The following is an interview with Kristin Hull of Nia Impact Capital, a trailblazing women-led impact investment firm headquartered in Oakland, California. As founder and Chief Investment Officer (CIO) of Nia, Kristin has pioneered a unique approach to investment, focusing on companies that are advancing solutions for a healthy climate and a more just, equitable economy.
Nia has been a corporate sponsor of Pachamama Alliance since 2015, contributing each year to support Pachamama Alliance’s mission and work around environmental sustainability and social justice.
Historically, the role of corporations has been to maximize shareholder value and the sole goal of investors has been to secure a return on investment.
But nowadays, the conversation is a little different.
Corporate responsibility and ESG (environmental, social, and governance) considerations have become key points of discussion—not just within the social and environmental movement, but also within the financial sector. How corporations do business, including the impact they have on people and the planet, is just as important as stock price to a growing number of investors.
Kristin Hull, founder and CIO of Nia Impact Capital, has been at the forefront of reshaping the conversation around the role of public markets, including how impact investing can catalyze positive change. She and the team at Nia have carved a distinctive niche, challenging conventional norms while offering conscious investors a unique opportunity to align their investments with their values.
In the following conversation, Kristin shares her thoughts on the current state of the global economic system, and delves into Nia’s visionary strategies for redefining the role of finance to be in service of a regenerative, just, and inclusive economy.
This interview has been edited for length and clarity.
Shi Woo Ji: You started getting involved with impact investing in 2007 when impact investing and the role companies play in the world beyond maximizing shareholder value were not necessarily talked about as much as they are today. What inspired you to get involved in impact investing and eventually found Nia? Were there any challenges in doing so? And how has the conversation around public markets and corporate responsibility changed since then?
Kristin Hull: So in 2007, I was doing impact investing largely for family offices and for foundations, and doing some consulting. And it was really in that time of investing in solutions needed for people and planet that I saw the need to go back into public equity. That same year, I actually got rid of all of my public equities because I didn't see anything in Wall Street that resonated. And it wasn't that I was predicting the Great Financial Crisis. It was more on a gut level I wanted to have my assets be more relational rather than transactional. And Wall Street really was representing the transactional piece of that.
So that's what inspired me to found Nia, to provide for others a way to invest in the stock market, in public equities, in solutions-focused companies, companies that have diversity in leadership, and then also really be about the relationships. Nia means intention and purpose, so [we help] people invest their money with intention and purpose.
And then this next part of the question, as far as the conversation around public markets [goes], the words ESG—environment, social, governance—didn't exist at that time; we are really standing on the [shoulders of those who] started removing companies from their portfolio based on what they deemed as “sin stocks.” To this day, sin stocks is actually a used concept. It usually represents tobacco, firearms, alcohol—products and services that could be doing harm. Oftentimes, we'll now put fossil fuels into that kind of category.
There wasn't really a place where you could go to just focus on the solutions in public equities. That was more of a private equity play, and we wanted to bring that into public markets. So I think those are all of the inspirations and how things have changed a little bit. We [now] have vocabulary to talk about what does it mean to be a stakeholder and to have corporate responsibility.
We don't have the common definitions that we need, and yet people are starting to talk about it. We're peeling off some of the layers to get into what kind of economy do we need, knowing that investors have the power to create an economy that works for everybody.
Shi Woo Ji: And speaking of an economy that works for everybody, I'm really struck by Nia's mission, which is to invest in public markets to power the transition to a regenerative, just, and inclusive economy. And I think in that statement is this underlying understanding that our current global economy is in need of a significant shift in how it operates and who it really serves. How would you describe our current global economy, and how can impact investing challenge the status quo and generate the shift that's needed?
Kristin Hull: In a short answer, we get the economy that we invest into. Most investors don't feel that connection. We don't feel connected to our portfolio, and there's a lot of reasons for that. The history of investing in the United States actually plays into this.
When the first settlers or pilgrims were coming over here, they weren't 100% this is where they were going [to settle]. And they oftentimes held assets—homes, businesses—in the U.K. and other places. And so they were straddling between two worlds and once they were [in the U.S.], they would go back and check on their family, their [assets]. And this was all, of course, on a boat, on a ship with no communications, no cell phones. So they [eventually] let financial advisors or trustees who they trusted to take care of their assets [back home] with almost no transparency and almost no communication.
