Jean Case On Impact Investing, ESG And Women Can Be The ‘Secret Sauce’

“Every investment has impact. The question is, what impact does it have?” That’s the question Jean Case, CEO of the Case Foundation and Chair of the board of the National Geographic Society, raised as we talked about her and her organization’s focus on impact investing.

“It took a really long time before people began to realize, ‘hey, I can actually use my capital in a way through investing to do something extra and special for society,’ ” she said. “Impact investing and the impact investing we focus on, and try to bring tools and resources together for, really represents areas of investing where you're looking for both a financial return and a social return through the investments that you make. So, it's really that simple. It's asking the question of, ‘is there some kind of social return that's exceptional or different in this investment versus the normal investments I would make?’”

She added that, “I like to remind everyone that every investment has impact. The question is what impact does it have?”

In this in-depth, exclusive interview on Electric Ladies Podcast, Case also juxtaposed impact investing to ESG investing – for environment, social, governance-focused investing – by saying that ESG began as a focus on risk. “(ESG) really started as a framework that could take risk out of investing. Because, if you're environmentally aware, then chances are, you're not going to do something that's going to come back to bite you on that front,” she explained. “It just means when you're running your business, are you looking at important material things around risk that matter. So, environment, of course, is one of them. Then, you know, the complexion of your workforce as well as your supply chain, the things around you that drive the business and the governance of your company. And if you're not paying attention to those things, then you're not managing risk well, that was really what ESG was born out of.”

She cautioned though that she doesn’t think the “governance” piece, or the “G” in ESG, gets enough focus. “I've been really clear though, Joan, I don't know that ES and G go together. And I think there is still a little bit of a measurement and transparency problem around it …So I'm all about the idea of what sits behind ESG, but I still think the market needs to kind of clarify itself a little bit, and some tools for investors need to be a little more transparent than they are….The reason I feel strongly about that is, if we don't, it only takes a few bad actors to give the entire sort of movement, if you will, a bad name.”

The forthcoming climate risk disclosure rules that the Securities and Exchange Commission (SEC) is finalizing will provide some clarification. About those rules, Case added that, “I'm hoping that we don't overburden companies, you know, through regulation. But at some point, we must have a clear standard measurement and transparency around it, if we're going to go in the name of ESG. And, you know, so for that reason, I'm in favor generally of trying to bring some clarity.”

Here are three key “principles” she shared in our conversation – and said are in her book, “Be Fearless: Five Principles for a Life of Breakthroughs and Purpose”:

· Think about the power of your capital to change the world – and be confident: “Many women, what they don't think about is the power of their capital, or the power of their investments, to change the world. And we see this played out in data all the time. Women have much less confidence as investors than their male counterparts…(But) you have to know the difference between seeming confident and being informed. The way to get confident is to inform yourself. Go to school on it, start reading some things to help you understand it.… Let's throw out ESG or sustainability or impact, and just say, ‘well what are your values and how can you invest capital in alignment with what you believe?’” She added that, “Women are a little less risk tolerant, (yet) they actually outperform men when they do invest, by 40 basis points….(Women) are just demonstrating time and time again that they can come into this world and not just perform but outperform. And now, we just need them to own that confidence.”

· Failure can be a great teacher – from her book “Be Fearless”: Speaking about entrepreneurship, since they have invested in, advised and mentored dozens over the years, “It’s a tough road if you’re an entrepreneur. Most people do not realize that most ventures fail, actually the majority fail,” she said. But one of her insights from that experience is, “That’s really why I wrote “Be Fearless,” the whole idea of failure can teach.” She wants to inspire readers to “be the one who learns from that, applies it, and moves forward. And that’s not just true obviously in business. But that’s true more broadly in things we undertake in life.”

· Be the secret sauce – and own it: Her book, “Be Fearless: Five Principles for a Life of Breakthroughs and Purpose,” Case said is, “based on a number of principles that are present wherever transformational change takes place.” In organizations or on boards of directors, women being in the minority is a kind of power too, she underscored:. “So, the truth is, in some ways for women, if they're just the only one or a minority on a board, what I wrote about in the book is, they can be the secret sauce.

“Because they are going to bring perspectives that no one else at that table has had or is thinking about because they see the world differently and they should own it and share it.”

Listen to the full interview with Jean Case on Electric Ladies Podcast here.