'We have proven that finance for the 99% is not simply a matter of altruism; it is financially sustainable'

In her recently published memoir, The Defiant Optimist: Daring to Fight Global Inequality, Reinvent Finance, and Invest in Women, Durreen Shahnaz takes the readers into the inner workings of financial systems and ways to mould change from within. 

Shahnaz is not only the first Bangladeshi to work at Wall Street in the late 1980s but also the person to launch the world's first stock exchange for social enterprises at Impact Investment Exchange (IIX), an investment service company based in Singapore. Shahnaz founded it in 2009. 

In the book, Shahnaz takes the readers through Bangladesh, the Philippines, the United States and Singapore and also across industries — banking and finance, social enterprise, academia and even media. But she manages to stay true to her core objective: to bring change in the financial market.     

In an interview with The Business Standard, Shahnaz delves into the driving forces behind her persistence, women empowerment and inclusion through financial instruments, her success and more. 

What advice would you give women who want to enter financial markets to bring about change in terms of scaling their expectations?

It is not about scaling expectations but more about strategic action to gain the outcomes we want. As the first Bangladeshi woman on Wall Street, I had to work doubly, if not triply hard, to prove myself in a world dominated by white men from privileged backgrounds.

I am the founder of Impact Investment Exchange (IIX) and the mind behind the Women's Livelihood Bond™ (WLB™) Series, a successful impact investing company and a very successful financial product but the journey to get here was not easy. 

My gender and race were viewed as a risk. Gender bias - conscious and unconscious - is all around us. But rather than throwing in the towel and railing against the system, my approach was to change it from the inside and figure out how to make the system work for all. It takes resilience, but my work is proof that it can be done. Yes, you have to take a few bullets and you will lose some battles but remember, you are doing what you are doing to win the war for inclusion. 

You were the first Bangladeshi working on Wall Street all those years ago. Have there been more ever since? 

I do not have the exact data on this but I know through word of mouth and friends that there have been many more Bangladeshi women at Wall Street after me and that makes me proud. While we have made some progress over the past three decades, we are still far from a truly equitable Wall Street - not to mention the world. We have to go beyond making finance inclusive, and other spheres of life as well. 

This is why at IIX we have also set our sights on painting the world 'Orange'! Orange is the colour of Sustainable Development Goal 5 for gender equality – for women, girls, and gender minorities. So we are bringing gender equality and climate action together into an Orange Movement - our work with Orange Bonds, creating Orange tagging for financial products in the market and putting out Orange Seals for all businesses to show that they are practising gender equality and climate action through their operations. 

It's interesting to read how you tied in the many micro-moments of gendered bias at home to larger workplace gendered biases (from Wall Street to rural village homes in Bangladesh) – and in doing so, effectively created a comprehensive look at a woman's life – especially one who dares to break stereotypes. There's a part early on in the book where you speak up to your grandfather. Can you tell us more about that moment, what made you speak out then?

I am glad you caught the micro and macro juxtaposition of gender bias in the book! Growing up, I was determined not to have the lives of the women I saw around me so I was driven by the desire to break away from it. I often pushed back with my parents and grandparents. Yes, it wasn't pleasant but I was determined not to be put in a position that I did not want to be in. But, for me pushing back was not just for myself but for the system at large and that manifested in my work later on in life. As for the scene in the book, your readers have to read the book for a greater sense of the context. 

In the book, a subtle fluidity and duality emerge. How you shift from Wall Street, Grameen Bank, founding oneNest, Hearst Media, teaching in Singapore to founding Impact Investment Exchange (IIX) – the fluidity in how you leave space to look for new avenues and the duality of how even in those movements (be it across industries and/or countries), your core values remain steadfast and still as ever. For working women, can you share your decision-making process that results in those transitions? When did you know to leave and start anew?

All of these transitions were not planned in advance but pursued with the single-minded goal of making powerful systems such as media and finance work for everyone.  What may at times appear as an illogical journey to some when they read my book, for example, my decision to move back to Bangladesh and join the Grameen Bank when I was doing well in Morgan Stanley, was very logical to me because I was following my North Star. 

All the professional decisions in my life have always been made in pursuit of my North Star - which is the inclusion of the 99%, women and gender minorities, and making powerful systems work for them. 

