Strategy for Impact in the World of Sustainable Investing with Zoe Bulger

With a background in the social sector focused on supporting mission-oriented founders and organizations, Zoe Bulger, Impact Manager at Summa Equity, is all about integrating impact and ESG across the investment process and across portfolio companies, as well as the reporting side of it.

7 min read


In recent years, impact and ESG has been getting more and more heat with traditional actors entering into the space, and lots of regulatory movement as well. Impact investing, for example, has surpassed $1 trillion, with conservative estimates saying that over $18 trillion of assets are now under management related to ESG.

“There’s been a historic movement on the regulatory front. Across regions we’re seeing regulators begin to try and up the bar on what sustainability and ESG means in the financial markets.”

The political environment in the US has exposed how many people still aren’t clear what the different terms mean: what is impact? What is ESG? And on the framework and guidance side, there is much complexity because it’s a very fragmented space. But that doesn’t mean that opportunities don’t exist.

“There’s a huge opportunity and actually an advantage to this moment before we’ve arrived at a complete set of standards and rules…There’s an inspiration in the ambiguity.”

Greenwashing – a step in the right direction?

Many companies, says Reynir, launching impact funds and committing the main funds toward sustainability, have to start somewhere. And for some of them, they’re approaching it by greenwashing. And while greenwashing has negative connotations, it is still a step in the right direction, says Zoe – everyone has to start somewhere, after all.

And as the regulatory space becomes more defined, and impact investing becomes more mainstream, negative practices will eventually come out in the wash.

“My hope is that the investors, the more active owners in the private equity space, in particular, will demonstrate what it looks like to meet that highest standard of regulation, but I think it will take a few years before we get there. And it’s not a given.”

Take Summa Equity for example, says Zoe, they don’t struggle with ambiguity in the regulations because they’ve been clear from the start on how they operate. They’ve built a strong culture to support their work, and set up processes to ensure that it’s all embedded.

“We believe that if you ignore the challenges, and you don’t try to find a solution for it, you will miss both the value creation opportunities, and you will get some headwinds in areas where the world is changing.”

Article 9 of the Sustainable Financial Disclosure Regulation (SFDR)

Article 9 of the Sustainable Financial Disclosure Regulation (SFDR) has been getting a lot of attention in recent weeks as funds are downgraded from Article 9 to Article 8. But what does that mean for investors and businesses?

In 2021, the EU’s SFDR kicked into effect, and it created a shared framework to try and facilitate sustainable investment with more transparency and standardization across financial markets, requiring the categorization of financial products across different tiers of rigor around sustainability and impact.

The three classifications under the regulation:

  • Article 6 is the space for funds that don’t integrate sustainability into the investment process, or don’t want to be held accountable to having integrated sustainability.
  • Article 8 is for funds that take ESG under consideration, but don’t necessarily pursue impact or sustainability goals in and of themselves.
  • And then the final tier, the highest bar on impact, Article 9, is for financial products that have social and/or environmental objectives.

“We live in a world that is fraught with many wicked problems. And this is one way to try and shape the amount of financial flows to actually go towards the projects that we know have an impact.”

But the reality is, achieving this goal is a long way off right now, because of how the regulation is showing up and being put into action.

Downgrading funds

One of the things Zoe is seeing at the moment is the downgrading of many funds from Article 9 to Article 8, meaning rather than having impact objectives at their core, ESG is now more a consideration.

In November 2022 alone, the statistics were staggering, says Zoe – 10% of all Article 9 funds announced plans to downgrade. That’s a huge number of investors shying away from the opportunity to lead with an objective around environmental or social goals.

“There’s a real need for investors to stay the course on Article 9, it’s going to bolster the credibility of regulation. And it’s going to show that there is a way forward for private markets to be part of the solution to some of society’s wicked problems.”

To help lead the way, Summa Equity are building out a framework to try and advance where the ambiguity exists in the regulation so that it doesn’t stifle their work. They’ll then publish that framework and the key questions they’re asking in the investment process, externally, to help other investors who might be contemplating downgrading.

“Nothing has changed from our very beginning; we have invested against a set of global challenges. And so for us, we don’t have any intention of downgrading. Instead, we’re working hard to become even more consistent and explicit about how we make investments aligned with environmental and social objectives.”

The theory of change

At its most basic, says Zoe, the theory of change is the logic that gets you from the world we have today, to the aspirational world we want to live in. It’s where the rubber meets the road, and it’s how you explain the way you as an individual actor, or an individual investor or individual company, will contribute to the solution, and also how you will act in concert with those around you.

There’s two really powerful components to using theory of change as a way to think about your impact strategically, says Zoe.

  1. One is recognizing you are a single actor and that your actions depend on those around you. And it begins with identifying the low hanging fruit and longer term goals for how you might shift towards coalitions, or approaching the problem in concert with others.
  2. The second way is it can expose the gaps in the logic, the places where you might want to focus on an output.

The world needs empathy

What the world needs most right now though, says Zoe, is empathy and a willingness to work across unexpected boundaries.

“It’s so important to not lose sight of that empathy that allows us to look across and see a relationship that was perhaps transactional before. If each one of us can bring that mindset to how we move through the world, we will be well on our way to solving some of these wicked problems.”

Zoe’s advice to young people looking to make choices about how to design their life work? Trust your own instinct.

“If you’re feeling inclined to learn a new skill that isn’t directly relevant to your field, but you personally see a way in which it might help you tackle inequality, go learn that skill, or go take that job.”

Raise questions around ambiguity, says Zoe, and look for a clear path forward. It’s really not that hard, you just have to make choices.

“There’s a human tendency to want things to feel simple, to feel clear, to have a rulebook. But there is a very powerful path forward if we trust our instincts, and we ask the harder, rigorous questions, despite that ambiguity.”


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