fact that the systems that created our wealth systematically held others back and that we value the time, energy and emotional labour that historically marginalised people and people with unique lived experience give to provide insight and advice. So that is one small part of how we think about changing who is at the decision making table. We are also building our networks with first nations individuals, campaigners and asking lots of questions and again, making sure we are paying them for their time. We’re still definitely learning and our best answer today is just try and invite people to connect and share with us, pay them for their time, let go of expectations and back their organisations.
Can you share one of your favorite failures? And what have you learned from it?
We’ve only been around for three years so we haven’t had any outstanding failures. I think we probably have failed to think through some deals, but we don’t know if that’s going to come back to haunt us yet. It’s worth noting that we stand on the shoulders of giants in the impact investing space and we came into it with lots of people to ask questions of and connect with. The Toniic network has been really important for that.
Is there some kind of advice you can give to people that are starting their impact investing journey right now?
I can certainly share some things that I think worked for us. We deliberately decided not to have financial advisors from day one. That is quite different from not getting advice from people. We ask lots of people for their advice. But we didn’t have any financial advisors or financial managers. What that meant was that to make any decision we had to do the hard work ourselves and ask lots of questions. I think that accelerated our learning. The Toniic network has absolutely been a really important space for us to learn from too.
I went to Katapult Future Fest about a year into this journey and that was one of the most joyful places to learn. What happened to me and what I imagine happens to a lot of people is this massive imposter syndrome. Either who am I to make these decisions? Or how the heck do I make these decisions anyway? Financial markets are purposefully opaque, the language used is purposefully complex. It’s not supposed to empower people to be financial literate. My advice is: don’t assume anyone else has it figured out. Don’t be afraid to ask questions. Don’t be afraid to ask for connections. I think we choose to deploy slower so that we could learn ourselves. That has worked for us.
How do you decide when something is going to be an investment and when it’s going to be a donation? What is the difference for you? And where do you base your decision on?
We’re always looking at all the tools in our capital toolbelt and seeing which ones can be used to solve which challenges. There are lots of challenges that businesses can go a long way to solving e.g. renewable energy and electrifying transport and some problems that are almost impossible to solve with a for-profit business e.g. bad policy and laws. When you’re investing in a for-profit business the money you put into that business should catalyse their growth, be recycled and hopefully returned to the investor and can be deployed again, so that any dollar invested can be recycled again and again and keep having an impact. When you’re making a donation, it’s a one-off, the highest opportunity cost of capital so you want it to create maximum impact.
System change work sits comfortably in the high impact and hard to solve with business boxes so that’s where most of our donations go; advocacy, legislation and education. Whilst most of our granting goes to systems change work some of it gets directed to specific causes and emergency relief in acknowledgement of the fact that though business might be able to solve certain challenges, they might not be able to do them today. Whilst homelessness can be solved with housing being built, and we invest in that, it’s not solving the problem today and someone has to fund the gap.
What percentage of your wealth or your family’s wealth is now invested in thoughtful investments and what percentage is invested in unthoughtful investments?
Tripple as an entity is a 100% impact with investments along the impact spectrum from avoid harm to systems change and we continually seek to push our investments into high impact opportunities. It’s all about progress not perfection. Any investments my siblings and I do outside of the Tripple structure definitely has an impact lens although they don’t always have the rigour of the models that we use for our family office. In the broader family, there is still a conventional mindset that is reflected in conventional portfolios. We are inspired by different ways to help move that thinking and that capital.
How do you go about talking to a relative with a more traditional mindset and you want to invite them to do more impact investing?
The answer is: we’re still learning. One of the things I try and talk about, and I don’t have a record of success yet, is the difference between leaving a legacy in dollars and leaving a legacy of the kind of world you want to leave. That is my best idea yet about how to communicate what it means to be leaving something for your family. Because I think if you ask anyone who is a conventional investor who is doing philanthropy: “Do you care about making the world a better place for everyone to live?” Everyone says yes. Do they have the time and energy to shift their portfolio? Maybe, maybe not. So, I think it’s about asking some questions and acknowledging you can’t force people to move. People are struck when you say: “You’re putting 5% of your money to use for good and 95% for a question mark”. Because you would never only put 5% effort into anything else you do. But I don’t know what works and I certainly don’t have a track record of success. Would love to hear from others what’s worked for them!
A lot of foundations still have a lot of assets in place in very traditional investments and they are using some percentage of the generated revenues to do good. What are the options that you are seeing to make more impact than only using your 5% for doing good?
