February 2, 2021

In the world, there is a small, but mighty, cadre of people working to innovate in finance. They may not be doing deals every day, but they are shaping the activity, the ideas and the connections between people that form the field. These leaders are braving new territory, standing in the face of power and imagining new possibilities for how finance can contribute to a better world. They regularly have doors closed as they seek to advance ideas that challenge prevailing norms.

Field builders also sit as arbiters of change. They watch to see when to speak out and when to tone down the argument to make it palatable within the status quo. They choose to couch an argument in the business case only and not in justice. They set tables at conferences which leave out those impacted by the investments in order to ensure that the asset holders feel comfortable with their peers. These pragmatic strategies are not innately exploitative. In context, they might be the right maneuver for the field builder to get a foot in the door, to engage allies needed for the long term, or to survive to fight another day. As innovators in finance, these field builders are working to take on one of the most powerful systems in the world. It is not always viable to push hard. How do we determine if these are rationalizations or are instead astute calculations and maneuvers?

The research behind this paper examined power dynamics in the development of two fields, climate finance and gender lens investing. It provides a deeper analysis of the dynamics that have shaped the development of these fields and asks whether the fields have been disruptive enough. Developing field building strategies requires ongoing analysis of power dynamics in the systems that the field touches. How ideas develop and how fields advance are not neutral. Changing systems requires operating within the targeted system and engaging with the power dynamics of that system. There is no way to avoid this fully. To operate within the system and create changes requires engaging with the logic of the system itself and what drives it.

The thesis of this paper is that the awareness of power dynamics will lead to a more intentional design of field building efforts within gender lens investing and climate finance, thereby ensuring that these efforts are addressing and not needlessly calcifying and replicating existing dynamics and inequities in systems of finance.

The paper was funded through support from the Wallace Global Fund and UNICEF in response to collective interest in the development of fields seeking to address social and environmental inequities through alternative approaches to investing. In many ways, this paper serves as a reflection on the “State of the Field of Gender Lens Investing” that Criterion published in 2015, also funded by Wallace Global Fund. It is written for those actively building fields and those who fund that work: the foundation program officers who are or could be funding field building, the government actors seeking to accelerate the growth of the fields, fund managers making the case to investors, asset owners pushing for better practice and the research organizations building the data base. The research approach looked at patterns in historical moments through secondary sources and interviews in order to compare dynamics in the two fields, gender lens investing and climate finance. While research findings likely have broader implications, they are contextually grounded within systems of finance.

The framework outlined in this paper is intended to facilitate analysis of power in context and to increase the willingness of field builders (and those who support them) to disrupt systems of power more boldly in order to advance goals of justice and equity. It illuminates the power dynamics, the norms, biases, and privileges that shape how fields develop, including:

• Cultural norms inform how value is assigned within systems of finance. Operating within those norms allows one to make the business case for investing in women or to claim that climate change is a systemic risk. Analysis of those norms informs a choice to work within them or challenge them.

• Leaders in finance and in the political realm have used their signaling legitimacy within the field. Al Gore provided global visibility to climate finance; Christine Lagarde conveyed gravitas to gender lens investing. Relying on existing structures of authority to provide legitimacy is a choice that also reinforces existing stereotypes of leadership.

• Experts have the power to name what knowledge matters, what data is legitimate, what complexity is tolerated. Without an intentional effort to validate unorthodox expertise and bridge across disparate knowledge, a reliance on experts reinforces privileged.

• Connections between people and organizations formed through field building create new alignment between people and organizations, but they also limit participation. How the maps and the definitions of climate finance or gender lens investing are drawn create boundaries which reinforce inclusion or exclusion.

• Structures within fields solidify control by providing coordination, governance, standards and incentives. How these structures operate and who operates them inform the power dynamics at play in the field.

• Resourcing patterns in fields reinforce privilege, as they do in many types of systems. The funder gravitates toward theories of change that reflect their own, and funding often moves in more significant volume to those who most mimic the status quo. Reflective action starts with awareness and a sustained mapping of how power operates in fields. The approach is to determine the power available to act and then assess the potential dangers or risks of that action against potential results. Since systems change takes time, it is important to name metrics and identify indicators that will provide feedback along the way. The value of the power analysis is in shaping strategy, examining theories of change, and determining where resources go.

In the end, this paper is a call to action for those building fields to use their power to disrupt systems of power wherever possible.

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