Good Trouble: Investing For Social Justice
By: Rebecca David
Tags: Impact Investing, BlackLivesMatter, Social Justice, Esg, Civil Rights

It has become even more clear after this last year that we are connected; when one group is held down we all suffer. Many of us have continued to question how we can do more to end injustice. Leaders, investors, and individuals alike know that a new path is the only way forward. I’m sharing a few ways that we as investors can use our money and our voices for a more just, equitable, and inclusive world.

We Can Get Into Good Trouble

As John Lewis said, “get in good trouble, necessary trouble.” As investors, that is exactly what we can do. We can use investment managers like Trillium, Calvert, and Nia that help us fight for the rights that belong to all. When you invest in funds like these, you are using your voice as an investor to support efforts like the ones listed below.

Investment manager Trillium believes that a strong democracy is linked to a strong economy. They understand that a system that disenfranchises voters, that seeks to limit their ability to make their voices heard, and that amplifies the priorities of powerful individuals and corporations through political spending and lobbying, is a corruption of our core democratic principles. Over the course of 2019 and early 2020, Trillium reached out to 20 companies with large US workforces to encourage them to provide meaningful amounts of paid time off to vote. Through these efforts, the team led Bank of America, Apple, and PNC Financial to provide their employees with hours of paid time off to vote.[1]

Calvert is engaging on systemic racism with companies it owns by asking companies to do the following: provide the information required to accurately assess their racial diversity, provide pay equity disclosure across race and gender, and publicly state what they are doing to combat racism and police brutality, including action taken to address failures in our education system.[2] Calvert has written to 100 of the largest companies in their portfolios, asking them to release their EEO-1 reports (Equal Employment Opportunity Reports). For those who do not currently disclose the report, Calvert asked for a meeting to allow them to explain why they think doing so is important. Calvert has also reached out to other investors to encourage them to support this initiative, and to coordinate with those who are already committed to the issue. As of January, they had received responses from more than three quarters of the companies, and 27 have newly agreed to release this report. Calvert will continue dialogue with these companies to ensure that they follow through on their commitments. For those companies openly declining to disclose or failing to acknowledge the request, Calvert has filed 16 resolutions and will consider filing additional shareholder resolutions.[3]

Nia Impact Capital only invests in companies that include diversity in leadership. Nia uses its platform and investor voice to share the accumulating research on the benefits of diversity in corporate leadership, encouraging many portfolio companies to increase their gender and racial diversity numbers. Nia is taking it a step further publicly going after companies like Tesla and Goldman Sachs for their use of forced arbitration. Forced arbitration is a tool that effectively keeps harassment complaints quiet. For example, while Tesla’s code of conduct bans harassment and discrimination in the workplace, the company has faced multiple allegations of racial discrimination and harassment at its factories.[4] Nia Founder and CEO Kristin Hull also released a guide to Investing for Racial Equity, which is a worthwhile read and includes other actions we can take as shareholder activists. Among them, making sure your investment managers are voting your proxy statements in alignment with fair and equitable corporate practices like voting no for excessive CEO pay, and voting no to all white boards of directors.[5]

We Can Move Money Out Of Institutions That Are Contributing To Injustice And Discrimination

Where you bank and what institutions you invest with are two of the most important choices you make with your money. When you deposit money in a bank, it doesn’t just sit there. Banks use your deposits to make loans and investments in different projects. Banks play an essential role because they finance our economy; they determine who gets access to loans, and who doesn’t. In 2019 many banks made a commitment to stop funding private prisons. However, they have not all kept their word. Similarly, asset management firms like Blackrock, who is claiming to make a large move towards sustainability, is the largest shareholder in CoreCivic and the second-largest shareholder in the GEO Group. These are publicly traded companies that own and operate prisons, jails, and ICE detention centers across the country and around the world.[6]

We Can Invest In People Of Color

When you use a Community Bank or Credit Union, your money is being used to build local economies and get money into the hands of the people. Financial inclusion is one of the most important tools we have for fighting social injustice. Communities of color have historically been under-served by banks: 14% of Black households and 10% of Hispanics had no bank accounts in 2019, according to the Federal Reserve. For comparison, just 3% of White households are unbanked. OneUnited Bank, a Black-owned CDFI, offers “second-chance checking” for individuals who might have a hard time opening accounts elsewhere due to imperfect banking histories. Anyone can join the bank, which has offices in Los Angeles, Boston, and Miami. The bank has also provided lifelines to small businesses through PPP loans. “The first PPP loan we processed was an Uber driver,” said Kevin Cohee, CEO of OneUnited. “The reason we did that was to make the point that it’s the smallest among us — the one you could lose money on — that need the most help.”[7]

We can also invest in products like CNote. CNote makes it easy for institutions and individuals to invest in the economic prosperity of financially underserved communities across America. CNote was founded on two core principles: that everyone deserves an equal opportunity to pursue financial freedom and that each of us can play a part in building a more equitable world simply by changing where we invest and hold our cash. When you invest your cash (no minimum) with CNote, you are investing in a network of Community Development Financial Institutions (CDFIs) and Low-Income Designated (LID) Credit Unions. These investments help women and people of color start businesses, construct affordable housing, create jobs, and fund other community-centered projects.[8]

While I am not a person of color, I am an ally and I am in this fight. I hope you will consider taking even one of the actions listed. I won’t argue the business case for investing in diversity and justice, although it exists. I am more concerned with the case for our humanity.

“Ours is not a struggle of one day, one week, or one year. Ours is not a struggle of one judicial appointment or presidential term. Ours is a struggle of a lifetime, or maybe even many lifetimes, and each one of us in every generation must do our part.” — John Lewis

[1] https://www.trilliuminvest.com/leadership-corporate-engagement/corporate-support-for-employee-civic-engagement [2] https://www.morningstar.in/posts/58486/investing-systemic-racism.aspx [3] https://www.calvert.com/media/public/36659.pdf [4] https://www.claimsjournal.com/news/national/2020/09/09/299249.htm [5] https://www.linkedin.com/pulse/investors-guide-investing-racial-equity-kristin-hull-phd/?trackingId=TU%2FZ6zA9B9cLuzjPYM3agg%3D%3D [6] https://nyunews.com/news/2021/05/05/blackrock-ice-private-prisons-laurence-fink/ [7] https://www.cnbc.com/2020/07/04/upset-about-racial-injustice-where-you-bank-can-make-a-difference.html [8] https://www.mycnote.com/products/