The first step is always divestment. What is the low hanging fruit you can offload in your portfolio that doesn’t align with your values? Then where can you actively deploy that capital? The potential power of this thinking is huge. For example, Australia’s collective retirement fund is around 3 trillion dollars of which a big percentage goes to fossil fuels. If we divested that and invested in renewable energy, we’d need less than 8% of that total capital to get Australia a 100% renewable energy.
“Conventional investing is competitive. Impact investing is collaborative.”
Of course what that active deployment into impact investment looks like is all dependent on what your portfolio looks like, what your cash flow needs are, what risk you’re willing to take. But I will say even in the last three years the deal flow has massively increased in all areas. It’s not just solar and wind infrastructure anymore. There are really innovative and interesting products. There are some good green bonds, women's livelihood bonds, innovative blended finance models and more conventional products. From a really practical point of view that that’s when you join the networks either in your geographical area or your interest area. Everyone is sharing deal flow in those areas. Conventional investing is competitive. Impact investing is collaborative. That’s important. Ask people how they’re doing it and they’ll tell you what’s in their portfolio. People are proud of it and want more people to be doing it.
We’ve only been around for three years so we haven’t had any outstanding failures. I think we probably have failed to think through some deals, but we don’t know if that’s going to come back to haunt us yet. It’s worth noting that we stand on the shoulders of giants in the impact investing space and we came into it with lots of people to ask questions of and connect with. The Toniic network has been really important for that.
Is there some kind of advice you can give to people that are starting their impact investing journey right now?
I can certainly share some things that I think worked for us. We deliberately decided not to have financial advisors from day one. That is quite different from not getting advice from people. We ask lots of people for their advice. But we didn’t have any financial advisors or financial managers. What that meant was that to make any decision we had to do the hard work ourselves and ask lots of questions. I think that accelerated our learning. The Toniic network has absolutely been a really important space for us to learn from too.
I went to Katapult Future Fest about a year into this journey and that was one of the most joyful places to learn. What happened to me and what I imagine happens to a lot of people is this massive imposter syndrome. Either who am I to make these decisions? Or how the heck do I make these decisions anyway? Financial markets are purposefully opaque, the language used is purposefully complex. It’s not supposed to empower people to be financial literate. My advice is: don’t assume anyone else has it figured out. Don’t be afraid to ask questions. Don’t be afraid to ask for connections. I think we choose to deploy slower so that we could learn ourselves. That has worked for us.
How do you decide when something is going to be an investment and when it’s going to be a donation? What is the difference for you? And where do you base your decision on?
We’re always looking at all the tools in our capital toolbelt and seeing which ones can be used to solve which challenges. There are lots of challenges that businesses can go a long way to solving e.g. renewable energy and electrifying transport and some problems that are almost impossible to solve with a for-profit business e.g. bad policy and laws. When you’re investing in a for-profit business the money you put into that business should catalyse their growth, be recycled and hopefully returned to the investor and can be deployed again, so that any dollar invested can be recycled again and again and keep having an impact. When you’re making a donation, it’s a one-off, the highest opportunity cost of capital so you want it to create maximum impact.
System change work sits comfortably in the high impact and hard to solve with business boxes so that’s where most of our donations go; advocacy, legislation and education. Whilst most of our granting goes to systems change work some of it gets directed to specific causes and emergency relief in acknowledgement of the fact that though business might be able to solve certain challenges, they might not be able to do them today. Whilst homelessness can be solved with housing being built, and we invest in that, it’s not solving the problem today and someone has to fund the gap.
What percentage of your wealth or your family’s wealth is now invested in thoughtful investments and what percentage is invested in unthoughtful investments?
Tripple as an entity is a 100% impact with investments along the impact spectrum from avoid harm to systems change and we continually seek to push our investments into high impact opportunities. It’s all about progress not perfection. Any investments my siblings and I do outside of the Tripple structure definitely has an impact lens although they don’t always have the rigour of the models that we use for our family office. In the broader family, there is still a conventional mindset that is reflected in conventional portfolios. We are inspired by different ways to help move that thinking and that capital.
How do you go about talking to a relative with a more traditional mindset and you want to invite them to do more impact investing?
