8 women shaping the future of finance and ESG
The talent pipeline for women in finance shamefully remains a ruptured one, and especially so for women of color.
McKinsey found that while women have a slight edge at the entry level, comprising 52 percent of the industry workforce, representation falls off at each rung of the corporate ladder, with an especially steep drop for women of color: From entry level to the C-suite, the representation of women of color falls by 80 percent.
Some corners of the financial sector remain notably more boy’s clubby than others, such as venture capital, and most predictions I’ve seen for growth in female leadership across financial services are quite disappointing. In an industry that’s hyper-focused on outperformance, finance is missing massive opportunities to outperform.
That said, there is a growing bench of badass women leading the transition to a sustainable financial industry that prioritizes sustainability across loan books, equity portfolios, private market debt and just about anywhere else deals are made.
March 8 marked International Women’s Day 2022, so in honor of the holiday I’m using this week’s column to highlight eight women who are exemplars in helping redefine finance’s role in the economy and society, and to realize sustainability in the real economy.
Catherine Buan, Head of Investor Relations, Sustainability and ESG Reporting, Asana
From the Web 2.0 tech boom to the rapid rise of ESG and impact, Catherine Buan has deep experience as the connective tissue between investors and tech firms. She led investor relations (IR) for Oracle, Ariba, DocuSign, Okta and, most recently, Lyft before joining Asana to lead IR and ESG reporting. Asana, a work management software platform co-founded by Facebook co-founder Dustin Moskovitz, provides a navigation system for managing a work world that has become more distributed and, often, more confusing.
Any reader who manages ESG reporting for their organization will know that collecting the requisite data and aligning to the myriad frameworks and standards is just one piece of the challenge. Maybe Joel Makower captured your experience in his GreenBiz 22 keynote kickoff? In 2022, Buan will be supporting Asana to help companies with their ESG reporting, offering easy-to-use workflow frameworks to help manage ESG reporting requirements, set goals and manage the many cross-functional workflows that reporting requires.
While the need to know who is doing what by when has always been a pain point, that pain is even more acute as hybrid work has become our new normal. Buan is supporting Asana’s charge to offer workflow frameworks for companies to manage ESG reporting requirements. The work of sustainable business has some quite messy obstacles –– political tensions, entrenched interests and varying ideological convictions among them. Buan is working to make sure that logistics and workflow management aren’t obstacles to the realization of companies’ missions and ESG ambitions.
Nili Gilbert, Vice Chairwoman, Carbon Direct
When Nili Gilbert, a self-described climate finance nerd,” was introduced to Jon Goldberg, founder and CEO of Carbon Direct, they became fast friends. Gilbert started on the Advisory Board for Carbon Direct, and now serves as the firm’s vice chair. She has also worked with the UN-convened Net Zero Asset Owner Alliance (NZAOA), where she served as Chair of U.S. Policy, and with the Glasgow Financial Alliance for Net Zero (GFANZ), where she is chair of the Advisory Panel of technical experts.
Carbon Direct works both as a scientific advisor to such companies as Microsoft and Shopify to develop and fulfill their carbon commitments and with institutional investors to manage committed capital and make direct investments into carbon removal and utilization companies. Gilbert made the decision to dedicate her time and efforts on a full-time basis to this group because of its unique role in the climate landscape. She and team place a high premium on deep technical expertise through about 60 climate scientists, who help inform the firm’s capital management and advisory work and are the “special sauce” of everything that they do.
Financing the transition to a net-zero economy requires a dramatic expansion of climate solutions across every sector. Her work at Carbon Direct brings science to finance and is making a tangible impact by investing in companies that are fundamentally changing the highest-emitting, hardest-to-abate industries. There is a tremendous amount –– to the tune of many trillions –– of capital pledged to net-zero, but all this ambition will require solutions at scale. Gilbert and team are working to drive that scale each day.
