The Future of Impact
A Shift Conversation With Amit Bouri, Cheryl Dorsey, Jed Emerson, Fran Seegull, and Laurie Lane-Zucker

To reflect on the present state of the social impact movement and global efforts to achieve the UN’s Sustainable Development Goals by 2030 and to chart the future of impact, Laurie Lane-Zucker of Impact Entrepreneur led a Shift Conversation with four of the most significant actors in the impact space: 

The following is a transcript of the questions that Lane-Zucker asked the panelists and their responses. 

Laurie Lane-Zucker: I would like to know what the word impact means to each of you. And what does transformation mean to you, both through the lens of your work and with an eye on 2030? 

Jed Emerson: I'd like to begin by acknowledging that I'm coming to you from the West entrance of Rocky Mountain National Park and an area of Colorado that's the traditional territory and land of the Northern Ute people. It's a pleasure to be in this conversation. 

When I reflect on impact, I have to reflect on it in evolution, if you will. In the early days we thought of impact as something that we do to other people. A number of jobs created a decrease in pollution and decrease in impacts on ecosystems, these types of things. And I think more recently we've seen shifts in terms of how people are exploring and understanding definitions of impact. Where I think I've come to is a five fold understanding of what impact is at this point. 

  • The first is ignorant impact. I think we all have impact in and out of the world that we are largely unaware of–that we don't really manage with intentionality–and that can create either positive or negative value over time.
  • I think in terms of cheap impact, relative to when I listen to business people talk about how we create jobs, we pay taxes, that's positive for the world. I think that's the lowest bar of impact in that sense. 
  • I think of broad impact in the context of education initiatives, vaccine initiatives, healthcare. Things that can really affect many individuals and touch many lives, but may not go necessarily to depth.
  • I think of deep impact as being a function of place. Positioning ourselves in family, in community, and in ecosystem and really drilling down. 
  • And then lastly, I think of impact as a function of mutuality. I think of it as a process of co-creation and of a mutual evolution and creating something more positive on the other side, which goes to your last comment around transformation. 

When I think of transformation, I think of it as, almost, moving toward the higher order of mutual impact, where we are aware of and pursuing efforts to evolve together towards something that neither of us individually may understand today. And so I think that's really the positive possibilities of impact.

Cheryl Dorsey: Jed, I so appreciate you beginning our time together with a land acknowledgement. I would also like to recognize and acknowledge the indigenous people of the land where I now sit, the Nacotchtank, which is a name derived from the word anaquashatanik which means a town of traders. So I obviously know that it's not enough, but I think it is really an important social justice and decolonial practice that really promotes indigenous visibility. So appreciate you kicking us off in that way, Jed. 

It is hard to follow the man who literally wrote the book on this stuff. So I'm going to mostly plus one what Jed just said. But from my perspective, impact is, in some ways, a neutral term for me. It is both the positive and negative externalities of a system. And the point that I will reinforce is how those impacts or how those externalities land on an individual I often talk about the weight of systems on an individual and the difficulty that, that ultimately presents and allowing them to navigate those systems but also the lasting residue, the systems residue that makes it difficult to achieve equitable outcomes within that system. 

You mentioned transformation, Laurie. I think of transformation as both a critique and an aspiration, right? Sort of a critique that we're all subsumed in these systems that work for far too few of us. But I think it's also an aspiration, right? So how can we–with agency, with efficacy, change those systems in a way that works for more of us?

The name of my organization, Echoing Green, is actually taken from the name of a William Blake poem. One of my favorite lines from one of my favorite William Blake poems is 

“I must create a system or be enslaved by another man’s; 
I will not reason and compare: my business is to create.”

And I think that's such a wonderful articulation of the power of transformational thinking and doing. It is a longing. It is a calling. It is a series of actions. It's the stuff of movement. 

Fran Seegull: So thanks Jed and Cheryl. I agree with everything that you folks laid out. At the Alliance and at the Tipping Point Fund on Impact Investing, we focus on the field and practice of impact investing across asset classes, across geographies and across strategies and work with a lot of different stakeholders.

So just to, to share all this point about the residue, which we'll talk about a little bit later and specifically around the residue of historical disinvestment in Black and Brown communities and what we can do about that. At the Alliance, when we speak about impact, we're referring to measurable, positive, and negative social economic, and environmental outcomes across a broad range of stakeholders, including the environment, including communities.

I think it was Clara Miller, who is on our board and is the former President of the Heron Foundation, who said all investing is impact investing. What she meant is that all investing has an impact but for the most part, it's opaque to the investor. It's opaque to retail investors, institutional investors, but not just investors. It's opaque to consumers, to employees, to communities. 

That bridges to the second part of your question, Laurie, around transformation, which is really at the core of our mission. And we see that as a North Star for the broader field. We believe at the Alliance that the transformation of finance, and indeed the transformation of our world, rests on impact transparency and accountability impact transparency and accountability is not sufficient, but it's a necessary first step of starting to think about impact transparency. Not just as an investor right, but as a human right. And I think that is a thread that I'd like to continue to talk about today. So those are my initial thoughts. 

Amit Bouri: Thank you so much. And I do really appreciate the opportunity to speak with all of these great folks about such an important topic. I'm dialing in from New York, from Manhattan, the traditional land of the Lenape people. 

