Investing for impact: Interview with Prof. Durreen Shahnaz, CEO and Founder of Impact Investment Exchange (IIX) and Founder of the Orange Movement™


Taking social and environmental impact into account in investment decisions is clearly ethically sound. But, as Professor Durreen Shahnaz explains, it makes mathematical sense, too, promising a more prosperous and sustainable future for the whole planet.  

Could you share the inspiration behind founding Impact Investment Exchange (IIX) and the Women’s Livelihood Bond and how they have evolved since their inception?  

Impact Investment Exchange (IIX) and the Women’s Livelihood Bond™ (WLB™) Series, a flagship financial product of the company, were born from my unwavering commitment to making the financial system equitable by uplifting gender minorities and empowering the 99 per cent and the Global South. 

Throughout my life, I have been a tireless advocate for gender equality and sustainable development. My quest to make women, underserved communities, and climate front and centre of the financial market shaped my life journey.  

My experiences range from growing up as a young girl in Bangladesh, where girls had limited opportunities, to becoming the first Bangladeshi woman to break barriers on Wall Street. My journey continued with founding my start-up, OneNest, and eventually establishing IIX, where I conceptualised the world’s first social stock exchange. My book, The Defiant Optimist™: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women, details this remarkable journey. 

One of our greatest innovations is the Women’s Livelihood Bond™ (WLB), an innovative gender-lens bond that brings together the importance of gender equality and climate action. The bond series empowers women, girls, and gender minorities across a multi-country and multi-sector portfolio while enabling climate action. Over the past few years, we have launched five WLB Series issuances, putting over $128 million in the market. We are now working towards our sixth issuance of $100 million that will come to the market next month. The WLB Series has empowered millions of women and their families across Asia and Africa. 

The bond series empowers women, girls, and gender minorities across a multi-country and multi-sector portfolio while enabling climate action.

We have also focused our efforts on building the sustainable finance ecosystem with the world’s first asset class for gender-lens investing (Orange Bond Initiative™), two funds focusing on women (Women’s Catalyst Fund™ and Growth Fund™), a proprietary impact assessment tool that verifies impact in the last mile and give women’s voice a value (IIX Values™), and a fintech platform (social stock exchange) to connect social enterprises with impact investors (Impact Partners). 

The Women’s Livelihood Bond is a pioneering financial instrument designed to empower women and create a positive social impact. Can you elaborate on its effect on marginalised communities and women entrepreneurs? 

So far, the Women’s Livelihood Bond™ (WLB) Series has successfully raised over $128 million through five issuances, positively impacting the lives of over 1.3 million women and girls throughout Asia and Africa. 

Excitingly, this year marks the launch of our sixth issuance, WLB6, with a bond size of $100 million to empower 500,000 women and girls in Asia and Africa. 

The capital raised through the WLB Series has gone towards women-led or focused businesses or those dedicated to creating products and services that significantly improve women’s lives and climate action across Asia and Africa. We firmly believe that, with women and gender minorities making up more than half of the global population, unlocking their potential holds the key to driving transformative change and accelerating efforts towards addressing sustainable climate solutions. 

Bridging the gender gap is a central theme in your work. How does IIX contribute to reducing gender inequality, and what are some key achievements? 

At IIX, we do not view gender inequality as an isolated issue but as a complex and interconnected problem closely intertwined with other pressing global challenges, such as climate change. Here’s why. Women make up half of the world’s population, yet they disproportionately bear the adverse impacts of climate change and are often excluded from participating as solution-makers. 

In terms of global inequality, the statistics are stark. The Global North, representing only about 25 per cent of the world’s population, commands a staggering 80 per cent of the world’s wealth. In 2019, the combined wealth of the world’s billionaires exceeded that of 4.6 billion people. The current global financial system caters primarily to the interests of the top 1 per cent in the Global North.  

For the past 14 years, IIX has pursued a more equitable world. We’ve focused on building an inclusive financial system that empowers underserved women, gender minorities, and the 99 per cent in the Global South. 

Our efforts have reached 57 countries, unlocking an impressive US$288 million in private-sector capital. Importantly, our work has made a tangible positive impact on the lives of over 159 million people, and we’ve played a significant role in mitigating the emission of over 1.83 million tons of carbon. Our work actively contributes to a more just and sustainable world. 

Can you tell us about the challenges you’ve faced in promoting impact investing, particularly in the context of gender equality, and how you’ve overcome them? 
Throughout my life, I’ve confronted and battled against deeply ingrained, often unconscious biases. My journey has shown me that the success of a business and the strength of its financial instruments sometimes take a back seat when investors see a woman, particularly a woman of colour, at the helm of a company. It’s disheartening to witness how bias can introduce an element of perceived risk into the equation.  

The reality is that overt and subtle bias permeates our surroundings. Rather than succumbing to frustration and going against the system, I’ve chosen a different path: working to change the system from within and finding ways to make it work in our favour. 

One notable example of this approach was when I was raising funds for the first Women’s Livelihood Bond. I had to be pragmatic and enlist individuals that investors would be “familiar” and “comfortable” with – typically men with similar demographic profiles to most of our investors. This strategic move paid off, even if I had to step aside to allow these individuals to take the lead. I took a bullet for feminism to win the war of gender equality and create a financial system that works for the 99 per cent.  

The Orange Bond Initiative is dedicated to mobilising capital for social and environmental good. How do you measure the success of this movement, and what are your long-term goals for it? 