Jennifer Grancio, CEO, Engine No. 1
Engine No. 1 was launched at the end of 2020 and the firm shortly thereafter led a successful campaign to place independent board directors on ExxonMobil’s board with the expertise and experience needed to help guide the company’s transition beyond fossil fuels. Prior to joining Engine No. 1, Jennifer Grancio served as a founding member of BlackRock’s iShares business, leading European, U.S. and global distribution. Her time at BlackRock, coupled with her experience leading an advisory firm that worked closely with CEOs to accelerate growth, positioned her well to help Engine No. 1 make a significant impact on Day One.
The investment firm was built to “create long-term value and bring common sense back to capitalism.” With Jennifer Grancio at the helm, the firm has since launched its first ETF, VOTE, which tracks an index of 500 of the largest companies and votes its shares with the goal of creating long-term financial value through positive impact and active ownership. This past month, Grancio and team launched their second ETF, NETZ, an actively managed fund that aims to invest in companies that will drive and benefit from the energy transition.
Engine No. 1’s Total Value Framework is the foundation of everything they do and NETZ is the real-world application of the idea that environmental actions can impact economic outcomes. For the first time, through the Total Value Framework, Grancio’s team is able to directly quantify previously incalculable ESG and sustainability impacts, creating a new, more precise way for companies to make capital allocation decisions, identify high-impact actions a company can take and improve financial performance over time.
Chris Hagler, Partner, Independence Point Advisors
Chris Hagler has been working in ESG for over a decade, helping companies to develop ESG strategies and measure impact. Now, working within the capital markets structure at Independence Point Advisors (IPA), Hagler is excited to help companies capture value from their ESG efforts while helping the capital markets to allocate money towards the companies that will make a positive, systemic impact.
Evidence increasingly shows that diversity improves financial performance. IPA is the first women-owned, diverse-led investment bank (with a deep bench) to integrate ESG advice into strategic advice for CEOs, founders and boards, and was founded on the belief that today’s clients have a diversity of opportunities and challenges that require a diversity of talent to navigate. The firm believes companies do not need to make a tradeoff between ESG and strong financial returns — and it is leading the way in transforming the industry from the inside out to prove it.
Supplier diversity, as Hagler put it, goes beyond choosing which toilet paper or trucking company to use. If companies sincerely want the strongest outcomes, diverse advisors must be involved in the critical decisions. As an example, M&A deals are the most transformational deals done by companies, yet there continues to be a lack of diverse representation in these transactions. Hagler and IPA look forward to being catalysts for changing who has a seat at the table.
Dr. Celine Herweijer, Group Chief Sustainability Officer, HSBC
Dr. Celine Herweijer is HSBC’s first Group Chief Sustainability Officer –– the first time sustainability has sat in the Group Executive Committee. Herweijer leads delivery of the bank’s net-zero-by-2050 goal as well as the firm’s wider sustainability agenda. As a financial institution, the bank recognizes the need to tackle the tough but critical issues head on, e.g. fossil fuel finance. In December, HSBC launched a phase-out policy for thermal coal financing and in February set short-term, science-based targets for reducing financed emissions in two emissions-intensive sectors –– oil and gas, and power and utilities –– by 2030, with more sectors to follow later this year.
Herweijer joined HSBC with a simple conviction: finance shapes the future. Thankfully, the world is waking up to the power of finance to deliver meaningful change on climate and ESG. HSBC, with Herweijer leading sustainability, is helping to play a leading role in industry alliances like the Glasgow Financial Alliance for Net Zero (GFANZ), which is pursuing what could be considered a rewiring of the financial system.
Unlike many of her banking peers, Herweijer was originally in climate science and a NASA Fellow by training. She completed a PhD in climate modeling and policy from Columbia University, and serves as partner at PwC and as the company’s global sustainability and innovation leader. Herweijer also serves as co-chair of the We Mean Business Coalition, which works with the world’s most influential businesses to advocate and take action on climate change.