And it's such an important time to be having this conversation because I do think this is a time where transformation is in the air. I don't want to be overly optimistic at a time that is so challenging for so many, but I do believe that we have an opportunity for systems change, which I know is a big part of the conversation that we're having today. Fundamentally I would think about, at a very basic level, when people think about impact and talk about it, it's about improving life. Improving the quality of life for all people and also improving life of other species on the planet. I think that is what motivates many people to become impact investors. But fundamentally we're at a time now where we're also thinking about to what end. And there's a thing when you're talking about transformation. I think we are, to build on some things that Cheryl said, at a time where we say that our systems are not serving us–they're not serving people, they're not serving the planet. And this is a time for us to fundamentally explore what are the systems that we will need to take us through the next century and, and centuries, as we think about how to build a more sustainable way of living in harmony with the planet.

And I think that is the time where we're now at a moment where people are questioning very fundamental elements of our systems: our economic system, our social fabric, the relationship between humans and other species and it's an incredibly dynamic time. And I'm very hopeful that we can build towards a much more sustainable system that works for all.

Laurie Lane-Zucker: How have recent crises such as COVID, the Black Lives Matter movement, and the political insurrection changed or reinforced your thinking about the role and goals of the impact space and the timeline for necessary change?

Cheryl Dorsey: So it has been quite a moment, right? It has been devastating on a whole host of levels. We've all heard, and I think this is right, we're living in this vortex of two clashing pandemics–a global health pandemic that really unearthed the disproportionate impacts on communities of color who have just been decimated by COVID-19. African-Americans are dying at two to three times the rate. The rates are not much better for LatinX and indigenous folks. And then the pandemic of structural racism and white supremacy. And I think–certainly as it relates to the murder of Mr. Floyd, today is the anniversary of Ahmad Arbery's killing–structural racism was made visible to a lot of folks for the very first time. 

There was a lot of capital pledged and unlocked in this moment–about $35 billion or so pledged by philanthropic and corporate sources at last count. And I don't think we quite know how that capital is going to settle or quite how it's going to flow. But I certainly think there's the recognition that things have got to change and the structural inequities that led us to this moment have got to be revisited and interrogated.

However, I've been around long enough and have been a student of history to remember. And I've read it about sort of the Holy week uprisings during the sixties, after Dr. King was killed. What you often see as sort of a snapback, if not a backlash to moments like these. And the great hope is that in this moment, as we're trying to get to the year 2040, where at least in this country, we will be a multicultural society. And we'll no longer be majority white–that we have this moment. We have this crack in the universe to fundamentally rethink how we show up for one another. And to fully interrogate the meaning of full citizenship. I think that in many ways this is a question and a problem of democracy, Laurie. Right. I think in many ways, all of this shows up, this is a form of hyper populism. It's just sort of American style, hyper populism. So in many ways, this is a matter of–how do we figure out our democratic hygiene like other countries around the world. And if we can figure that out this current crisis will allow us to fundamentally rethink how we set up systems that work for more of us.

Amit Bouri: Yeah, I think this is obviously an incredibly challenging time that's added new challenges, but also put a spotlight on things that have existed for centuries, you know, certainly the roots of inequities in the United States go back long before 2020. And also, the inequities we see between wealthier nations and poor ones are ones that are being exacerbated by the crisis that we're in but certainly are not new. 

I think we have that in combination with the ongoing climate crisis. To me, where I see some hope coming from all of these challenging times and all the devastation that's hitting so many communities so hard is that it does bring a clarity, I hope, about the severity of the issues that we're facing. And what I have seen is a lot more interest in impact investing. We've also seen a lot more folks who are more focused on transactions, on finding great deals. Now we’re thinking much more intentionally about how that contributes to systems change and to transformation as you put it.

And, I hope that this is a time where we can really propel ourselves forward and not, as Cheryl put it, snapback. One thing that's really stuck with me, that I've referred to in some remarks before, is a quote from the Indian author and activist Arundhati Roy who said about the pandemic that is a portal–a gateway between one world and the next. She said ‘it offers us a chance to rethink the doomsday machine we have built for ourselves. Nothing could be worse than a return to normality.’ (source

And I think a lot about this, when I think about this desire to go back to normal, that what I hope is that we're actually building towards learning about everything, learning all the lessons that we can, from what we've just been through to build towards something much better than what we left before.

Fran Seegull: Thanks to Cheryl and Amit for laying out the extraordinary crisis set that we find ourselves amidst or are aware of at this time. This crisis has led to a lot of self-reflection in our field and more broadly about what we need to accomplish to create both a just and equitable recovery and a more just and equitable world. At the US Impact Investing Alliance the crisis really crystallized a dual theory of change which encompasses confronting inequality at the community level and the transitioning of our broader economic systems to stakeholder capitalism at the systemic level. 

So on the one hand, the pandemic revealed and worsened severe systemic gaps in major systems, like the ones that Cheryl talked about, including healthcare, education, housing, small business ecosystems. From this perspective, we are seeking an investigation and a transformation of community investing practices to counteract decades of deliberate underinvestment and disinvestment in Black, Brown, tribal, rural, and other marginalized communities. At the same time, as we seek to build back up main streets across the country and across the world, we recognize that the current short term extractive practices of capitalism and American capitalism in particular have hollowed out those main streets and communities. 

