Trading Up

Durreen Shahnaz ’89 creates Asia’s first socially responsible stock exchange

by Karen Brown

Shahnaz, a former investment banker and publishing executive and mother of two, is the founder and chair of Singapore-based Impact Investment Exchange (IIX), the first socially responsible stock exchange in Asia. When Durreen Shahnaz ’89 was growing up in Dhaka, Bangladesh, the men in her Muslim family would go to pray at the mosque every Friday. The women often stayed behind to feed the beggars who came to the gate of their home. “We didn’t have much, but it was always just giving something,” recalls Shahnaz. “And if we couldn’t, we were taught to say, ‘Please forgive me, I can’t help you right now.’”

Today, Shahnaz still carries that responsibility on her shoulders, but on a much larger scale. Instead of handing out individual coins or servings of food, she is overseeing a venture that will enable capital investments worth millions of dollars in social enterprises for companies whose core mission is to contribute to sustainable development.

Shahnaz, a former investment banker and publishing executive and mother of two, is the founder and chair of Singapore-based Impact Investment Exchange (IIX), the first socially responsible stock exchange in Asia. Among the companies listed on IIX are those that give microloans to female entrepreneurs in rural areas and provide low-income housing or sustainable food security solutions.

The seeds of the stock exchange—due to launch next year—were planted while Shahnaz was in New York City running her company, oneNest, which connected women entrepreneurs in poor countries to the Western marketplace. Here she talks about her latest venture.

How has creating IIX differed from your previous entrepreneurial direction?
I felt the biggest difficulty for me with oneNest was the fact that I never got investors who really cared about the mission. It was always such a battle in the board meetings. They often turned to me and said, “Why can’t you get this stuff made in China? It will cost you a fraction.” They completely missed the point. So when I sold the company, in some ways it was a relief. That’s when I moved to Asia.

How did IIX gain such strong international support for its social mission, including a grant from the Rockefeller Foundation?
I started making inquiries and wrote editorials about the need for this platform to help social enterprises raise capital. Then I got an e-mail last year from the Rockefeller Foundation, saying, “We’re having a gathering in Bellagio, Italy, to talk about social capital markets, and we’d like you to come.” Later, the managing director from the Rockefeller Foundation in charge of what they call “impact investment” came to me and said, “Whenever you want to do the exchange, let me know, because we want to help you.” It completely fell in my lap.

Given your focus on disadvantaged communities, why not start a more direct-service organization? Why do it through a social stock exchange?
There is room for charities in the world, but I am interested in sustainable development, thus the interest in social enterprises—for-profit or not-for-profit companies focused on a social mission with a market orientation. They need to be able to attract investments for which they can give a return, and really show they can be financially viable as well.

Do investors in this exchange have to be willing to make less money than they would in, say, the New York Stock Exchange?
Some of them will make equal to market return, absolutely. But in many cases they may make less. More importantly, they will always [receive] social and environmental returns along with financial returns.

Fall ’10 SAQ

Listen to the full interview with Durreen Shahnaz ’89

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Karen Brown is a longtime reporter for WFCR public radio, in Amherst, MA; a radio documentary producer; and a freelance writer. Her features have appeared on National Public Radio and other national outlets. She has also written for The Washington Post, San Francisco Chronicle, and other publications. She has been contributing to the Smith Alumnae Quarterly since 2001 and conducted the “Author’s Voice” interviews. She lives in Northampton, MA with her family.