The answer is: we’re still learning. One of the things I try and talk about, and I don’t have a record of success yet, is the difference between leaving a legacy in dollars and leaving a legacy of the kind of world you want to leave. That is my best idea yet about how to communicate what it means to be leaving something for your family. Because I think if you ask anyone who is a conventional investor who is doing philanthropy: “Do you care about making the world a better place for everyone to live?” Everyone says yes. Do they have the time and energy to shift their portfolio? Maybe, maybe not. So, I think it’s about asking some questions and acknowledging you can’t force people to move. People are struck when you say: “You’re putting 5% of your money to use for good and 95% for a question mark”. Because you would never only put 5% effort into anything else you do. But I don’t know what works and I certainly don’t have a track record of success. Would love to hear from others what’s worked for them!
A lot of foundations still have a lot of assets in place in very traditional investments and they are using some percentage of the generated revenues to do good. What are the options that you are seeing to make more impact than only using your 5% for doing good?
The first step is always divestment. What is the low hanging fruit you can offload in your portfolio that doesn’t align with your values? Then where can you actively deploy that capital? The potential power of this thinking is huge. For example, Australia’s collective retirement fund is around 3 trillion dollars of which a big percentage goes to fossil fuels. If we divested that and invested in renewable energy, we’d need less than 8% of that total capital to get Australia a 100% renewable energy.
“Conventional investing is competitive. Impact investing is collaborative.”
Of course what that active deployment into impact investment looks like is all dependent on what your portfolio looks like, what your cash flow needs are, what risk you’re willing to take. But I will say even in the last three years the deal flow has massively increased in all areas. It’s not just solar and wind infrastructure anymore. There are really innovative and interesting products. There are some good green bonds, women's livelihood bonds, innovative blended finance models and more conventional products. From a really practical point of view that that’s when you join the networks either in your geographical area or your interest area. Everyone is sharing deal flow in those areas. Conventional investing is competitive. Impact investing is collaborative. That’s important. Ask people how they’re doing it and they’ll tell you what’s in their portfolio. People are proud of it and want more people to be doing it.
If you talk about divestment and the pension fund, what is stopping them to divest?
I think they are missing a push. No one who is succeeding in the status quo wants to do something different. I don’t think an institution is going to change unless they are told to change. This shift for retirement funds and for banks to switch to ethical investing really has to come from the people. The problem is, as a community we have been purposefully disenfranchised so retirement funds don’t need to be responsive to us. People don’t think of their retirement fund as their investment. People don’t often realise that banks don’t hold their money in a big safe. That means the banks and retirement funds can do whatever they want. But we are seeing this people’s powered movement and financial institutions are changing. There is no reason to think banks and retirement funds can’t make ethical choices and that these choices won’t deliver comparable or better financial return.
We’re invested in a superannuation retirement fund in Australia, it’s called Verve Super. It’s tailored for women by women and specifically focused on building the financial power of women. You see the way their members interact and how engaged and empowered they are. We can create financial wealth and future health and once people realise you can do both I think they switch. So now we need to continue to create people powered movements to poke our institutions, and we need to do it fast.
What are three really important things that need to happen in this sector to make even more impact?
Number one: way more diverse voices. Every decision-making table should have diverse representation. And we should be investing in people who have lived experiences of the issues that they're working on. Number two would be even more transparency. Number three is probably a less congratulatory environment, so we acknowledge the hard work people are doing and ask them to keep going. And I think that the impact investing world is pretty good at it, but just more community. More connections, more collaborations.
If you translate that into your own impact investing, how do you make that tangible?
As far as including more diverse voices, the biggest step for us lately is our advisory board. As I mentioned it was really important for us to have a mix of different people and views; BIPOC, gender, LQBTQIA+, background, ethnicity and we’ll keep growing the realm of people we consult with and invite to our table. It also looks like investing in different kinds of founders. We just did a gender smart survey on our portfolio. 58% of the founding teams we invested in had female representation, 79% of the boards that we associated with the companies had female representation and 87% of senior management teams had female representation. We still think that that should be 100% or close to and we’re aware that gender nonconforming and non-binary individuals are being way underrepresented in our portfolio.
We also invested in a VC fund called Ada that focus on overlooked founders and consumers and they have just started their Ada's Angels programme. They have this network of diverse scouts that bring in opportunities for them and as part of their latest innovation they’ve empowered these scout networks with cash to deploy and then the angels get a piece of the equity pie. We are really trying to invest in the kind of people that are trying to hand over power and increase those voices. Not just because it’s a feel good nice to have, but because it’s impossible all the best ideas come from one kind of person in Silicon Valley so we have to cast our net wider for great thinkers and doers to address our global challenges.