Some of you may know that the net worth of Black households in the United States is 10 times less than that, of the average white household, which is a disparity that can be traced back to a broad range of racist, financial practices and public policies, which we can touch on later. So as we seek to address those disparities, we also have to think about the economic system that has given rise to those disparities in the first place.

And that's where accelerating the transition to stakeholder capitalism comes in, which most folks who are tuning in probably know. But for those who don't, it is a transition from shareholder capitalism to stakeholder capitalism, which is an economic system designed to consider the interests of all stakeholders, including shareholders, but not limited to them. So including workers, suppliers, communities, and the physical environment. And we really believe that both are necessary–the rebuilding of communities and community fabric as well as the revision in the capitalist system, or even a full re-imagining of the capitalist system, to achieve the wholesale transformation that we've been speaking about today.  

Jed Emerson: I think for me, what these crises have done is they have underscored our fundamental interconnectedness. If the initial assessments are correct, the virus came out of a broken relationship between humanity and nature. It then, as it spread through the world, revealed, not even revealed, but brought up and highlighted the disparities and the inequities that we operate within. And it really, for me, I think called out what, in Buddhist terms you talk about as the illusion of separation. 

As I thought about this over the months, I really think that it's a reflection of the fact that a lot of our approach to understanding modern financial capitalism is based in what's fundamentally a Western, male cultural frame that believes that we can separate ourselves from each other. It is a dualistic understanding of self in relation to others. And it has this idea that my profits can come at your expense and that's okay. As opposed to really understanding that to really become a more whole and full to really have wealth, if you will. It has to be an understanding of that wealth that's interconnected. And in the late 1800s Friedrich Hegel was writing observations about America and American identity and commented that the United States would never really come into its own until we ran out of territory and had to turn to face each other.

And what I think that the virus and the crises that have been unleashed in this past year, has really done has been to force us to confront each other. I remember when Donald Trump was first elected, I was on a panel with Konda Mason and I made the naive comment that I couldn't believe that Trump was actually president and how did this even happen? And she turned to me and very lovingly said the only people who were surprised by that election were white liberals. And if you're a person of color, if you're a poor person you've understood from the beginning that there are these inequities that are fundamentally holding us back and inhibiting us from achieving what we have the potential to achieve.

And so I think that when I think about the timeline of change that you referenced in the question, you know, we're really talking about needing to pause and step back and, quite frankly, shut up and listen to each other in a fundamentally different way. And that really has the possibility of unleashing the power of the portal that Amit spoke about earlier.

Laurie Lane-Zucker: Amit, I understand that The GIIN has been working on a framework of incremental to transformational change. Can you share your thoughts on the role that different types of change are playing and can play in moving us toward a more sustainable and equitable future? 

Amit Bouri: Absolutely. And I think this is such an important thing for us all to focus on because I think this is where we really need to invest our energy. In many ways I do see it as a difference in kind of endgame about what people are working towards. And I see that particularly in the community, that we're a part of where there is incremental change and incremental progress that can be meaningful. I mean, it's still a good thing. People can get paid better. We can have cars with better fuel efficiency and other things, which means it's largely improving upon the status quo in very incremental ways. 

There's another end game, which is actually looking towards a much broader transformation. So how do we actually re-envision the way that we think about wealth and its distribution in society? How do we re-envision our relationship between the planet and transportation and how we connect with one another. And that of course is a bit scary because we don't have all the answers, but I think it's important that we center our focus on that. 

We went through a bit of a transformation ourselves as we came upon 10 years since the term of impact investing was first coined. And we did some work to think about the next decade for impact investing. And so we published our findings in a Roadmap for the Future of Impact Investing: Reshaping Financial Markets. That title is important because it's not a roadmap for the future of impact investing alone. It's about reshaping the financial markets. And why we came to that conclusion as the goal for this community for the next 10 years was a simple recognition that as we looked at the first phase of what I'd call the formalization of this community around the brand of impact investing and people have been doing this for many, many, many years before that term was coined. But around that decade of activity, we'd seen amazing growth. Every metric we could come up with, we saw a lot of progress. And for many of the listeners who are tuning in now and many others all around the world have helped to drive that progress. 

But when you zoom out and look at issues like climate crisis or inequality, it's hard to feel successful. And it really begs the question of what does success look like in a failing system? And that really forced us to reckon with the fact that our end game needs to be, not just moving more capital to impact, but how do we have an impact on investing itself? Which is lofty. And I realize that's ambitious. 

We've been working to really orient ourselves towards–how can The GIIN and our community play a role feeding into a much broader effort on trying to build a better system? And as we look to do that just over the past couple of years, one thing that was quite interesting is that so many things in the context had changed and this, this was pre-COVID. But we had everything from the election in the US, Brexit, the rise of populism in many parts of the world. We also had the Paris Climate Accords and the Sustainable Development Goals and other things that had really scrambled the landscape. And what we saw was a proliferation of great efforts and initiatives and movements all with titles that we're all familiar with, but it's kind of a dizzying array of different efforts. So there's impact investing, there's of course, our wonderful colleagues working on benefit corporations, there's people focused on inclusive capitalism, sustainable capitalism, regenerative capitalism, restorative economics, ESG and so many other things. And the question that we started thinking about was how do we make sure this all adds up to something that is greater than the sum of the parts?