Our global financial system is worth over $160 trillion—and it is managed, manoeuvred, and manipulated by 1% of the population. I have spent my life fighting this power imbalance, simply following the next path that made sense. 

This has led me to set up Impact Investment Exchange (IIX), and now we are a global pioneer in impact investing. Over the last 14 years, our work has spanned more than 53 countries, unlocked $288 million of capital, positively impacted over 159 million lives, and avoided over 1.83 million tons of carbon. 

If you stay true to your North Star and keep your wits about you, the next logical step will emerge. You just need to stay true to yourself. It doesn't matter what others think. It is your life and you need to have control over it for your own sense of purpose and happiness. 

For the readers, can you explain "The Blended Value Map" and why it's important to you?

Blended Value is a concept that was coined by Jed Emerson, a social worker turned impact investment advisor. The Blended Value Map is a concept from the book 'Impact Investing – Transforming How Money While Making a Difference' co written by Jed Emerson and Antony Bugg-Levine. Traditionally, people have seen economic value as being at odds with social and environmental impact. But the Blended Value Map is a framework that explores how value should be measured in a holistic way that combines (i) social and environmental value impact, and (ii) economic returns. Organisations - whether for-profit or non-profit - should measure their true potential performance by fully taking into account their economic, social and environmental values. 

This is an important concept to us because, at IIX, we have proven that finance for the 99% is not simply a matter of altruism; it is financially sustainable and globally transformative. It is worth noting that with over $300 million out in the market (between Impact Partners and WLB), we have never had a loss. 

We attribute this to our skill of correlating the deep impact that we create and measure through IIX Values (impact measurement tech platform) to lowering the organisation's operational risk. If you think about it, it is a no-brainer that if you create a deep positive impact in the community, your organisation will be loved and respected by the community. 

For the uninitiated, can you explain what is impact investing market? What is the current global size of this market and is it expected to continue to grow?

In a nutshell, impact investing refers to the strategy of investing with the intention of not just making profits, but also generating positive and measurable impact. It means that you can make a social and environmental difference with your investments. Thus, when you choose to invest your money you would only choose investments that create environmental or social impact. 

Although the concept has been around for decades through various religious groups and cooperative movements, the term impact investing was coined only 15 years ago. I was one of the lucky ones to be a part of the group that coined the term and put it to work. 

Impact investing has been gaining in popularity. According to the Global Impact Investment Network, the size of the worldwide impact investing market is estimated to be $1.164 trillion in 2022 and is poised to grow even more in the coming years. 

However, it is worth noting that we need to be cognizant of measurable and verifiable impacts. Along with impact investing, ESG (Environmental, Social, Governance) is also becoming a buzzword nowadays and it seems that every company is jumping onto the bandwagon. While it is exciting to see the interest, the onus is on us to ensure that this new industry is not simply paying lip service and making superficial actions. 

For the uninitiated, I would strongly recommend that you do your homework and determine which companies are truly making a difference, before jumping into the impact investment market. If you want to measure the impact of your organisation, do check out IIX's impact measurement platform, IIX Values.

What is your take on Bangladesh's impact investing market?

It is exciting to see that the impact investing market in Bangladesh is growing. There is definitely interest among investors in the country and outside to invest in companies that are creating positive social and environmental returns. Where some of these investments fall short in the measurement of the impact. We held the first impact investing gathering in Bangladesh back in 2010. It was a huge success with various ecosystem players coming forward to be a part of it. 

So, the interest is there from the ecosystem as there are wonderful companies to invest in. However, it is the regulatory challenges that give the momentum a pause.

In terms of regulations, it would definitely help if the financial market was more open about debt investments because impact investors now are more interested in debt investment than equity as the 'exit' for equity investments are few and far between. 

In addition to regulatory changes, the market also needs education about the impact investing sector – how it works, the learnings from it etc. The Bangladesh market needs more education and exposure to what works and doesn't work in this space. There is a lot of capital to be tapped into and we just need to get the Bangladesh market ready for it. This is an important exercise not only for the country's sustainable growth but also for maturing the financial markets as the country becomes a middle-income country soon. 

