In 2013, intern Scott Elias reflected on 4 different reframes discussed at Convergence XII and considered the power of each reframe to bring about social change. His reflection and the reframes where documented in Reframes as a Tool in a Social Movement, which you can download here. Below he focuses on “The Reframes of Impact Investing.”

REFRAME: The Reframes of Impact Investing

by Scott Elias

Is it possible to change capitalism in a positive way? Can we disengage from the accepted paradigm that market volatility is caused by highly correlated, corrupt, centralized markets run by greed and testosterone? Can we learn to take the long view and help our planet survive as a viable habitat before its too late? In investing, the reality is that all is possible and nothing is guaranteed. When we talk about impact and return, both can be positive and both negative. Impact investing as a field has created a rich universe for gender lens investing to draw upon, and sometimes it is also a confining frame. Gender lens investing is not, necessarily, a subset of impact investing, the idea that you can invest and make money and have a positive social impact. But what does impact investing really mean? How can reframing the way we view and practice investing be powerful? When should gender lens investing fall under the category of impact investing? When should it not?

Impact investing, at its core, is about an over-arching focus on the concept of integrated investing – starting with the belief that investing is by definition a multi-disciplinary activity, connected to everything in our societies and our planet. Starting with this connected viewpoint naturally embraces longer-term, more “true cost/true profit” analysis and decision-making. As a result, impact investing creates a space within finance to take greater risks, to expand the margin of error. As a result, gender lens investing is useful under the umbrella of impact investing in the sense that impact investing provides a gateway to gender lens investing. The precedent of greater risks and higher margins of errors to achieve a blended value associated with impact investing paves the way for unique ways of using money, such as gender lens investments. Given this unique opportunity to alter the prevailing paradigm of how we ordinarily measure outcomes and impact, today, more than ever before, investors and entrepreneurs are deploying capital geared towards blended value, towards investment strategies that generate a financial return while also having the potential for a positive social or environmental impact. And through gender lens investing, investors can generate financial returns while having a positive social impact that addresses gender-related issues.

Gender lens investing ideally seeks to capitalize on the intersection between gender and finance and investing. But despite the promise of impact investing, there is no silver bullet. Gender as a lens for investing does not offer a linear process of directions or some well-trodden path that necessarily leads towards desired impact. Therefore reframing gender lens investing as a subset of impact investing is limited in its potential by the inherent difficulty of developing a measurement system that offers an integrated understanding of blended value creation that matches the interest of the investor. Unfortunately, standard tools, practices, and approaches for measuring value do not easily apply to the sort of blended value impact investing as a field vocally endorses. As a result, the inherent limitations of valuation in regards to impact investing, complimented with its underlying focus on financial returns, often has the consequence of prioritizing the business model over impact, such that the demands and fears of investors can drive organizations away from the target population or off its stated impact mission. Thus, the drawbacks of impact investing, as it is related to gender lens investing, may obscure how gender actually spreads across all investments and investment decisions. Thus, the limitations of impact investing as a field renders reframing gender lens investing as a subset of impact investing not always so desirable.

In regards to gender-lens investing, this means that the true challenge lies in a broader conversation of how gender should be adequately valued such that it is central to profit maximization. And given the excitement with impact investing, it is necessary to ensure that gender is not narrowed to simply one impact among many possibilities that investors can choose from, like solar energy or reducing poverty. If we reframe gender lens investing as a subset of impact investing than gender becomes one out of various ways to create social impact, a narrow focus that hides the underlying intersection between gender and finance. Thus, how we frame gender lens investing and whether framing it as impact investing is useful or not requires changing the conversation and means of valuation so that the old notion that financial return and social impact are distinctly independent outcomes of an investment decision no longer prevails. It means shattering the false paradigm that gender—and social return—only matters if there is a financial return. It means viewing blended value through a paradigm that recognizes social and financial returns as integrated returns. It means embracing and understanding the inherent intersection between gender and finance and investing, that blended value exists not independently, but as an interdependent whole. The answer to whether framing gender lens investing as a form of impact investing is useful or not is both yes and no. Framing gender lens investing as a subset of impact investing is useful for certain target audiences, but likewise framing gender lens investing as not impact investing might be useful in other audiences.

The challenge for gender lens investing, like all forms of investing, lies in the conversation, in communication, in connecting to the target audience. Different things motivate different people and investing, whether with a gender lens or not, requires an understanding of that simple fact. Impact investing recognizes that investments can pursue financial returns alongside social and environmental challenges, and gender lens investing recognizes that investments ought to integrate gender to transform how we make money while making a difference. Thus, some might want to make gender lens investing a subset of impact investing while others might prefer to make the case that gender as a category of analysis is a necessary component of any smart financial decision regardless of social impact. How we frame gender lens investing and whether framing it as impact investing is useful or not requires thinking about investment practices throughout an entire ecosystem—not just vertically but horizontally. It is about broadening opportunities, not limiting them. It is about seeing the linkages and making visible the underlying connections in a world already connected. That is, the importance of reframing impact investing and whether gender lens investing is a subset of impact investing is about embracing our eco-system, an eco-system necessarily connected to everything in our societies and our planet.

How we frame gender lens investing and whether framing it as impact investing is beneficial or not requires a tacit acknowledgement that impact investing is a messy terrain. It’s not neat, it’s not perfect, but it has transformative potential. We can therefore understand the reframes of impact investing as an integrated paradigm change, which can be a tool in a larger movement that transforms how we move capital and make money while making a difference. And in that sense framing gender lens investing as a subset of impact investing is particularly useful. By normalizing impact investing, we can generate momentum, increase leverage, and shape our reality. The potential of impact investing, as it is related to gender lens investing, is that we can reframe and redefine both risks and returns, we can learn to take the long view, we can build momentum, and we can broaden our ability to capitalize on investments that facilitate social impacts and durable change. But the drawbacks of impact investing, as it is related to gender lens investing, is that gender may become reduced to simply one impact amongst many possibilities, obscuring the underlying intersection between gender and finance. In investing, the reality is that all is possible and nothing is guaranteed. In Impact Investing, that reality is an opportunity. And whether gender lens investing, as a subset of impact investing or as an entirely distinct paradigm, flourishes is contingent on whether we embrace that opportunity.

Read the white paper: Reframes as a Tool in a Social Movement

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