I do think systems change is on the table in a way that it hasn't been–at least in my professional lifetime. But I also do fear that we won't be able to seize this opportunity because of fragmentation. And so we've been doing some work with a number of partners through the New Capitalism Project to try to understand the landscape of how different actors are approaching systems change so we can better make sense of that ecosystem. And that work is underway right now. I approach that work with a lot of humility, but I really do hope that we can help provide a better landscape of how different actors are thinking about the futures that we're working towards.

One of the things that we're now centering on is that we're seeing folks working on, at a very basic level, around three different kinds of orientations. One is those who are looking at long-termism. I'm really trying to think about a long view that will help work out a lot of and with the hope that that'll actually orient a lot of people around social and environmental issues. Another of course is stakeholder capitalism, which Fran spoke about earlier today. And then the third is around rebalancing power. Some think one leads to the other and this is some of the discussion we're having now, but I do think that last one is where I think we need to spend a lot of attention. To what degree are we actually willing to explore how we shift power in our society? It's really complicated. It's really messy, but I do think that is one of the fundamental things that's in play at this moment. 

Laurie Lane-Zucker: Fran, do you have anything you want to add? 

Fran Seegull: Yeah would love to build on Amit’s comments and wanted to share a note of thanks to him and The GIIN and the broader group that's working on this New Capitalism vision. That thinking has been very helpful to us at the Alliance and developing our emerging theory of change on these various issues. 

So just to align on the concepts, and I actually think they map well, Laurie, to the three potential horizons that Amit laid out. 

First we think about incremental change. And as Amit said, as a transition to long-termism. And there's been a lot of market traction in that regard, a growing recognition, especially among mainstream capitalist actors. The Business Roundtable announcement in August 2019 of 181 US CEO's on the restatement of the purpose of the corporation and, to Cheryl's point, accountability. Teeth and accountability are something that we really need to work on there. And Larry Fink issues his annual letter. 

Long-termism thinks about the status quo of short-term extractive capitalism as being unsustainable and financially unsustainable. So here and again, we need to make the case that impact factors are financially material. 

And there were a number of Trump era regulations that directly attempted to prop up the fossil fuel industry. There was a spate of regulations that had the effect of directly challenging the materiality of ESG factors of the Department of Labor and the SEC, for instance, even though there's plenty of research to back up that ESG can be effective risk mitigant and drive performance. 

So with this incremental change framework, I think we're making progress toward a more long-term focus, but a lot more work to be done, even in that kind of first realm on the reform side echoing on it again think of that as a stakeholder capitalism. So thinking beyond shareholders to account for a broader set of constituencies, 

And we think in some ways that right now in the current state or in the long-termism paradigm, a lot of disclosure from corporations is selective, voluntary, unaudited, and unverified. And so while I think that there's been a lot of good movement, it's mostly been in the private sector. And in order to get to the reform level, there's a lot that needs to get done to manifest stakeholder capitalism. But one of them again is mandated disclosure. Now what we do with the mandated disclosure is another question.

And then beyond stakeholder capitalism, to what you call the transformational phase, Laurie, focuses on this power shifting. A couple of examples here that we've been really motivated and inspired by. 

There are some local models like the Ujima Project in Boston that's being replicated throughout the country, which is a democratically managed pool of funds with a capital stack that offers equity and decision rights for residents in those communities and communities of color. 

Heron, which is a private foundation, announced last year their intentions to carve out, and put off balance sheet, chunks of capital and create community investing committees to make the decision without Heron’s guidance on how to deploy capital in those communities. That is maybe a tangible example of not just power shifting, but fully power seeding. 

And, like Amit said, we need to work on all three forms of change, incremental reform and transformational and impact investors in particular need to consider their role in bringing to fruition wholesale change. There are some critiques of our practice that we're complicit in a broken system that we manifest a broken system that philanthropy is complicit in a broken system. And I think that those critiques can be valid. And so really need to take a look at how personally, and as a movement, we are complicit in a system that is creating unequal outcomes.

Laurie Lane-Zucker: Cheryl, your work takes you very close to the ground in practice. I'm wondering, how are you seeing authentic transformation embodied in the work of your Echoing Green fellows? And can transformation be achieved in both big disruptive projects as well as those that are small by design? Or only in the first of the two because of their scale?

Cheryl Dorsey: So we, I have the privilege of working with a lot of proximate folks, right? So for those who are not familiar with Echoing Green we're an early stage funder of emerging social entrepreneurs. We've been at this for 35 years. Have a footprint in about 90 countries around the world. And I would say particularly in the last 10 to 15 years have really tried to make sure we have built, as an inclusive and generous and equitable search and selection process to welcome in folks. 

So when you look over the past decade, now about 75% of the folks that we invest in, in the U S are folks of color, 75% globally are proximate, about 50% are women. So this notion that lived experience is not just sort of a reflective statement. It is directly connected to better solutions because of a lived experience, informed view or race informed view of how to solve a problem, a gender formed view of how to solve a problem. So I think in terms of the kinds of solution sets that we're seeing I think they get better when the share of voice of those invited into these spaces increases.

And I can't help, but answer the question through the lens of social movements, I think at the end, and that's really sort of the arc of history that gets us to bend towards justice. And this fundamental notion that at the end of the day, you got to change hearts and minds at scale. That's what changed it, regardless of any particular project or any mechanistic view of where, and in what you invest, it is about shifting culture, shifting behavior.  

