Going beyond Governance: An interview with Pooja Eppanapally

Women of the World Endowment (WoWE) was created with a bold vision—build a $5B endowment, over the next 10 years, to centralise the role of women as economic, environmental, and social changemakers who are creating a high growth future. Investment Manager Pooja Eppanapally spoke to us about mainstreaming gender finance, evolving definitions, and their approach to impact and measurement. 

What have you noticed around gender lens investing in the last couple of years?

The investment opportunity at the intersection of gender and governance is clearly defined, evidenced by the numerous “women in leadership” investment products and opportunities in the public and private markets. However, we need to more clearly define the intersection of gender and the “E” and “S” in ESG. Although the conversation is at a nascent stage, there has been progress made over the past few years. The conversation just needs to continue so that mainstream investors can understand what the opportunity is.

I've observed numerous funds aligning to a common definition of gender focused investing. For example, some funds are adopting the 2X Challenge criteria. It’s encouraging to see entities like this bringing more clarity to the field.

There is also increased regulation and legislation with respect to ESG, especially in the public markets. For example, NASDAQ is mandating all newly listed companies to have at least two diverse board members, and the SEC has proposed mandatory climate disclosures. We're shifting towards more regulation around reporting, and I foresee this extending to gender diversity as well.

Are there any other sectors or themes you’ve integrated?

Women of the World Endowment invests at the intersection of gender and ESG. We identify opportunities to invest in and through women who are solving the world's most pressing challenges, including climate change, healthcare access, educational equity, economic opportunity and racial equality.

The intersection of racial and gender diversity has come to the forefront of my investment work, especially in light of the racial reckoning in the US. At WoWE, we aim to allocate capital to first-time fund managers and entrepreneurs that are women and racial minorities.

What do you think is needed to unlock more gender lens capital at a big institutional level?

We need male allies to support investing in and through women. Ninety-eight percent of global investment capital is managed by men. There is a lack of education at the institutional level regarding the financial benefits of investing in gender diversity. An ocean of data exists supporting the thesis that investing in gender diverse teams is financially wise. Gender-focused investors have been generating strong financial returns, building a defensible proof point. We need to get this financial data in front of the institutional investor community and speak their language.

The next step is to remove the friction restraining investors from allocating to gender-focused assets by introducing the right investment tools. Platforms like Ethos ESG, As You Sow, and ExecuShe provide transparency around gender and diversity data to help investors make investment decisions that are aligned with their values and funnel more capital into gender-focused investing. I believe adoption of these tools will lower the barrier and promote male allyship.

How are you measuring the impact or success of your investments?

We built a three-tier framework factoring both quantitative and qualitative impact data across all of our investments. The first tier is diversity KPIs, such as the percentage of women in leadership, on boards, and in the workforce. We ask our portfolio companies to provide annual reports, and we look at the trends over time. We use our position as an investor to influence our portfolio companies and funds to move in the right direction. This starts with just being able to measure diversity and having the data on hand.

The second tier consists of investment-specific metrics. As each investment is different, we focus on measuring the KPIs most relevant and material to the specific problem the investment aims to address.

Lastly, we look at qualitative impact data to better measure outcomes. Through case studies, we answer the question of how an investee is incorporating gender considerations holistically across their internal and external operations, including product development, marketing strategy, and internal hiring practices.

Which investment are you really proud of?

We invested in a venture capital firm called Urban Innovation Fund, which fits well within WoWE’s gender intersectional investment strategy. It's led by two female GPs, who invest in women and minority-led companies that are working towards solving urban challenges. Beyond diversity outcomes, the Fund is also delivering strong social impact outcomes across a wide range of domains, including climate change mitigation, financial inclusion, education, and beyond. Learn more about our investments here.

How do you see the field evolving in the next 18 months?

One trend that stands out to me is shareholder activism advocating for gender equity. Arjuna Capital recently filed a resolution that prompted Disney to disclose gender pay gaps. Given the recent news around abortion rights in the US, it’s possible that corporations will face pressure from investors to be more proactive about ensuring optimal healthcare benefits for female employees. Activism is going to continue to play an important role in bringing gender to the forefront of these public corporations and holding them accountable.

You can reach Pooja at pooja@wowendowment.org or on LinkedIn