Also, we just ask the annoying questions all the time. Who holds the power in your senior leadership team? How do you centre voices of those with lived experience? How will you solve the diversity debt in your team? We can’t be shy to ask these questions.
On the other points, we are pushing ourselves to be more transparent and publish an annual report and all our holdings on our website. We’re exploring what else we can do here. We’re also a part of a growing number of international impact investing networks and alliances and devote time to these because we know how important they are.
Is there anything that you want to address or talk about that we haven’t addressed yet?
The only thing we didn’t touch on was the myth busting around “Do you have to give up financial gain for impact gain?” That is what I hear from a lot of people as the barrier to starting impact investing and I would say that that’s absolutely not true. A 100% impact portfolio could look like anything you want to, with any kind of risk/return profile. And the opportunities are increasing day by day. In fact, there’s increasing evidence that ethical ETFs and ESG funds outperform conventional and traditional funds.
I think they are missing a push. No one who is succeeding in the status quo wants to do something different. I don’t think an institution is going to change unless they are told to change. This shift for retirement funds and for banks to switch to ethical investing really has to come from the people. The problem is, as a community we have been purposefully disenfranchised so retirement funds don’t need to be responsive to us. People don’t think of their retirement fund as their investment. People don’t often realise that banks don’t hold their money in a big safe. That means the banks and retirement funds can do whatever they want. But we are seeing this people’s powered movement and financial institutions are changing. There is no reason to think banks and retirement funds can’t make ethical choices and that these choices won’t deliver comparable or better financial return.
We’re invested in a superannuation retirement fund in Australia, it’s called Verve Super. It’s tailored for women by women and specifically focused on building the financial power of women. You see the way their members interact and how engaged and empowered they are. We can create financial wealth and future health and once people realise you can do both I think they switch. So now we need to continue to create people powered movements to poke our institutions, and we need to do it fast.
What are three really important things that need to happen in this sector to make even more impact?
Number one: way more diverse voices. Every decision-making table should have diverse representation. And we should be investing in people who have lived experiences of the issues that they're working on. Number two would be even more transparency. Number three is probably a less congratulatory environment, so we acknowledge the hard work people are doing and ask them to keep going. And I think that the impact investing world is pretty good at it, but just more community. More connections, more collaborations.
If you translate that into your own impact investing, how do you make that tangible?
As far as including more diverse voices, the biggest step for us lately is our advisory board. As I mentioned it was really important for us to have a mix of different people and views; BIPOC, gender, LQBTQIA+, background, ethnicity and we’ll keep growing the realm of people we consult with and invite to our table. It also looks like investing in different kinds of founders. We just did a gender smart survey on our portfolio. 58% of the founding teams we invested in had female representation, 79% of the boards that we associated with the companies had female representation and 87% of senior management teams had female representation. We still think that that should be 100% or close to and we’re aware that gender nonconforming and non-binary individuals are being way underrepresented in our portfolio.
We also invested in a VC fund called Ada that focus on overlooked founders and consumers and they have just started their Ada's Angels programme. They have this network of diverse scouts that bring in opportunities for them and as part of their latest innovation they’ve empowered these scout networks with cash to deploy and then the angels get a piece of the equity pie. We are really trying to invest in the kind of people that are trying to hand over power and increase those voices. Not just because it’s a feel good nice to have, but because it’s impossible all the best ideas come from one kind of person in Silicon Valley so we have to cast our net wider for great thinkers and doers to address our global challenges.
Also, we just ask the annoying questions all the time. Who holds the power in your senior leadership team? How do you centre voices of those with lived experience? How will you solve the diversity debt in your team? We can’t be shy to ask these questions.
On the other points, we are pushing ourselves to be more transparent and publish an annual report and all our holdings on our website. We’re exploring what else we can do here. We’re also a part of a growing number of international impact investing networks and alliances and devote time to these because we know how important they are.
Is there anything that you want to address or talk about that we haven’t addressed yet?
The only thing we didn’t touch on was the myth busting around “Do you have to give up financial gain for impact gain?” That is what I hear from a lot of people as the barrier to starting impact investing and I would say that that’s absolutely not true. A 100% impact portfolio could look like anything you want to, with any kind of risk/return profile. And the opportunities are increasing day by day. In fact, there’s increasing evidence that ethical ETFs and ESG funds outperform conventional and traditional funds.