And what I think is important about these individual nodes and data points on the ground is not only are they identifying chinks in the system, that soft underbelly where you can intervene and hopefully disrupt in a pretty profound way. But also collectively the power of that disruptive frame collectively is pretty powerful, right? 

The evolutionary biologist Elisabeth Sahtouris, who did the research on the transformation of the caterpillar into the butterfly, says the caterpillar system gins up these imaginal discs. At first there's one of them and the caterpillar’s immune system kills it. And then there are two, and then there are four, but exponentially over time, the caterpillar system cannot forestall these agents of change–these interlopers. And they overwhelm the system. But out of that you get this transformation, this beautiful new thing, and whether it is a butterfly or a new way of thinking about a more sustainable and equitable society, that's what we're trying to get to.

So it really is–how many Davids can you field? And over time there will be enough. The army of Davids will be enough to sort of overwhelm again, these sorts of sclerotic inequitable systems. So I think it's both-and situation Laurie. I think you need both. I think increasingly it is difficult, if you don't have share of voice of the most proximate to ever get to titrate the right sorts of solutions that work for enough folks. 

Laurie Lane-Zucker: Jed, you were working on bringing the social return of investment into the discussion as far back as the 1990s. Your most recent book, The Purpose of Capital instills a great deal of evolutionary, humanistic, and interpersonal philosophy into the practice of impact investing. And so I'm wondering, how has your vision of what we now call impact evolved over the years and how much closer to your ideal, if I can use that term, that your ideal of blended value. How much closer are we to that now as we enter into the second year of the decade of action?

Jed Emerson: Well, first off, I love what you just said, Cheryl. Really, really powerful. So thank you so much for that. I think that for a lot of us, the challenge is that where you stand depends on where you sit. And we often confuse our position, our organization, our particular lens as the position, the organization, and the lens that we should be advancing through all of this.

And I think that what happened for me was I reached a place in the late nineties, I realized I was having the same conversation with a whole set of different actors. All of whom thought they were promoting very unique and special kinds of perspectives and practices. But to my mind, I morphed into this place of saying the only thing that really matters is your understanding of the nature of value that you're trying to create through your life's work, through the application of the resources you have access to. 
And whether you're a for-profit or nonprofit, doesn't matter whether you're making grants or a market or concessionary rate capital investments, doesn't matter. The only thing that matters is, is pursuing clarity around that idea of what's the nature of the value that you seek. And I don't think that's anything new. That's not like some blinding insight. 

I think what happens is we get so–I was in the same place in the nineties. I got so focused on social entrepreneurship and venture philanthropy that I kinda missed the forest for the trees. And what I see happening now, in some ways I obviously really celebrate, we've got more and more capital kind of being deployed with some sort of mission or purpose, orientation and consideration. And that can only be for the good, hopefully. As long as we have what Fran was talking about in terms of the transparency and the accountability and all the other parts that go with it. I think that the challenge we have is in some ways that we’re confusing a good with the pursuit of the task.

And so we have to be cautious not to get so enamored of our financial engineering of the size of the funds that we're raising now of the next greatest definition or term that we get to promote and advance–that we lose sight of the fact that these are all means to a greater end. And that's really what our conversation should be around. And again, I think part of what's challenging for each of us is that when you look at everything that's out there and you look at everything that's in motion and you look at everything we feel called to be engaged with. It can really be overwhelming.

And I think it was Gandhi who is supposed to have said something along the lines of whatever you do will be completely insignificant and it's absolutely critical that you do it. And so I think that when I look at the field today, as opposed to 20 or 30 years ago you know, on the one hand I feel completely insignificant to any of it. I mean, I really spent a lot of last year, not saying a lot of anything, because I realized there was so much emotion that I had to really just sit with it, absorb and understand. And at the same time, the answers that are going to bring us forward are not the ones that have brought us to where we are today. And so we need to be open to, again, that process of co-creation and moving forward and affirming this deeper sense of purpose and meaning that we're all naturally wanting to be drawn toward the creation of. 

Laurie Lane-Zucker: Amit as you and both Fran were referring to earlier, in recent years we've seen a notable shift from shareholder to stakeholder capitalism. I don't know if this is a fair question to pose because we're still grappling to fully embrace the idea of stakeholder capitalism. But nonetheless, I'm going to ask this hypothetical question. Does it stop there? Or is there something beyond stakeholder capitalism that we need to be reaching toward?

Amit Bouri: Well, I think it all depends. It depends on what stakeholder capitalism means to you. I think that you're building on Jed's point around a means to an end. What is the end that we're trying to accomplish? It's a little bit of what I was trying to speak to before about the end game. In service of what outcome are we working towards a stakeholder capitalism? 

Stakeholder capitalism I think marks a pivot in thinking from shareholder primacy and the purpose of business and all the work and labor and resources, natural and human, that go into businesses in service of one type of stakeholder to a broader set of stakeholders. But I do think you're going to kind of lay that across the spectrum in terms of what that means in terms of actual shifting of power. This is a term that's been adopted and endorsed by the World Economic Forum, the Business Roundtable, as well as a lot of advocates and activists who don't normally find themselves in alignment with the Business Roundtable and the World Economic Forum. And the reason is that I think we're still populating what that means. I think there's a great kind of debate over what stakeholder capitalism actually looks like in practice. Our colleagues at B Lab put out a great piece right after the business Roundtable announcement came out sharing their version of what that looks like from a benefit corporation perspective.

