Hannah is Communications and Research Lead at the Australian International Development Network, Dual International Development PhD Researcher at the University of Melbourne and University of Manchester – as affiliated with the Global Development Institute, and communications Officer at Good Return.
What was your first job?
I set up a dog-walking business in my street when I was about 10. I charged $5 for an hour walk. I had one client.
When did you know you wanted to work in finance/business?
If I am honest it was never the plan. I have always wanted to work in international development. However, I’ve entered the sector at a point of significant change where it is clear that public sector financing or ODA is not going to achieve the urgent change we need to see in the world. For example, the last estimate puts the financing gap to achieve the Sustainable Development Goals (SDGs) by 2030 at $US 4.2 trillion. Consequently, there is now a requirement for a massive scale up and investment of private sector capital beyond traditional aid or development financing.
On the other side of the coin, the private sector is increasingly aware of upwards pressure from consumers, clients and the broader community to be engaged with ESG or achieve the SDGs. This dual pressure has created a situation whereby private capital actors, not traditionally associated with international development, are now exploring new SDG oriented objectives and joining forces with traditional development actors (such as charities or NFPs). In this context, bringing a finance and business lens to my work in international development is key.
When did you first discover the concept of Impact Investing?
I first discovered the concept of impact investing through casual conversations with friends about ethical super funds in Australia. However, I started to properly engage with the concept when working at Good Return.
Good Return’s Impact Investing program identifies and supports small to medium sized businesses in agricultural value chains that play a vital role in bringing jobs and income to people living in poverty, especially women. Coming from a background focusing on women and gender, having the opportunity to learn more about the emerging concept of Gender Lens Investing (GLI) has been fantastic.
What’s one exciting development you and your team have in the pipeline?
In collaboration with Brightlight, the team at AIDN have been researching and exploring the idea of a ‘Unified NGO MasterFund’. The MasterFund would be a unitised wholesale fund structure designed to shift capital from international development donors to SDG impact in Emerging Markets alongside the Australian INGO community.
Currently, INGOs lack the scale and operational capacity to take large investments directly to market. To respond to this, the professionally governed Masterfund would be a unified structure fund that can deliver market rate returns and is designed to reduce costs for INGOs. The fund would also facilitate a large scale and diversified portfolio of investees with local financial intermediaries, allowing INGOs to channel funds into SDG aligned investments. Ultimately, our goal is to release additional capital from Australia to emerging markets.
What was the most interesting impact deal (from any team across Asia/Pacific) in the past 12 months?
The impact investing sector in the Asia-Pacific is growing rapidly, with interesting impact deals every day. However, building on recent work that AIDN and our partners are doing around the concept of ‘democratising’ the Australian impact investment sector, I think it’s important to highlight that the most ‘interesting’ deals don’t necessarily need to be large-scale or completed at arms length by a global impact investing company. Instead, I think that the power that small-scale investors can also play in making a difference is really interesting.
Several organisations are already promoting this idea, for example Red Hat Impact promotes the power of crowd equity and allows syndicates of investors ranging from $500 to $75k to come together and support impact enterprises. Organisations like Kiva are also allowing sums as small as $25 to be aggregated in a way that can create meaningful sums of money to microfinance institutions globally.
More broadly, impact investing can also be something that individuals might already be doing everyday via their purchasing power. For example, when an individual chooses to spend their money at a bakery that is also a social enterprise, they are putting upwards pressure on the market and making it clear that they want their money to also have a positive social impact. In an age where many people, in particular young people, feel anxious about our role in influencing major development policy (such as climate change) , highlighting individual agency in impact investing is really important.
Name one high impact company (globally) that investors should keep their eye on?
Instead of naming one high impact company I recommend that investors keep their eye on the role of Gender Lens Impact Investing. As a good place to start, I recommend any of the organisations that were featured in the ‘Investing in Gender Equality’ podcast by the Frontier Brokers Network. The podcast featured pioneering gender-focused social entrepreneurs from the Asia-Pacific at varying scales. For example, Sehat Kehani is a social enterprise in Pakistan that connects women doctors to patients in low-income communities using a telemedicine smartphone application.
What’s your vision for impact investing in 5 years time?
As above, my vision is one where there is a greater role for individuals to make impact investments. The effect of lowering the entry price to impact investing is such that we both move the investing ecosystem away from an ‘elite’ space and simultaneously create the opportunity for a more diverse set of investors who may more appropriately represent the social and environmental causes impact investing seeks to address in the first place.
On the other end of the scale, we are witnessing the rise of state-led development institutions or banks in international development. The creation of an Australian development finance bank could be an important move forward for Australia to innovatively finance development outcomes through mechanisms such as impact investing, and by attracting and de-risking private capital.