Marene Jennings, Managing Director, Alternative Investments & Manager Selection & Diversity Champion, Goldman Sachs
Marene Jennings is nearly a full year into overseeing efforts related to diversity, equity and inclusion (DEI) for the external manager selection platform within Goldman Sachs Asset Management, notably working with her colleagues on sourcing diverse-owned managers and diverse-managed strategies across all major asset classes. Jennings’s goal for 2022: Allocate more capital to Black women portfolio managers and general partners in line with the “access to capital” pillar of the One Million Black Women initiative.
Jennings’s team believes that improving access to capital for diverse-owned managers –– who only manage 1 percent of global assets –– addresses a desire by investors to benefit from a wider range of unique investment perspectives and the ability to encourage the asset management industry to look more like the world in which it operates. She hopes that her clients benefit from strong diverse manager performance and hopes to see improved diversity metrics and enhanced DEI policies amongst the asset managers they work with.
After almost 18 years at Goldman Sachs, the topic of diversity, equity and inclusion was something for which Jennings had a personal passion; it is also where she had an ability to implement change as a senior member of the external manager selection business. Institutional and high-net-worth clients were asking her more frequently about this topic while the firm was also building out the launch of the One Million Black Women initiative, and Jennings was asked by the heads of her group to be the Diversity Champion. She is thrilled to be moving $10 billion in direct investment and $100 million in philanthropic support to address the dual disproportionate gender and racial biases that Black women face.
Stephanie Maier, Global Head of Sustainable and Impact Investment, GAM Investments
As Stephanie Maier sees it, the period to 2030 will need to be more than just the decade of action –– it must be the “decade of detail,” too. To collectively embrace this period of transformation, metrics and methodologies to measure progress and sectoral pathways towards net-zero have to evolve. The fact is, says Maier, who has held leadership roles in sustainable investing for over a decade, we are now living at the equivalent of 1.6 Earths — that is, well beyond the planetary boundaries in which our planet’s ecosystems operate. Asset managers control more than $110 trillion and Maier firmly believes that asset managers such as GAM Investments need to be at the forefront in driving that change.
Maier is also the investor representative for Europe and the current Steering Committee Chair of Climate Action 100+, an investor-led climate initiative. The Net Zero Company Benchmark it published last year provided an important framework to measure commitment and progress against net zero; an update will be published in the coming months. Under Maier’s leadership, GAM Investments joined the Net Zero Asset Managers initiative (NZAM) and has specifically committed to reviewing the firm’s interim target at least every five years, with a view to ratcheting up the proportion of assets under management covered.
It is now widely accepted that there is an urgent need to accelerate the transition towards global net-zero emissions, and the explicit private-sector support for tackling issues from deforestation to coal at COP26 marked a “paradigm shift,” Maier told me. As an active manager, GAM has the opportunity to develop thematic and highly targeted solutions to address specific ESG issues. Maier sees engagement and stewardship as the key levers, and as investment managers GAM can support both the companies it invests in and the clients it invests for in line with net-zero goals.
Esther Pan Sloane, Managing Director, Avenue Capital Group
As a diplomat with the U.S. Department of State, Esther Pan Sloane helped to negotiate the Sustainable Development Goals (SDGs). As a UN staffer, Sloane worked to attract private-sector capital to SDG-positive investments. Now, with Avenue Capital Group, she has the opportunity to help direct significant flows of investment capital to companies accelerating the transition to net zero, which the firm does through tailored, flexible debt solutions that support companies and projects generating positive and measurable environmental impact.
The Avenue Sustainable Solutions Fund team works with investee companies to quantify, measure and report their environmental and social impacts. Avenue’s detailed impact indicators, which companies report on alongside their financial performance, can help reduce the risk of greenwashing and can demonstrate that it is possible to make commercial, profitable investments at scale that also achieve measurable impact.
Sloane previously worked with Avenue Capital Group co-founder and president Sonia Gardner in her capacity as United Nations Capital Development Fund (UNCDF) Goodwill Ambassador for Gender Equality in Access to Finance, promoting the need for female entrepreneurs to access investment finance in the Least Developed Countries.
March 9, 2022 at 09:39PM
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