There's a group that we're a part of called Imperative 21 that's trying to chart the course towards as stakeholder capitalism. And one of the big things that I think is important for us to really unpack here builds on this point around power that Fran and Cheryl spoke to. Stakeholders can get treated better than they are certainly. And they need to be. But that's one version of it. You can pay people better. You could have slightly better environmental policies or others. It's a very different version to think about our role in terms of power and decision-making or share of voice as, as Cheryl described. Who has a seat at the table? And who decides how much we benefit other stakeholders? Who sets the policy for the environment? Is there a representative for the climate or for the planet in decision-making? Are workers represented in decision-making bodies or communities? And that I think is something that we're still figuring out. You know, it's a bit visionary and it's a bit outside of our grasp, but you already heard a couple of great examples of models that are being developed that may seem kind of radical or pioneering now, but may be normal before long depending on how things play out. One thing that I found, just to close, is that I found it has been quite fascinating over the past two years to see the critiques of capitalism evolve. 

I grew up in Northern California around hippies who were criticizing capitalism when I was a young child. And now we see billionaire hedge fund managers, titans of the tech industry, the World Economic Forum and others. And so I think the critique is becoming more clear. What I don't think we have yet is what we're working towards in terms of that vision. I launched a podcast last year called The Next Normal. And the idea was to interview leaders who were thinking about this to help populate that vision. Whether it's from a perspective of an academic or from someone working in Indigenous communities or others, but how, what could that next on will look like?

And I think that's what we need to focus on is you know, helping to articulate that vision that helps motivate all of us through the hard work that's ahead of us. 

Laurie Lane-Zucker: Fran let's talk policy, you're very active on the policy front. How has public policy shifted to support or restraint impact’s progress both in the United States and also internationally, such as in Europe and in emerging economies.

Fran Seegull: How much time do you have Laurie? I'm joking. We have always taken the position at the Alliance that impact investing has broad appeal across the political spectrum. And we have been operating in Washington over the last four years and we've had some wins that were bipartisan in nature at a time when
Congress couldn't agree on everything and Congress and the president couldn't agree on anything. Opportunity Zones, the first community investing incentive in 15 years got pushed through. TBD on the accountability and community impact that we'd like to see. We'll be keeping an eye on that. The creation of a modernized development finance institution for the United States, the US Development Finance Corporation (DFC). So these were only possible as I mentioned, due to bi-partisan leadership, but, and especially in light of the crises that that we've been talking about, including the crisis that our democracy of that Cheryl opened with at the beginning of a new presidential administration, we have a growing desire to shift how we think about the role of policy. 

In the past sometimes impact investors’ posture in regard to policy is to have government step out of the way and let capital flow for impact. But today I would say that there is a very strong desire to see renewed leadership from policy makers in Washington. Cheryl also mentioned that the private sector has stepped up in historic ways over the last year or so.

But the scale of our challenges has strained the limits of private sector response. Even though I think the private sector could do more. So one of the things that we keep calling for is a real tri-sector response. And that's what we need. So we recognize in the moment there was a lot of energy for new policy solutions, the beginning of a new administration, the start of a new Congress. We launched a report at the US Impact Investing Alliance called Private Capital Public Good which has a set of 12 recommendations on how federal policy makers of the next two years could leverage the solutions of impact investing to help contribute to a just and equitable recovery. The report is organized around the narrative frames that I touched on earlier. So in transforming community investing to confront inequality, and obviously we need much more than community investing to confront inequality, but we're trying to look at it through a lens of what investors can bring to the table. We've called for an expanded support of Community Development Finance Institutions (CDFIs), and Minority Depository Institutions (MDIs), which you folks know are critical community lenders that have the ready to go capacity to reach the hardest hit populations. PPP did not reach Black communities or tribal communities, rural communities, the way it needed to. And we see CDFIs and MDIs as capillary and financial institutions to reach those communities.

We're also thinking about common sense reform around community investing. Tax incentives, like the Opportunity Zone program, need some improvements for sure. And also ways to strengthen the Community Reinvestment Act. Which is a law from the Civil Rights era from the seventies, requiring banks to invest in communities. And much more can be done to modernize it and to flow more capital for impact. 

On the stakeholder capitalism front, which is our other frame on the policies, we're calling for mandated disclosures from large companies, both public and private on ESG factors, alignment of fiduciary duty with long-term considerations. Again, we've had these regulatory backsliding and a lot of these areas and the US is woefully behind Europe. Which if we have time, we can maybe talk about. We also feel that to advance American economic leadership, we need a domestic development finance vehicle. I talked about the US DFC earlier. It's a domestic development finance institution to support US infrastructure, industry, and economic development. The Biden administration is starting to look at some domestic supply chains and how they can be shored up. We saw the holes in our domestic supply chain during COVID and the economic crisis. 

So all of these recommendations require decisive and coordinated leadership from Washington, the White House, and from our sector. So that's why, alongside these policy recommendations, the Alliance has partnered with B Lab and a growing coalition of 45 organizations including The GIIN and, I'm sure, some folks that are tuning in. These 45 organizations, this coalition are working on issues related to these two themes. And we are calling for a White House initiative on inclusive economic growth. Which we envision being housed out of the National Economic Council, the NEC, to help coordinate agenda setting and policy making across federal agencies with Congress and in close partnership with the private sector on investor and business solutions for the recovery. So if anyone is interested in learning more, please go to the US Impact Investing Alliance website, or the B Lab website, which is I'm happy to go into more detail. I always have a lot to say about policy. Policy really matters. We think that we can only get so far with self-regulation, if you will, without accountability, without verification, without audit. And so we're looking for regulation to help us build this pathway to stakeholder capitalism and I hope beyond. 