The Orange Bond Initiative™ is a visionary financial endeavour aimed at channelling resources toward social and environmental betterment, particularly addressing gender inequality through innovative financial mechanisms. Our assessment of success is deeply rooted in concrete and tangible outcomes that directly benefit the communities we are committed to serving. To measure our impact, we rely on a range of critical metrics, including the amount of capital we have successfully mobilised, the number of livelihoods we have positively influenced, the strategic alliances we have forged, and the reductions in carbon emissions we have achieved. 

Our long-term vision is to enable lasting change in financial investments and societal and environmental progress, marking a monumental step toward a brighter and more sustainable future.

It’s worth noting that the landscape of environmentally and socially responsible investing has evolved significantly, with a notable surge in ESG-linked bonds promoting gender equality, which recorded a remarkable $33 billion in issuances in 2022. The dedicated team at IIX is working diligently to amplify the reach and impact of Orange-labelled bonds, building on this momentum. 

Our overarching goal is ambitious: by 2030, we aim to unlock a substantial $10 billion in capital. We will direct this capital towards empowering over 100 million women, girls, and gender minorities across the globe. 

Through these concerted efforts, we aspire to create a transformative impact on gender equality and related Sustainable Development Goals (SDGs), fostering a more inclusive and equitable world for all. Our long-term vision is to enable lasting change in financial investments and societal and environmental progress, marking a monumental step toward a brighter and more sustainable future.  

Sustainable development is a global priority. How can impact investing be a catalyst for achieving the UN’s Sustainable Development Goals? 

Sustainable development is a paramount global priority, and impact investing is pivotal in catalysing progress towards the United Nations SDGs. At IIX, we are committed to leveraging impact investing as a catalyst for transformative change, focusing on SDG 5, which underscores the importance of gender equality for women, girls, and gender minorities.  

We have been channelling catalytic capital towards women-led and women-focused SMEs in the Global South for the last 14 years to advance these goals. We enable private and institutional investors to align their financial objectives with sustainable development, thus catalysing the achievement of the SDGs. This approach fosters innovation, encourages responsible business practices, and contributes to a more equitable and sustainable world. 

Empowering marginalised communities is a core objective of your work. Could you share some success stories or impactful projects that exemplify the positive change your initiatives have brought to these communities?

Our WLB™ Series has supported and enabled women and gender minorities around the globe to increase income and achieve financial independence and climate resilience. 

To give you some examples, amid the COVID-19 pandemic, the WLB™ Series supported and enabled about 12,000 women smallholder farmers to increase income and climate resilience in India and Cambodia. In addition, almost 100,000 women in Indonesia have enhanced their businesses and improved income generation ability. Capital mobilised from WLB4ClimateTM has supported 300 Indian women who have achieved financial independence and experienced increased ownership of assets. Moreover, the WLB3 proceeds have supported 16,000 Filipino women to be financially stable and resilient, allowing women entrepreneurs to grow their businesses and support their families. This is simply the tip of the iceberg; the list of women and communities we have impacted goes on.  

In the world of finance, profit often takes precedence. How do you ensure that IIX’s investments prioritise positive impacts on people and the environment over short-term gains? 

Doing good through finance is not easy but, over the past 14 years, IIX has proven that it is not just altruism but intelligent business and financial prowess that are needed to grow the impact investing space.  

We have effectively shown the “maths” of bringing social and environmental equity into investment. While investors will say they care about doing good, don’t be fooled. They care about doing good only when they know they will get their financial return.  

Thus, the onus was on us to prove that in the financial world of “risk-return”, there is a new element: impact. We educate investors on “risk-return-impact” (RRI) and how the right RRI creates a fresh, vibrant portfolio theory. If you create deep impact, measure it, verify it, then that will reduce the business’s operational risk. We have proven this over and over again with our investments, resulting in zero credit default for our investments.  

Our commitment extends beyond impact measurement; we rigorously verify it to the last mile. This unwavering dedication to due diligence ensures not only the authenticity of our impact claims but also serves as a robust risk mitigation strategy, safeguarding the interests of our investors. 

Investments guided by the risk-return-impact framework have emerged as exemplars of resilience and sustainability. What was once considered a buzzword in the financial world is rapidly transitioning into a cornerstone of every astute investor’s portfolio. This transformation underscores the growing recognition that finance can be a force for positive change, driving us toward a more prosperous and sustainable future.  

Gender equality has wide-reaching effects on economies. Could you elaborate on the ripple effect of gender equality in the context of the global economy? 

Women account for half the world’s population, and their potential to impact the global economy is tremendous. Currently, 56 per cent of all unbanked adults are women. This gap in bank account ownership between men and women persists globally, especially in developing markets. 

In addition, globally, women represent only about 40 per cent of the total workforce in the formal sectors, such as finance, manufacturing, and government. Suppose we were to build a truly inclusive economy that advances gender equality and increases women’s participation in the labour force. In that case, $13 trillion could be added to the global GDP by 2030.  

Finally, what advice would you give to individuals and organisations looking to make a meaningful impact through impact investing and promoting gender equality in their work?  

Anyone can be a defiant optimist and an agent of change. For me, it has always been about making the financial system, a big, complex, scary system, work for all. You may have a different and equally important goal, but one thing is for sure: you will face challenges that may seem impossible.  

But defiant optimism means sticking to your belief that your work is essential. It means banging on door after door until one opens. So always remember your North Star and stay resilient. We hold more power than we think! 


Executive Profile 

Durreen Shahnaz

Prof. Durreen Shahnaz is the CEO and founder of Impact Investment Exchange (IIX) and author of The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women. She was named a financial rainmaker in Forbes 50 Over 50 and focuses on women’s empowerment, environmentalism, and sustainability. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.