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Meredith Lorenz Heimburger, Head of Impact Investing, Global Endowment Management

Meredith Lorenz Heimburger, Head of Impact Investing, Global Endowment Management


Impact investing has changed quite a bit since I joined Global Endowment Management (GEM) in 2012. The changes I have personally seen align with and reflect the changes we’ve seen in the industry more broadly.  

When I joined GEM, whether you called it sustainable investing, impact investing, mission-aligned investing, or values-aligned investing – the field was growing.

Nobody quite knew what was going to become of it: would it become mainstream? How would client demand grow and evolve? How much would the investment opportunity set expand? Would it be possible to build portfolios incorporating these opportunities? There were a lot of unknowns. 

Prior to 2012, I had been working for seven years in the non-profit sector, specifically in education. In my nonprofit work, I saw the range of challenges facing communities—from educational inequity, to a healthcare system that does not serve everyone equally or provide the same level of access, to a lack of jobs and affordable housing, challenges and inequity are everywere.   

At the time, these systemic challenges were mainly addressed through philanthropy. However, if we look at where capital is concentrated, only a small percentage is going towards grants and operations for nonprofit organizations. The vast majority is in investment capital markets, so there began to be a shift in the conversation that now asked: “How do we actually leverage capital markets to transform these larger systems?” We observed a similar shift at GEM around that time as well, as a number our clients also began to recognize the role of investment markets in addressing these societal issues, and increasingly demanded more scalable solutions. 

In 2018, after five years of researching, attending conferences, and integrating into the impact ecosystem, we began proactively making positive impact investments in alignment with our impact-conscious clients’ portfolio objectives, while simultaneously seeking to deliver the returns that they needed. We implemented an Impact Measurement and Management (IMM) system that gives us real confidence in our ability to leverage financial markets to generate positive impact for people and the planet. You can read more about our IMM practices here.


There are a few different challenges that I’ve observed. A primary barrier to entry, albeit one that I think can be easier to overcome, is reaching consensus with those in charge of decision-making about what the organisation wants to achieve with its capital. Is it market rate return investing while generating positive returns? Is it impact-first investing?

The challenge is to get a board of directors, a foundation board, a family, or a group of family offices to come together to decide what strategy and impact they want to realize. The support in taking that first step is crucial. 

Another challenge is that impact investing is hard! Consider how many non-impact investments have historically underperformed in the market, and then consider that impact investments carry an additional set of expectations that they must generate not only a positive return but also a positive impact. All of this is made more difficult still by the fact that the marketplace is currently quite unpredictable. 

Further, there hasn't historically been very much regulation on what could call itself an impact investment or an ESG investment, so it can also be really difficult to do well in that regard. At GEM, we have integrated impact into our existing traditional investment team, because we wanted to maintain a standard evaluation and implementation process across all of our investments. We overlay our financial and risk analysis with a rigorous impact evaluation and judgment to determine whether the investment can deliver the kinds of returns and the kind of impact that we want to achieve, while ensuring that we have a measurable way of understanding these factors.  


I think the industry is missing high impact public market investments. We're at a place today where we see hundreds of funds every year in private markets that are addressing areas of impact—not just avoiding harm, but truly delivering positive impact outcomes for people and the planet, changing the way systems work, and tackling some of these entrenched societal challenges.

In public markets, we might see five of those a year that are competitive with traditional public equity from a returns perspective.

The vast majority that we see in public markets are largely avoiding harm or using an ESG lens to carve out an area of the market.  

In our experience, we’ve found that public markets have a narrower set of opportunities to deliver the kind of high impact that our clients desire. That's challenging because public equity plays such an important role in the portfolio, and if the best investments we’re finding are merely avoiding harm or reaching the low-hanging fruit of impact, it makes it hard to build really high impact diversified portfolios the way that we would like to. Over the next five to ten years, I'm hoping that the opportunity set will expand and grow.


It’s not a cliché but rather a pet peeve, which is the idea that “ESG factors lead directly to positive impact. Today, I think a lot of investors know the difference between ESG and impact, but there are still many people, for example, who made their money in other industries besides finance who suddenly have money to invest and want to do so in a way that is aligned with their values. Those people may be encouraged to invest in an ESG portfolio. However, these investors may lack the sophistication to recognize that ESG is really a risk mitigation strategy. It's really about avoiding some of the negative externalities related to environmental, social, and governance issues—it is not about investing in alignment with deeply-held values, nor about driving change for people, the planet, and communities.

We are somehow in this polarized situation where impact investing is either treated as something that is very easy (because it is being conflated with ESG funds) or as something that is so extremely complicated that investors might as well give up. We need to reach an in-between, where we can have real conversations about what is available to investors who want to invest according to their values, especially if they are willing to take some risks. The opportunities are out there, but we are missing that piece.