Laurie Lane-Zucker: Amit, you're the CEO of The Global Impact Investing Network, so I'd be remiss to not ask you, how do you see impact developing around the globe? 

Amit Bouri: It's an incredibly dynamic time. Just for background, in terms of where our membership sits, our formal network includes over 300 organizations in 50 countries. And then we have a broader kind of informal network that spans even farther. We say it all depends on where you sit in terms of what you're working with. And obviously in the European context we see a very different kind of balance between business and society and the role of the government is quite different than what we're used to in the US. In other parts of the world, we actually see a very interesting kind of integrated approach where people are thinking about philanthropy and investment in some cases at the same time, as opposed to one and then the other in separate tracks. So I think that this is an incredibly encouraging time.

And one of the things that I think is also important is that we see a global interest in trying to drive systems change. Context matters. Fran just spoke about policy and the policy environment really does shape the rules of the game for any of the actors. But that said, I do think there's a general understanding through shared experience around the climate crisis, as well as the COVID crisis. That is hopefully, helping to dispel some that illusion that Jed referred to around being disconnected and actually appreciating the interconnectedness that we all experience. I hope that's something that people can take away from the year that we just went through and the crisis we're still living in, is the fact that these things are connected. And across geographic boundaries and also across issue areas or sectors that we normally organize ourselves around.

Laurie Lane-Zucker: Cheryl, have you seen the recent emergence of place-based or community centric investing, providing significant aid to your entrepreneurs? And, more broadly, are the needs of entrepreneurs being sufficiently met by the impact investing space? And if not, or to the extent it's not, what needs to improve or evolve to have a healthier startup ecosystem for mission-driven entrepreneurs? 

Cheryl Dorsey: Lots to unpack there. So I'll quickly say that I have certainly, in the last five to ten years, seen an important shift away from a singular focus on the individual entrepreneur to this notion of how do you build hospitable ecosystems to be the rising tide that lifts all boats. And for Echoing Green, it has shown up that now that we've sort of reached a critical mass, there are urban hubs around the globe where we now have a critical mass of folks. So we ourselves are trying to figure out all of the levers that go into building an ecosystem–not only the capital, but the talent, the regulatory environment, the communications, all that kind of stuff. 

We're trying to build both economies of scale and economies of scope to support the work of our fellows. So I do think the place-based work, this localization push, which is also playing out in the world of global development, as we're trying to decolonialize a lot of this stuff, you are beginning to see this. 

However there's always a very important equity focused conversation to have. I was just reviewing some statistics the other day. We invested in a phenomenal woman of color, Katherine Finney, who started an organization called Digital Undivided which was working to help Black and LatinX tech female entrepreneurs get over the startup hump. And the data that she pulled out on the lack of access to capital for these women was just disgraceful. So in the tech ecosystem, Black female founders essentially receive zero venture capital. And there were several thousand deals when you look across the years from 2012 to 2014, less than 1% of those deals went to Black women. And then those Black women who did receive outside funding, the average investment was like $36,000 dollars versus the average seed deal of $4.5 million. So until you deal with those structural inequities that show up, not only in the venture marketplace and show up in the philanthropic marketplace. We've done some disturbing research that shows similar disparities. We have got to get our arms around that because we are not providing the fuel that these entrepreneurs need to do their work. And when you look at the fact that 60% of African-American folks are employed by small businesses, this is sort of a virtuous circle that is being disrupted because of the lack of capital and other structural inequities. So this is a long hill to climb, Laurie. But I am hopeful that people are paying attention to it. And I look at folks like, Fran and Amit must also know the wonderful Daryn Dodson from Illumen Capital. I think his work with fund managers and investors around implicit bias and how you get to better investment decisions by going through that kind of deep reflection and work, is another strategy that more of us need to look at. So it's a lot of work to be done, but it's essential. I think we don't get to a better, higher place unless we do it. 

Laurie Lane-Zucker: Jed, let's talk about ESG, which for those of you who may not be familiar with the term it stands for Environmental, Social, and Governance. I want to talk about the space more broadly. ESG funds that invest in public equities have been some of the fastest growing funds in the past year or two in the whole financial sector. How would you characterize the impact of ESG? Where do you think it's most promising, most authentic? And where do you, in your opinion, find it lacking?

Jed Emerson: It's a really critical question. And as I listened to this whole conversation, though, it's not the question that I want to sit with right now. We have just a few minutes and so I really want to come back to a related issue. And it has to do with the fact that all of this is great. All of this needs to be happening. We need to be advancing these new ideas, these new concepts, these new practices. And we have to recognize that all of this is just a social construct, right. It's simply how we have chosen to think about the world and the policies, the regulations, the frameworks, the metrics that ESG has, or doesn't have, they're all just self-imposed constructs that we basically are managing to.

And I think we need to really kind of pause as we do our work, right. This is very important work. So I'm not calling that work into question, but I'm saying that our mindset has got to change because the aberration is financial capitalism. If you look historically at how we have provided for our people and how we've related to the planet, if you look century upon century upon century, the answers really are there.