You seamlessly take the readers from Dhaka to Manila to New York City. How crucial would you say exposure to diverse cultures had been for you, in terms of personal growth? How can women in rural Bangladesh who do not have access to opportunities to travel, gain exposure to cultural diversity?

I am indeed very lucky to have had the opportunity to live a global life. I have had experiences that even my own sisters did not have. My global experiences provided me with a unique lens through which I could see the world in a different context. My global exposure allowed me to understand and navigate both the East and the West as an insider with deep life experiences in both, I used my advantage to pursue inclusion for the underserved 99% and Global South in the systems that control our lives.

As a woman from Bangladesh, I consider myself very lucky to have had the opportunity to operate in the global playing field. While more Bangladeshi girls are given access to education nowadays, we are still far from an equal system that allows women to break out of their constricted life choices. However, if we change the financial system to make it more inclusive as we are doing in my company at Impact Investment Exchange (IIX), women can be a part of the global financial system even while sitting in remote parts of the country. 

We need to alter regulations and use effective technology to connect the women in the last mile in Bangladesh to the Wall Streets of the world. We are doing that in other countries so it will hopefully be just a matter of time before we can do the same in Bangladesh. 

Your time at Smith College started at the age of 17, and essentially, marked the start of your academic and professional career. By 20 you were fielding job offers at investment banks in New York. It's easy to realise your self-driven, early start. What would you say to women who perhaps could not or did not have an early start in chasing their life goals — or even realising it — is there a right time to start? What advice would you give women starting late in life? 

It is never too late to start pursuing your dreams. Age is just a number, right? What is important is to embrace one's vision, uniqueness, passion, and personal experiences. 

I would say to all the girls and women out there, embrace your whole self and think of yourself in the global context. The world is ready for you, so take your place. Join forces and collaborate; allies will help you when hurdles emerge — as they do, inevitably. 

Remain creative, resilient, and persistent; hurdles direct your path to success. Broaden your mind to see the learning in all opportunities. Harmonize your personal values with professional endeavours, and do all that while following your North Star. Passion, resilience, and common sense will get you everywhere. 

It was also interesting to come across syntax like "curriculum of womanhood" – which you strongly rejected. And then to come across how it is to be a women entrepreneur in a man's world — which, later in the book, you reiterated saying it's difficult to "overcome the reality that business in 2002 still remained a man's world — and a white man's world." How far have we come in the past two decades? To what extent has it become easier (or remained the same) for women to become entrepreneurs? What more can be done in Bangladesh to help improve the business climate and access for women? Any specific suggestions?

The world is a very different place now from when I started my career in investment banking in New York 34 years ago. While there is more awareness around gender and minority representation, we are still far from seeing a world where gender equality, diversity and inclusion are the norm. 

Few organisations make a serious effort to go beyond tokenism, often recruiting (and playing it up in their marketing) to give appearances of racial or gender equality rather than as a concerted firm-wide effort to actively reshape the profiles of key decision-makers to reflect real diversity and inclusion. It is also not just about hiring and embracing women and minorities, it is about the majority accepting them as equals and an essential part of the institutional, sectoral and societal growth.

For true gender equality, we need to have two things. First, we need to recognise that gender inequality is an issue that does not just affect women; it is a global issue that has negative repercussions on everyone - men, women and gender minorities. Second, we need to recognise that women as a group are not homogenous; they come from different cultural backgrounds, carry different societal baggage, and are in vastly different economic and financial situations. 

Think about it - would the needs, perspectives and priorities of a woman from the Global North be similar to those of the Global South? Of course not. Only when we recognise all women and minorities as solution-makers and empower them to contribute, can we start paving the way for an equitable world.

As for Bangladesh, it will be beneficial for society as a whole to consciously embrace and measure the benefits of gender equality. We are already a leader in South Asia in terms of women empowerment. We can push it further and become a global leader only if we make gender equality and make it a national agenda.

"Graduate schools nor the World Bank had answers for me" – in regards to serving the 99% of the population. Now you have found the answer in your IIX company. For those also interested in looking for the same answers in the financial markets, where would you guide them to gain experience and get answers?

Global inequality is a complex yet pervasive issue. In fact, the Global North has about 25% of the world's people but makes 80% of the world's money. To give you a sense of the extent of this power imbalance: in 2019, the world's billionaires held more wealth than 4.6 billion people. 

