In conversation with Nadia Nikolova, CEO of responsAbility

That shift from intention to economics reflects how significantly impact investing has matured. As the industry has evolved, how do you preserve the expertise that helped make that transition possible in the first place?  

That is the real challenge. Scale matters, but expertise matters even more. In emerging markets especially, successful investing requires local presence and local knowledge. You need people on the ground who understand culture, regulation, risk and changing conditions because you'll often hear that something is happening before you see it in the numbers. That's very difficult to replicate from London or New York. That's one of the reasons I believe specialist expertise remains so important in emerging markets.  

It's also important because we still talk about emerging markets as though they're a single investment story. They aren't. The opportunities in Latin America may centre on agriculture and natural capital, while in parts of Asia the focus is energy, infrastructure and population growth. The label is useful shorthand, but the opportunities themselves are local and contextual.  

That shift from intention to economics reflects how significantly impact investing has matured. As the industry has evolved, how do you preserve the expertise that helped make that transition possible in the first place?  

That is the real challenge. Scale matters, but expertise matters even more. In emerging markets especially, successful investing requires local presence and local knowledge. You need people on the ground who understand culture, regulation, risk and changing conditions because you'll often hear that something is happening before you see it in the numbers. That's very difficult to replicate from London or New York. That's one of the reasons I believe specialist expertise remains so important in emerging markets.  

It's also important because we still talk about emerging markets as though they're a single investment story. They aren't. The opportunities in Latin America may centre on agriculture and natural capital, while in parts of Asia the focus is energy, infrastructure and population growth. The label is useful shorthand, but the opportunities themselves are local and contextual.  

Much of your answer comes back to understanding what's actually happening on the ground rather than relying on broad assumptions. Yet much of the public debate around impact investing remains focused on terminology. Has the industry become too distracted by labels?  

There's certainly been a lot of noise around ESG. I have always been a fan of understanding the value ESG and impact lens brings to the investment, rather than the label. In private markets, ESG and impact practices ultimately come down to value creation and risk management. If you invest in a business with weak governance or poor operating practices, you're more likely to lose money. It's as simple as that.

What I'm seeing is a shift away from labels and towards more practical questions. How is a business creating value? How is the manager engaging with it? What is actually changing as a result?

We worked with one agricultural business where improving conditions for seasonal workers led to better outcomes for employees while also strengthening the business. Retention improved, productivity increased and financial performance followed.

Over time, I think we'll talk less about ESG as a distinct category because material ESG considerations will increasingly become part of good investing. At the same time, not every investment in a climate or social solution should automatically be considered impact investing. Intentionality and investor contribution still matter.  

If the conversation is moving away from labels and towards value creation, the next challenge is translating that into investment decisions. What would help move institutional investors from interest to action?  

I actually think the answer is simpler than people assume. One of the most powerful things investors can do is signal intent.

The Dutch pension industry is a good example. By making clear that it wanted exposure to impact investments, it encouraged asset managers to build expertise and new strategies to emerge. Demand created supply. Importantly, the objective was not to ask investors to accept lower returns or higher risk. It simply gave the market confidence to develop credible, investable opportunities at scale. For managers, that signal changes the question: what commercially viable propositions can we offer at scale to these institutional investors?

The same principle applies to blended finance, where success depends on trust and an acceptance that different investors will have different priorities. The manager's role is often to bridge those objectives and make them investable. Ultimately, though, it comes back to beneficiaries. When asset owners understand the outcomes their beneficiaries care about and translate that into clear mandates and portfolio requirements, capital is much more likely to follow.  

Assuming more capital does begin to flow, where do you think investors are still underestimating the opportunity set?  

I would say natural capital and food systems. At its core, it's a supply and demand story. We have a growing global population, finite land resources and increasing pressure on agricultural systems. That creates opportunities across food production, logistics, waste reduction, regenerative agriculture and technologies that can improve yields.

I would also point to ageing populations. They will drive greater demand for healthcare, broader social services and infrastructure. These aren't simply social needs. They're long-term demand trends that will require capital and innovation.

More broadly, what gives me optimism is technology. The pace of innovation is extraordinary. In agriculture, we're seeing advances that can improve productivity far more quickly than before. In education, technology can expand access to high quality learning. In many markets, renewable energy has become cheaper than conventional generation.

The question for me is where Europe sits in that story. When I look at what's happening in Asia and the US, the pace of change is remarkable.  

Throughout our conversation, you've touched on everything from technology and energy to food systems and global development. Outside your day-to-day work, what are you reading, listening to or thinking about that is shaping how you see the world?  

Well, I have a young daughter, so I spend a lot of time thinking about what she'll need to learn in order to thrive in the future.

More broadly, I think a lot about the tension between increasingly local politics and challenges that are global in nature. Recently, I attended a conference in Amsterdam where one of the Dutch royals spoke about helping technology companies scale in the Netherlands. What struck me was how practical the ambition was. It wasn't about grand statements. It was about understanding what an ecosystem needs and helping make it happen.

That stayed with me. We often talk about global challenges, but solutions still start locally. The real task is helping the best ideas scale, and I think we need more leadership focused on exactly that.