Three reasons impact investing needs women

While women are already playing a big part in the rapidly growing global impact investing market, sector experts say encouraging more women into the traditionally male-dominated field can only lead to good things. We find out why.       

Sarah Davies, the CEO of Philanthropy Australia, discussed the growing influence of women in making financial decisions during a keynote address for a women in sustainable finance panel on Tuesday.

The panel featured Sally McCutchan, CEO of Impact Investing Australia, Catherine Brown, CEO of the Lord Mayor’s Charitable Foundation, and Erin Castellas, chief impact officer of Impact Investment Group, who discussed changes taking place in impact investing, and the role women are playing in managing the investing transformation. 

Davies said that as women started to earn more and had more control over their finances, they were increasingly calling the shots on how and where money was being invested. 

But what are female investors doing differently? 

Women use impact investing to support their charitable giving, not replace it. 

Citing a 2018 report by the Lilly Family School of Philanthropy, Davies said women were more likely to use impact investing as a way to complement their charitable giving while men were more likely to use impact investing as a way to replace their charitable giving.   

She said if one of the unintended consequences of the growth in impact investing was a diminution in philanthropy and charitable giving, it would be a disaster.

“What we don’t want is for people to say I’m going to take that same money I would normally give to charity and instead I’m going to invest it in impact investing,” Davies told Pro Bono News. 

She said many of the issues in society that charities and community organisations were working to address couldn’t be done in a way that generated financial return. 

“So many charities deal with communities and people that are ignored or left behind by the normal everyday market mechanisms, and so there will not be monetizable assets that can be turned into an impact investment,” she said. 

“It’s why having women investors is the influence that we need to see in the industry…because they’re not robbing Peter to pay Paul, and it’s really growing the amount of working capital that can get put to work for sustainable social and environmental change.”  

Women want to learn 

Research has found that while men and women are equally likely to be aware of impact investing, women are more likely to want to learn about impact investing. 

Davies said that this was something large investment organisations needed to take advantage of and they needed to think outside the square when it came to engaging them. 

“If you accept the assumption that the finance sector is dominated by men then the markets they move in are not going to be the same places where women are,” she said.

“So where are the women? How do you get to them and how do you pull them in? 

And how do you design the learning and information exchange and networking in a way that makes it easy for women to engage with?” 

Women invest in women  

While research has shown that investing in programs that empower women and girls benefits the whole of society, it’s still something that women are predominantly driving. 

“Women investors driving this trend is definitely something that we are seeing, but investing in women and girls is not a women’s issue, it’s an everybody issue,” Davies said.“So having leaders, regardless of what gender they may be, is critical across the leadership spectrum to invest in women and girls.”