Serving 99% of the population and correcting the power imbalance requires persistence and creativity. There is no cookie-cutter path or answer for everyone. Firstly, understand your North Star, your purpose which will keep you going when times get tough and it seems easier to give up. Secondly, understand yourself and more importantly - what knowledge and experiences you lack to bring about change. Third, be prepared to work very hard and make sacrifices; do not expect gratitude nor acknowledgement for your work, you should derive happiness from seeing that the world is a slightly better place. 

Lastly, if something fails, see it as a lesson learned and pivot from it. If you have all these in place, your next step will emerge. 

For our readers, can you tell us about the Woman's Livelihood Bond? Its current status, how can it be accessed, future plans for expansion or more coverage?

IIX's award-winning Women's Livelihood Bond™ (WLB™) Series is a series of innovative gender-lens blended financial products that empower women and girls across a multi-country and multi-sector portfolio. The WLB™ Series bonds support 15 of the 17 United Nations Sustainable Development Goals (UN SDGs).

To date, we have mobilised more than $128 million, impacting 1.3 million women and girls across Asia and Africa with five issuances. We will launch the sixth issuance of $100 million in Q4 of 2023. 

With five issuances since 2017, I am proud to say that we have not had a single default - even throughout the Covid-19 pandemic. We have successfully created this new financial instrument that delivers stable returns and sustainable impact to investors. 

In the book you asked "Why do humans fundamentally fear difference, whether people or ideas?" — have you found the answer to this?

It is human nature to fear what we do not understand. We also make unconscious judgments very quickly. So as mavericks, what we can do is to bridge the gap of knowledge and empathy in any way possible. 

In finance, it meant that I had to enlist men to pitch the Women's Livelihood Bonds to investors, who would subconsciously be more biased against the idea of such an innovative financial instrument and also the name 'women's livelihood.'

So, it is a process to turn people's biases around. You first go with what is palatable for them then slowly make the change from within. Change doesn't happen overnight but it does happen. Look at our Women's Livelihood Bond now, the sixth one is going out in the market now and the market is clamouring for it. It is no longer an issue of who sells the bond. Investors are thrilled to be a part of the 'cool bond that is changing the world.'

Confidence is vital and does not necessarily come easy for girls and women. What would you say to them to acquire or build self-confidence?

You hold more power and are capable of more than you think. Stay true to your purpose and goals in life, and do not waver just because people disagree or do not believe in you. Most importantly, don't be scared of 'no.' No is just a two-letter word that can be overtaken by a more powerful 3 letter word – yes!

Between your work and family, when did you find the time to write and put this book together? Do you maintain journals? What has been your writing process behind The Defiant Optimist? Also, are you planning to publish books in the future?

It took me four years to write The Defiant Optimist. I was very disciplined about writing the book. I had a full-time job running IIX, being a mother to two daughters who are very independent but still needed me, and I have an elderly father in Bangladesh whom I had to take care of remotely and frequently in person. So, like most people of my age, my plate was full.

But even in that hectic schedule, I would carve out an hour or two at night around 11 pm or so to write. I would be yawning but I would still write. 

I would also write on the weekends. I would close myself up in my library, blast David Bowie, REM, and even Ornob, and just write for 6/7 hours in a stretch. The rule in the house was unless someone was dying, nobody could disturb me. I took on writing the book like any other project, I was organised and determined and it got done. It was a lot of work but it was so worth it! I hope to write another book in the future. 

Has your family read the book? What had been their reaction?

Yes. The book has been a great source of self-reflection for my family. My husband and daughters loved it. For my daughters, once they read the book, they had a greater appreciation of their heritage. My sisters were very moved by it. It made them think back to their lives growing up in Dhaka and reflect on where they could have pushed back more for their own growth and freedom. So, the book has made my family members reflect on the stories in a very personal way. 

This has been the reaction for most readers in general. I have been told countless times that people felt that they were reading about their own lives when they read the book. For me as a writer, that is the biggest compliment I can get. 

If the reader is to take away one lesson or impression from this book, what would you like it to be?

Anyone can be a defiant optimist. The pursuit of your North Star will be a difficult and sometimes lonely journey, but if you dare to imagine a better world, dreams do come true. My story is proof of that.