In episode 92 of the Investing in Impact podcast, we speak with Rehana Nathoo, the Founder and CEO of Spectrum Impact.

Rehana has spent her career at the center of how capital moves, who it reaches, and why it often fails to support the communities that need it most. Her path into impact investing was not planned, yet the twists shaped a perspective that few in the field can match.

She began her professional life at the UN Capital Development Fund working on project finance in East Africa, where she saw firsthand how much potential is lost when local entrepreneurs are dismissed as too risky.

That early exposure to the gap between perceived and actual risk set her on a mission to understand how the global system of capital could work better.

From there she joined the Rockefeller Foundation, where she helped support the early field building that pushed impact investing into the mainstream.

Later she stepped into the traditional finance world at Bank of New York Mellon to help launch its social finance efforts, an experience that highlighted how difficult it is to shift long-held norms inside large institutions.

She then carried those lessons to the Case Foundation, sharpening her focus on how private investors and philanthropies can shape the market.

In 2018 she founded Spectrum Impact to take everything she had learned across the development, philanthropic, and financial sectors and offer it directly to investors.

Her firm helps clients understand the real tradeoffs behind impact, design strategies grounded in their constraints, and avoid the common mistakes that derail early efforts.

Rehana brings a clear, candid view of what it takes to place capital in a way that delivers financial performance and meaningful outcomes.

In this conversation, Rehana breaks down the evolution of her career, what she believes investors still misunderstand about impact, the role of catalytic capital, why ESG remains a critical risk tool, and what she sees coming next for the field.

Podcast transcript with Rehana Nathoo, Founder and CEO of Spectrum Impact

Q: How did your journey into impact investing begin?

A: Like many people in this field, I found myself in the right place at the right time rather than following a master plan. I grew up in Toronto and came to the United States for graduate school, where I completed a double masters focused on development finance and foreign policy.

The goal was to join the Canadian Foreign Service, but the service reorganized and stopped accepting new applicants. That forced me to pivot.

I leaned toward development finance and joined the UN Capital Development Fund. My first role focused on project finance in East Africa across agriculture and energy.

I spent two years bouncing between New York, Kampala, and Dar es Salaam. That experience taught me how powerful capital can be when it changes the perception of risk rather than simply avoiding it.

Q: What did you learn from your early work at UNCDF?

A: The work taught me how impactful it is to address the perception of risk. We were convincing local banks to lend to local energy producers and agriculture businesses. Much of the challenge was not the business fundamentals.

It was the assumption that these entrepreneurs were not investable. We used credit guarantees and letters of enhancement, but the real work was helping banks see the opportunity in their own communities. That was the spark that led me toward focusing on how capital systems function.

Q: How did your experiences at Rockefeller Foundation and Bank of New York Mellon shape your understanding of the field?

A: Rockefeller taught me the value of field building and the importance of drawing in traditional capital. Philanthropy and remittances make up hundreds of billions of dollars. The global capital markets are measured in the hundreds of trillions. They do not belong on the same graph, and Rockefeller understood that early.

At Bank of New York Mellon, I saw the real difficulties of trying to build a social finance platform inside a large financial institution. You need full buy in from every layer, from wealth advisers to senior leadership. Otherwise even the best designed ideas get stuck. It showed me that you cannot simply attach new impact priorities onto a traditional system without changing the underlying structures.

Q: How do you define impact investing?

A: At its core, impact investing is investing with the intention of generating both a financial return and a social return. People can define the social return differently, but intention must be clear.

The more important distinction lies in the characteristics of impact investing: intentionality, measurement, and transparency. This work is more expensive, more complex, and demands more resources than traditional investing.

You are trying to achieve financial performance and outcomes at the same time. What makes it impactful is that it often targets markets that are underserved, overlooked, or misunderstood.

Q: Do most clients understand impact investing when they arrive at Spectrum?

A: Most of our clients are curious but not experts. Even when someone claims fluency, we still define terms from scratch.

The language in this industry can be exclusionary without meaning to be. We make sure everyone shares the same starting point before we design any strategy.

Q: What exactly does Spectrum Impact do?

A: We are a boutique consulting firm focused only on impact investing and ESG. Our work centers on strategic guidance. Through all my career moves, I saw how often organizations talked about field building without actually doing it.

Spectrum was created to take the lessons from all of those experiences and offer them to a broad set of investors.

We also speak plainly with clients. We tell them what not to do more often than what to do. If their expectations or their structure do not align with the type of impact they want, we tell them.

Our goal is to design something that fits their capital, their risk profile, and their capabilities.

Q: How do you begin designing an impact strategy for a client?

A: We always start with constraints. Do you need liquidity? Do you need the money back in a certain timeframe? Do you want governance rights? Do you have internal expertise?

Once constraints are clear, we move to values. For example, someone interested in energy might want to focus on adaptation or mitigation. Only when those two pieces are settled do we build the actual investment structure.

Depending on the need, we may identify external managers, help them build a fund structure, or assist them in hiring an in house impact professional.

Q: How do you think about the difference between impact investing in public markets versus private markets?

A: In private markets, the relationship between risk, return, and impact is very close. Early stage investments let you influence business models, customer sets, and outcomes.

But public markets hold far more capital. An investor using shareholder power to influence a public company might have catalytic influence on a much larger scale than a venture investment.

We believe you can find impact in every asset class. The form of that impact simply changes depending on the tool.

Q: How do you view ESG today?

A: ESG, at its core, is a risk framework. That has been lost in the public debate. Every company relies on people and natural resources as inputs. If those inputs erode, the company is at risk. Ignoring these factors is not prudence. It is negligence.

ESG became politicized because the industry leaned too heavily on moral language early on. That made it vulnerable. Our team published a pocket guide this year to help investors navigate skeptics using data rather than rhetoric.

True fiduciary duty requires analyzing risk. ESG is part of that work. If we stop using it, we will build companies that are not prepared for the next five, fifteen, or twenty years.

Q: Can you explain your view on catalytic capital?

A: Catalytic capital belongs beside traditional investing and impact investing. It is a tool for building markets that are not yet mature.

Many ideas and markets will never produce market rate risk adjusted returns at the beginning. But with early, flexible, risk tolerant capital, they can evolve into investable markets later.

This is not a new idea. It is simply another form of research and development. Every major technology gap, including artificial intelligence, was funded by non return generating capital long before markets caught up.

Q: What developments in the field make you optimistic right now?

A: A few areas excite me.

First, the connection between AI and climate. AI will disrupt the workforce in some ways, but it also strengthens climate tech, satellite imaging, soil health tools, and financial access.

Second, the shift in how companies think about workers. With AI taking on some tasks, humans become even more important. They are stakeholders, not cost centers. Companies that treat workers as strategic assets will succeed.

Third, bipartisan momentum around employee ownership. Turning workers into owners could reshape how wealth is built and kept in the United States.

Q: What is ahead for Spectrum Impact over the next several years?

A: We want to keep improving access to information. The reaction to our ESG pocket guide showed us the hunger for practical resources.

We also see investors becoming more sophisticated. They ask harder questions and want to measure progress. That makes this work more rewarding.

Finally, we plan to lean into areas where policy and investing intersect. Employee ownership and other bipartisan efforts show that impact is not only possible. It is gaining traction in unexpected places.