First Nations people had a very different way that they thought about their relationship and responsibility to each other and to their community and to the planet. In African communities there's a very different kind of understanding of this. And I feel like we're, in some ways, rearranging the chairs on the Titanic. We're not really asking the more fundamental and profound questions that have to do with purpose and meaning. 

What is this really about? We're going to have great sets of metrics that will, in essence, guide us over the cliff. And so I would really encourage us to just pause. 

And this is why when we talk about The Purpose of Capital–it's a free book, number one, so I encourage people if you haven't downloaded it, get the free ebook–but I really needed to sit with, how do we even get to this place where we could think about ourselves as being separate from each other, from the earth? 

How do we get to a place where you could, to Amit’s point, think about philanthropy as different from investing? It's all just fucking capital. Right? And this is an issue that I and others have been promoting for 20 years. It's kind of like, come on. People have just got to change their head. And so whether you have to do that through reading or through experience or through psilocybin, whatever it is, we just have to change our mind if we're going to go somewhere different from where we've been. So I just had to say that before we come to our last five minutes. 

Laurie Lane-Zucker: I was kind of waiting for the colorful Jed to appear. So that definitely happened there.

Fran Seegull:You know, it wouldn't be a session with Jed Emerson if we didn't have at least one F bomb. I appreciate the altitude and the kind of fundamental self inquiry and questioning that you are putting forth. I think one of the reasons we've worked together on and off for a long time, well is because you're a philosopher and I'm a bit more of a pragmatist. 

There is no way that you could have done what I did for the last four years on Capitol Hill and with the agencies. And there's no way that I can do what you're doing. And I think that while we contemplate the nature of value and the nature of selfhood and ourselves relative to each other and nature, there are a bunch of regulatory windows that are open, which probably sounds prosaic to you, but there is one now in Europe and I spent a lot of my time thinking about ESG disclosure and the European commission and indeed, our own government and regulatory moment. 

We don't have regulatory moments. We rarely have global coordinated regulatory moments. And so while we are taking Jed’s challenge, my challenge is for us to act because we have a window now. Even within the construct of society, as we know it and capitalism, as we know it, we've got time.

Amit Bouri: I wanted to connect this back to something Cheryl said earlier around the cultural shift that's needed. One of the things I'm drawing out–and this part of the conversation is the need for both technical solutions and technical progress–but also the recognition that alone will not get us the outcomes that we want. 

We can have great science, but we need people to operate differently. We need to see the relationship to each other, to things like public health, which we're all going through right now in a different way, despite what the data and the research shows. And I think that is part of what the moment we're in now is we not only need to develop a shift in the way we think, and shift, the way that we see the purpose of our system and the purpose of our economy and our political system and beyond. But yeah, we also need to populate that shift with the ways that we should, we can live and operate within it. And I think that is the challenge among other challenges that we have, but what we're trying to, what I hear. This conversation's work is being collectively done across the board on this front. 

Laurie Lane-Zucker: Last question. Can each of you share a call to action?

Cheryl Dorsey: As an African-American woman living in the United States who has heard Black Lives Matter, which is a re articulation of Dr. King's Memphis sanitation workers strike, I am a man, which was the motto of the society for the abolition of slavery in the 1700s. Am I not a man? Am I not your brother? 

We have got to stop doing this. We've got to use this moment to break the hold that structural racism has over this country and allow us to finally live into the founding ideals that are so soaring and aspirational, that bump up every single day against the sort of the vicious and devastating outcomes that have led us to this moment and this law. So we’ve got to act, we all have to raise our hand. 

We’ve got to invest in folks of color. Just start writing checks. Let's start changing the way we support these folks to help them along. Let's build the kind of multigenerational multi-racial, cross-class coalition that will lead us to a new and better higher place and start now. 

Fran Seegull: It's something that I touched on earlier and that is achieving the SDGs by 2040. Addressing systemic racism, addressing climate change, and addressing income and wealth inequality requires a broad transformation of our economic system. And we need all hands on deck. So whether you're an investor. Whether you're a corporation, whether you're a small business, a large business of, you know, working in philanthropy or working in an NGO. And of course, government, it's just essential that we work together across the sectors to try to deliver the solutions that our world needs.

Amit Bouri: I think so much great stuff has been said, but I think I've just recognized that this moment in time, as Cheryl was pointing out, that this is a window that many people who are advocates and activists, we didn't wait decades for in terms of the stars aligning for what I hope is really transformational progress. It's happening now. And so I think we have a very diverse group in this session, so I hope. But everyone just sees their own role and part of the solution and whatever you're bringing to it. It is a time for us. Whatever we were doing before wasn't enough. So the question is, how in this incredibly challenging time do we push ourselves to do something different and better than how we've approached it in the past?

Jed Emerson: I want to pick up on that last comment. I would ask that we have a call to new action. I think that we are a society that loves to think that we actually know what's best–that we are the brightest. That we're smarter. We have better technology. We have great insight. We have a new set of reflections and papers.

Surely we must be moving in the right direction? And I guess I would ask–don't just do something. Sit there. Before we act, let's listen. I think it's time, especially for 62 year old white guys to shut up and listen to other people's leadership and not fill the space all the time with the answers. And the answers will come through collaboration and co-creation as we move forward.
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