And I mention that because that's the history of financial and wealth management in the U.S., and it largely continues to this day. We have very little transparency into what we own and not enough communication about what's actually happening. And that has served to distance most of us from what we invest in. And then what happened in the ‘60s and ‘70s [was] the invention of index funds where we now own a little bit of everything in the market. But [with] 500 companies, [with] 2,000 companies—financial advisors don't know the names of the companies [and] individual investors certainly can't know what they own.
So that's the other shift that we are trying to make: allowing investors to have a concentrated portfolio of companies they can be proud of, where products and services [and] the revenue are actually part of the transition to a sustainable, just, inclusive economy. So the global economy is, I would say, running almost on autopilot because investors who have such incredible power don't really know what they own. We're not really making the decisions that would allow us to have the economy that we want.
Shi Woo Ji: I love that answer. What would you say to those who are skeptical about whether social and environmental benefits can actually be achieved without sacrificing ROI (return on investment) or to those who are skeptical about whether ROI can be achieved without sacrificing people and the environment?
Kristin Hull: It's a big question, and I would say whoever is holding onto the status quo has done a good job painting it as black and white [as] “You can either make money or you can do good, and those two don't meet.” And so whoever came up with that, this current economy is clearly working for them and they don't want to see change. And yet, when we look at companies over time that have done well, they've been really efficient with their resources and then also really effective with their people management.
Of course, there is research that backs up how diverse teams perform better. And so, being thoughtful about nurturing and growing a thoughtful team is part of the answer. And then really looking at a company's products and services, how they make their money.
And then something that we're going to be seeing moving forward that I think will help [bridge ROI with social and environmental benefits] is incorporating the circular economy. So rather than throwing something away, instead of paying for it to be waste, there are some examples of companies working together [so] their waste product [can] be incorporated into some new tool. I think that we're going to see that the ability to collaborate and to partner is going to be more of a needed skill in the economy as we move forward, as we look to build more circular business models.
Shi Woo Ji: Very well said. I love that Nia weaves gender and racial equity criteria throughout its investment process. Can you say more about how you and your team go about doing this, and why you chose those two focuses in particular?
Kristin Hull: So we start with our six solution themes and what we're really doing there is asking what is needed for people and planet not only to survive but to thrive together. And then we ask in each of our criteria—whether it's healthcare or communications or education or sustainable planet—how will that affect women and people of color?
We also, of course, look at the current diversity in leadership, and we want to see women and people of color in leadership. And particularly in the U.S., as our demographics shift, we do need to have representation [from those] who are buying the products and services. We need to have those people designing them. And that's certainly coming into play with AI. As AI becomes a tool that is used by so many, we need to have a very diverse set of users at that designing table.
We are looking for policies and procedures that allow women and people of color to advance in their careers because we want to see our companies attracting and retaining top talent and [having] the policies and practices that will allow an inclusive workplace to develop and grow.
Shi Woo Ji: Thank you for that. In addition to investing in companies that further gender and racial equity, you also invest in companies implementing climate solutions. I think one concern in the environmental movement—and actually, increasingly in the general public—is the tendency for companies to engage in greenwashing and obscure or not accurately portray the impact they're having in the world. How do you and your team ensure that you're investing in companies that not only align with your values and mission but are actually making a meaningful impact for the planet?
Kristin Hull: That's a great question, and greenwashing is real. Absolutely. We start, as I mentioned earlier, with products and services, the actual revenue. We're looking at the revenue and seeing where it's coming from. And so we need to see that the revenue is coming from one or more of our six solution themes. We're invested in solar companies, in efficiency companies, in wind turbine companies. By definition, they're part of the solution.
But one thing that's interesting is that when I started in public equities in 2012, we would just look on a website and if they had a nod to sustainability, we would note that down as something that we wanted to follow up on. And now, if you look at any website, they're literally green. They have plants on them, and the word sustainability is all over the place regardless of what that company is doing. Greenwashing is happening literally across all the websites and company materials. So if you're not looking at how the company is actually baked and what their ethos is, then you could be just getting a beautiful website. One of the things we [see] is when there are more women in leadership, particularly on the board, topics of ESG come up more often.
