Photo Credit: Stavrialena Gontzo
LGBTQI lens investing may be a new concept to many, but there is a growing movement of impact investors applying this unique lens to their investment strategies. Kelly Roberts-Robbins and François Ritchot of Palladium Impact Capital (formerly Enclude) recently discussed this trend, and the need to differentiate from the currently better-known gender lens investing.
Capital is required to address the inequality and oppression faced by the LGBTQI community, and an ecosystem of impact investors applying an LGBTQI lens is the only way for real change to occur. From direct investments into LGBTQI-owned businesses, to investing in businesses that have LGBTQI people in leadership or as employees, or those that serve LGBTQI customers, there is no one ‘right’ way to approach the strategy.
In a continuation of the first part of their conversation on what LGBTQI lens investing is, Kelly and Francois discuss how impact investors can build an ecosystem that supports the LGBTQI community.
François Ritchot (FR): In Part 1 of our series on LGBTQI lens investing, you talked about the Criterion Institute’s recent guide on Investing with an LGBTQI Lens: Rethinking Gender Analysis Across Investing Fields, and about two investors, Trillium Asset Management and Dreilinden, who are making LGBTQI lens investments and sharing what they learn. To build momentum, there needs to be a whole ecosystem of investors using this lens. So, what do you see as the next changes that need to happen in order for growth to take place?
Kelly Roberts- Robbins (KR): Investors need to make decisions about what makes sense for them and their own impact and financial goals, and that’s how the ecosystem can move and grow. How do we get to a point where we have investors that are acting within their own strategies to address LGBTQI issues and rights?
Some investors may take the approach of making direct investments into LGBTQI-owned businesses, for example a business owned by a lesbian woman. But there are other ways for investment money to include and promote LGBTQI people. For example, investing into businesses that have LGBTQI people in leadership or in the employee base, or those that encourage their workplace to be inclusive of LGBTQI employees through policies and safe practices.
This approach is especially helpful in markets where it’s dangerous for employees to announce their sexuality or gender at work. Investing in improving workplaces for LGBTQI community members will combat the 76% of LGBTQI employees that do not feel safe to be out at work. There’s also an opportunity to invest in businesses whose primary customers are LGBTQI community members.
There will be some investors who think about incorporating an LGBTQI lens into their investment thesis itself, and these will be important leaders. But not every investor will have this as their primary impact goal, and of course that’s fine. There are other ways of doing business that include thinking very carefully about bias in pipeline development, including positive screening that encourages certain groups to be included in the pipeline, or adding investment terms that promote the protection of LGBTQI people (like drag-along rights tied to gross mistreatment of employees).
That kind of approach can help LGBTQI people across the portfolio, whether or not LGBTQI rights are the focus of the investments overall.
FR: Two things that stood out in your answer is the strategy of finding investees, as well as the fact that doing this can be dangerous in a lot of markets for LGBTQI community members. So how can investors bridge the two?
KR: Safety is an important consideration, and one that has a larger role here than in many other kinds of impact investing. It is a particularly thorny issue because belonging to LGBTQI communities is sometimes a kind of invisible identity. People may not wish to identify themselves with the community because they don't define themselves that way.
In many places where we all work, people may not wish to identify openly as part of the community because it is dangerous to their business success, their lives, and their physical safety. Being very conscientious and purposeful is key to doing LGBTQI lens investing in a safe and helpful way for those community members that they want to serve. That means thinking about safety considerations in the way that we publicise investments and what we say when we publicly celebrate investees’ success. Their consent about how they are portrayed is crucial.
It’s also worth noting that investors don’t need to reinvent the wheel. Activists and chambers of commerce working in LGBTQI communities for decades have a lot of experience with how to do this work in a safe way, and investors need not make it up as they go. Investors can partner with community organisations to connect them with businesses looking for capital and can help navigate safety considerations to protect the very people that we all want to support and uplift.
François, you have been doing your own research into LGBTQI lens investing solutions. What do you think investors need to take into consideration to support people the right way?
FR: We’ve always taken a demand driven approach – we want to focus on how capital can solve the problems that people are experiencing. A critical component to expanding this field and building the practice is to involve everyone in the community to understand their needs, experiences, and pain points.
This means being inclusive of people of colour and of different origins within the LGBTQI community, and addressing intersectionality within our approaches, so we avoid perpetuating systems of exclusion.
KR: I agree. So, designing with members of the community rather than designing for them is something to which we can all be dedicated. I’d like to close by saying we are on a learning journey with our partners, activists, and investors who do this work. And as you said, François, we do want representation of all types of people to think together about this conversation.
If you are an interested investor or ecosystem partner, please contact firstname.lastname@example.org.
Palladium Impact Capital (formerly Enclude) and Caren Holzman of Enabling Outcomes contributed to the research and creation of the Criterion Institute’s recent guide on Investing with an LGBTQI Lens: Rethinking Gender Analysis Across Investing Fields. According to the Criterion Institute, the guide “is an invitation to a range of individuals and institutions—including asset holders, asset managers, philanthropic funders, and gender lens investors—to think about how finance, as a system of power, can be engaged to address the marginalization and oppression of LGBTQI people.”