We help investors adopt thematic approaches to impact; that is, investment strategies that benefit a specific community, operate within a specific sector, or achieve a bundle of related impact outcomes.
The thematic approach is common among impact investment and mission aligned investment, often seeking to drive Diversity, Equity, and Inclusion outcomes or environmental impact. But the nuances of these issues are often outside the range of investors’ expertise. As such, where investors go to inform their impact strategy, deal flow, and impact measurement matters.
Take investor strategies around addressing racial inequity and injustice. Historically, many conversations have centered around a small slice of issues: particularly advancing BIPOC representation in corporate and investment management, divesting from the most egregious racially charged industries like private prisons, and growing buckets of capital designed for entrepreneurs of color and intermediaries (like cash placements in CDFIs) supporting Black and brown communities. These investor actions are impactful, but stopping there misses plenty of other ways in which their capital has implications for racial justice. To understand the implications, one must get to the root of capital’s role in fostering job and wealth inequality, capital flight from communities of color, predatory practices in the lending, food, and retail sectors, and more. We embarked on a research project to highlight many of these intersections, using conversations with researchers, organizers, and movements for racial justice to guide our approach and to translate the intersection of capital and racial justice to investors.
This approach is indicative of the kind of difficult work it takes to develop nuanced understanding of societal issues to investors. Broadly, investors’ impact strategies should be informed by movements working on that impact through non-financial channels, like organizing and policy work. While Transform Finance is not a movement organization itself, we seek to translate the perspectives of social change actors for investors through our research approach based on trusted resources, partnerships, and conversations with movement partners who are closer to the issues than us and most investors.
To date, we’ve applied this approach to several issue areas through our research and advisory work: the future of work, quality jobs standards, equity in the media sector, technology-based solutions to worker power, and pro-democracy efforts in global media, to name a few.