And then we also ask all of our companies to report on their Paris alignment, their goals, their scope one, two, and three emissions. And then also, their strategies to meet their goals. Because setting a target of being carbon-neutral in 2050—that's almost like not even setting a target. They get to check the box, they get to put it on their website. That's not a meaningful target. We want to make sure that it's in a timeline that actually matters for our planet that will actually be effective. And then also that there's a strategy and a plan in place to meet it, because setting a target is one thing, but actually taking action is another.
Shi Woo Ji: I love that. One thing that I've heard in your response just now and in some of your other responses is that Nia gets very involved in the companies you invest in, and you do a thorough job of learning everything—about how they operate, who they operate for, who they’re operated by—to ensure they are making the impact that you want to see in the world. I'm really struck by not only the rigorous standards you seem to apply but also just how involved you are every step of the way.
Kristin Hull: I appreciate that. And there's no perfect company. All of our companies—Nia included—we all have room for improvement. And yet, investor voice is real—it really makes a difference.
Shi Woo Ji: Earlier, you mentioned the six solution themes, and I read on your website that you chose these six because you see them as key ways we can address global systemic risks, including those posed by the climate crisis. Can you say more about the risks that the climate crisis poses for the global financial system and why it's so crucial for investors everywhere to support robust climate justice solutions?
Kristin Hull: I love talking about this one. There's two ways to look at it. Is climate change going to affect your current portfolio? Absolutely. One of the industries that's easy to point out is the insurance industry, particularly living in California where there's counties that have a history of fire where you cannot get home insurance because that industry has been so severely impacted [by] floods, fires, etc.
That's one way insurance companies are going to be losing money during this time—and that's just California. We're not talking about all the hurricanes, flooding, all that’s happening in Florida and other places. That's literally climate coming at your portfolio. But then there's ways where—not necessarily yet in this country where we still have subsidies for fossil fuels—[but] across Europe, the [energy] transition is on. That's growing in our country too, where especially the younger people are saying no to fossil fuels. So that's one way to think about it.
[Another way is] when our economy does shift and as it moves in this transition, you want to be poised to take advantage of some of the growth that will happen, whether it's electric vehicles, whether it's public transportation trains that are hyper-efficient. Eco and affordable housing is [also] going to be really important. Other areas that will be affected are real estate. People have become climate refugees. Also, pricing of homes as well as office buildings has completely changed and will continue to change as certain areas become more and less desirable to live. Those are a couple of examples.
And then, [with] carbon emissions, companies are going to be judged at some point and the SEC will have some sort of sustainability rules about disclosures on carbon. They're not there yet, but they're right in the works. And so that would be a risk to have, for example, a company that has a large carbon footprint once we start actually noticing that that does belong on the balance sheet. Up until now, companies have really gotten away with their pollution. There's going to come a time where we start holding corporations accountable for everything they're producing—the waste, the carbon. That will become a risk for investors.
Shi Woo Ji: Absolutely. What has been the most challenging aspect of this work and what has been the most rewarding?
Kristin Hull: Well, changing the way we do investing is swimming upstream. Our current system, as we've spoken about, the status quo is strong and the patriarchy is really strong. And so working in the investment industry, looking to empower women, young people, people of color that have literally been left out of the conversation for so long—that's both challenging and it's also rewarding.
Because making investment products that are easier to understand, where they're more relation-based, that women and people of color can relate to because they literally have women in leadership in every single company—no one's had options to invest that way before. We know that when women and people of color are investing, they're going to invest for themselves and their communities, and that's going to help people and planet largely. And that part is really rewarding.
Shi Woo Ji: What are you most looking forward to or excited about as you think about Nia's work in the new year and beyond?
Kristin Hull: I think the work that we do with our companies is exciting. A lot of the change happens behind the scenes, one conversation at a time. And yet, building those relationships with our companies, we do seek to have a positive [impact] with each one of our companies. So helping them increase their policies and practices for diversity, equity, inclusion, and then also helping them be the most sustainable that they can, is exciting for us.
The other piece that we always look forward to at Nia are our Change the Face of Finance interns. We love sharing what we're doing and involving young people because young people really do bring us hope, and they’re always fun for us to work with. So that's this year. And then beyond that, I look forward to the shift in our economy. I look forward to investors really owning that their investments are tied to our economy and that we do get the economy we invest into. I look forward to empowering more investors to invest with their values for the world that they want to see.
