Jessica Espinoza: Closing the equity gap through positive impact

This week, our TTI Interview Series covers our TTI member Jessica Espinoza. Jessica is a Senior Investment Manager at DEG, the German Development Finance Institution (KfW Group) and the Chair of the 2X Challenge. She is also the Founder of XOCO Unlimited, an edtech venture empowering adolescent girls in developing countries to leapfrog to digital jobs of the future.

In this interview, Jessica shows us how to address alarming issues, and highlights the equity gap in education, and how it can be transformed through digital innovation. She argues that we need to distinguish between “do no harm” ESG standards and generating true impact through contributing positively to the SDGs, and how impact needs to be incorporated into the core business of investors and entrepreneurs.

Edtech venture for girls empowerment

Jessica, please tell us a little about your work and how it intersects with the impact sector.

Since its advent, the COVID-19 pandemic has been a disaster for girls; pulling them out of education and pushing them into sexual exploitation. Given the unprecedented speed of this occurrence, it quickly became evident that we needed to be faster, bolder and more innovative with our response.

And so I launched XOCO in 2020 as an unconventional edtech venture to change the game for girls. XOCO empowers adolescent girls to escape sexual exploitation and leapfrog to digital jobs of the future. We’re a global team of impact investors, tech geeks, digital leaders, education ninjas, and entrepreneurs leveraging our networks to bring world-class business education to young women with low levels of formal education across Latin America, Africa and Asia. In partnership with grassroots organizations and the world’s most innovative companies, we’re developing a powerful digital education model to create new pathways from basic education to skilled jobs in the digital economy. Our programs are co-designed by young women from the global South who are trained as peer coaches.

At XOCO, we also collaborate closely with impact investors and entrepreneurs to develop practitioner toolkits allowing investment managers and business leaders to promote girls' empowerment with their investments and along business value chains.

Contributing to the SDGs vs. “do no harm” ESG

What is your definition of “impact”, Jessica?

Impact for me is a positive, intentional and measurable contribution to the SDGs on top of a "do no harm" ESG approach. I’m a big fan of the Operating Principles for Impact Management (OPIM) which allow investors to truly incorporate impact along the entire investment cycle and make impact part of their DNA.

The equity gap in education

Based on your experience, what do you believe is one of the most important issues that needs to be solved over the next 10 years?

Closing the equity gap in education and transforming the education sector through digital innovation, not only in terms of tech-driven innovation but also changing mindsets for the future of education in the 21st century. So, for example, teaching kids how to think like scientists in solving problems rather than memorizing formulas. Closely related to this is the challenge of closing the digital divide. And of course, climate action and gender equality should be at the core of absolutely every issue we seek to solve, and should be at the center of the future of education.

Impact within the core business of investors and entrepreneurs

Within your sector, what do you think are some of the biggest challenges and/or obstacles in the impact space (standing in the way of efficient and fast solutions)?

The biggest challenge is to truly incorporate impact into the core business of investors and entrepreneurs, making it part of the DNA of their organizations. Despite bold claims, in every day business practice, impact is often still treated as an "add on" rather than an integral part of the way of doing business. Creating impact as part of the core business is hard work - but it's no longer a luxury; it’s increasingly becoming the expectation of stakeholders around the world. And it’s the only way to move the needle in shifting capital towards the SDGs.

Impact at scale

Jessica, tell us more about the long-term vision you have for your work.

Our long-term vision is to build innovative, strategic partnerships between edtech ventures like XOCO, impact investors and entrepreneurs around the world to break down silos, leverage synergies and generate impact at scale. To tackle big challenges like the SDGs, we can only create meaningful impact through greater collaboration across business, academia and civil society. Top Tier Impact is an incredible network to do this! XOCO is strategically aligned with key global impact frameworks like the 2X Challenge and the Global Impact Investing Network (GIIN)’s IRIS+ standard for impact management and measurement. We’re also using the new Operating Principles for Impact Management (OPIM) to align our impact model with the “gold standard” of the global industry.

“Do no harm” ESG standards and positive SDG contributions

Through your work, what are some of the misconceptions you’ve noticed regarding what “impact” is all about?

A common misconception is the notion that you automatically create impact by investing in emerging markets or in certain sectors, ignoring the fact that if investments aren't done well, they can actually cause more harm than good. In my experience, it's crucial to distinguish between "do no harm" ESG standards and positive SDG contributions, i.e. impact value creation. You need to be intentional about impact to really make a difference.