There is no neutrality when it comes to equity

3 min read · Oct 20, 2023
New Power Labs

Many funds, foundations and government entities recognize the need to support and flow capital to equity-deserving communities. However, tangible action toward this objective is often limited to minor adjustments to existing programs, small-scale pilots or new, time-limited funding streams. In short, while equity statements and commitments are abundant - appearing on websites, through social media posts or repeated by fund managers - the hard work of doing more to understand and flow capital to equity-deserving communities is limited. 

A peer in the UK, Equality Impact Investing Project, notes that “there is no such thing as an equality “neutral” investor or investment,” and that social finance mirrors traditional finance in excluding equity-deserving communities from leadership and access to capital. The takeaway here, then, is that failing to intentionally center inclusion, instead of talking about it on the margins, actually enables further inequity. When we do not actively challenge systemic bias, oppression and racism in how capital flows, we are further enabling inequitable structures and behaviours.

Good intentions are not enough, and real socioeconomic progress stands to be gained from more intentionally including equity-deserving communities. But what are the true systematic barriers that limit investment in underfunded communities? What are the challenges for diverse entrepreneurs seeking capital? Why do funders overlook underfunded entrepreneurs? We explored these questions in our work with SVX, and we will explore some answers to these questions in future posts. 

Airing out these issues is truly a generational challenge. At the heart of this work is our belief that a competitive advantage for Canada is its diversity. Limiting capital limits potential, as the ideas and talents of equity-deserving groups are unfunded and untapped. By exposing barriers and highlighting solutions, high-quality research can bridge the gap between good intentions and transformative outcomes. 

Learn more on how to center equality in impact investing explore Equality Impact Investing Project’s report.

Equality Impact Continuum, Equality Impact Investing Project

In looking to better understand the barriers faced by equity-deserving communities in accessing capital, New Power Labs, in a joint effort with SVX, led research and compiled recommendations to reduce these barriers. In this four-part series, we unpack the importance of this work, and explore insights for those working to center inclusion. This is part one of four, focused on why we conducted this research.

Contributed by: Tom Vargas

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