A Discussion on Impact Investing at the High Water Women Symposium

“We need to take responsibility and ownership of the problems in the world. Whether we had anything to do with their creation, there is no excuse not to take part in solving them.”

This was a key sentiment at the 5th Annual High Water Women’s investing for Impact Symposium in New York City last month. Board Chair Anna Snyder (also Managing Director and Head of Due Diligence for the Chief Investment Office within Global Wealth & Investment Management, a division of Bank of America Corporation) echoed this theme, kicking off the event by discussing the danger of complacency—a powerful call to action for women to take part in transforming how we live on the planet and with one another.

Founded in 2005 and incorporated as a 501 (c)(3) by a small group of senior women from the hedge fund and investment communities, High Water Women has grown to engage women throughout the financial services sector in volunteerism and philanthropic giving. Its annual symposium brought together impact investing leaders for a discussion on the industry’s present, future and the challenges that lie in between.

Here are some of my key takeaways from this meaningful event:

A discussion on key obstacles

Impact investing is hamperedplagued by unique obstacles that must be overcome if the industry is to grow out of its nascent stages. Now celebrating its 10th birthday, the industry is poised to tackle these challenges:

  • Lack of transparency of information: During the panel and breakout sessions, many discussions centered around the industry’s lack of transparency of information. This fact is further compounded by a lack of accessibility, which stems in part from the industry’s convoluted language, acronyms and confusion about terms and definitions.
  • Lack of knowledge: There’s a common misconception that impact investing is marked by high risk and low rewards. This simply isn’t true. Yet this myth propagates a risk aversion that drives people away from impact before they ever begin to examine the possibilities of financial rewards and global change.

  • Lack of diversity: Impact investing, like many industries, is largely homogenous, lacking diversity among genders and people of color. It often comes off as elitist, unintentionally  barring people from the industry. Growth requires more people to enter the space—and a complete change of mindset.

  • Lack of standards and regulations: Simply put, impact washing is deeply problematic. The industry is getting bigger, and with that growth comes more people who say they are engaged in impact investing without having a clear understanding of what that actually entails. I saw both the “sustainability” and “green business” movements fall victim to a similar dilution. In order to escape this fate, the industry needs to adopt standardized definitions and measurements for impact—a theme also discussed at SOCAP17 earlier this fall.

The role of accessibility, transparency and education

How do we overcome these obstacles? Through transparency and accessibility.

Another key theme throughout the High Water Women symposium was the notion that there is a lot for people to learn. I couldn’t agree more. The lack of education continues to propagate myths and aversions. Meanwhile, a lack of standards prevents people from getting to the heart of what impact investing and sustainability are really all about.

There’s a clear need for greater education and tools on all sides of the table. The lack of investor and financial services preparedness makes it nearly impossible for most people to ever begin their impact journey. Individual investors want to get involved, but simply don’t know how—a point that’s true for most of the investment community as well. As the industry continues to evolve, the emphasis on education will grow alongside it. You can already see this shift taking place and gaining initial momentum.

We’re living in a day and age where we know so much about the challenges around the globe. When we choose not to take action, we’re complicit to the crime. The promise of impact investing, and the role of accessibility in realizing that promise, has motivated me to develop educational materials that empower individual investors to take part in this movement. Stay tuned for more updates on this, and more insights on impact investing, in the coming months.