Social Justice Investing for a Better World

Social justice investing is a way to use your money to make a positive impact on the world. By investing in companies that prioritize social and environmental issues, you can help create a better future for everyone.

One way to get started is to look for companies that have a strong track record of diversity and inclusion. For example, companies like Patagonia and REI have made a commitment to diversity and inclusion in their hiring practices.

Investing in companies that prioritize sustainability is another way to make a positive impact. Companies like Seventh Generation and Ecover have made significant strides in reducing their environmental footprint.

By choosing to invest in companies that share your values, you can help create a more just and equitable world.

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Social justice investing is a way to use your money to make a positive impact on society. It involves choosing investments that align with your values and goals, such as promoting diversity, equity, and inclusion.

Investors can use their dollars to support companies that prioritize social and environmental issues, like equal pay for women or reducing carbon emissions.

Social justice investing can also involve avoiding investments that harm communities or the environment, such as fossil fuel companies.

By choosing social justice investments, you can help create a more equitable and sustainable world, one dollar at a time.

Social justice investing can take many forms, and it's essential to understand the different types to make informed decisions. One approach is to consider pre-constructed ESG portfolios, which can provide a simple way to align investments with social justice principles.

ESG mutual funds and ETFs are another option, offering more choice for investors who want to construct their own portfolio. For those who want to take it to the next level, managed accounts can be used to customize investments to align with values.

Here are some specific investment options that promote social justice:

These options demonstrate the diversity of social justice investing and provide a starting point for exploring this space further.

Divestment is an important aspect of social justice investing. It involves selling assets that cause harm to black communities, such as companies involved in predatory lending or excessive executive pay.

One way to divest is to screen out companies that negatively impact black communities. The Racial Justice Exclusion list, compiled by Robasciotti & Phillipson, is a resource that helps investors make informed decisions.

Investors can also use fund search tools, like the one provided by the American Friends Service Committee (AFSC), to identify which funds to divest from. For example, most Vanguard funds, including VTSAX, have not decarcerated their portfolios and contain significant numbers of prison companies.

Divesting from companies that cause harm can be a powerful way to promote social justice. However, it's essential to consider the potential impact on one's investments. Some investors, like the author, have chosen to divest from even socially responsible and ESG mutual funds to align their investments with their values.

Here are some examples of companies that have been divested from due to their impact on black communities:

Social justice investing is a way to use your money to make a positive impact on the world. It involves evaluating companies based on their social and environmental practices, rather than just their financial performance.

Our social justice criteria focus on four key areas: Racial Justice, Gender Justice, Economic Justice, and Climate Justice. These areas are interconnected and often overlap, making it essential to address them together.

Racial Justice is a critical issue that affects many communities. Companies that participate in or benefit from unjust systems that perpetuate racial inequities are not aligned with our values.

Here are some specific issues we evaluate in the Racial Justice area:

We also evaluate companies based on their policies and practices related to Gender Justice. This includes ensuring safe and fair opportunities for all people, regardless of their gender identity.

Some specific issues we evaluate in the Gender Justice area include:

Economic Justice is another critical area that affects many communities. We evaluate companies to determine whether they deal fairly with the public and their employees.

Some specific issues we evaluate in the Economic Justice area include:

Finally, Climate Justice is a critical area that affects us all. We evaluate companies to determine whether they significantly contribute to climate change, lack environmentally sustainable practices, or negatively impact air and water quality.

Some specific issues we evaluate in the Climate Justice area include:

At Adasina Social Capital, they offer a Public Equities Strategy that aligns with social justice values. This strategy uses the Adasina Social Justice Investment Criteria to build a portfolio of stocks that reflects social justice values and advances progressive movements for change.

The Adasina Social Justice All Cap Global ETF is a key component of this strategy, tracking the Adasina Social Justice Index. This Index is a global universe of public equities across all major asset classes screened for social justice.

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Adasina Social Capital also offers Separately Managed Accounts (SMAs) that allow investors to tailor their portfolio to their specific goals. The US All Cap SMA has a $250,000 minimum, while the US Large Cap SMA has a $100,000 minimum.

Here are the investment options offered by Adasina Social Capital:

Traditional investment managers often prioritize Environmental, Social, Governance (ESG) and socially responsible investing, but may inadvertently cause harm.

Many investors have good intentions but end up investing in ways that harm the environment, economy, and society. This can be due to a lack of understanding or the complexity of the financial industry.

We need a better solution to impact investing, one that centers the goals of social justice movements and promotes restorative and regenerative investment solutions.

We created a better solution to impact investing because traditional investment managers often promote "Environmental, Social, Governance (ESG)" and "socially responsible investing" but may inadvertently cause harm.

Many investors have good intentions but end up investing in ways that harm society and the environment.

Investors are now seeking positive change and positive returns, with a shift towards sustainable investing.

Women and younger generations are driving this shift, with more assets being controlled by those who prioritize social justice.

Investors are asking their advisors how to ensure social justice principles are reflected in their portfolios.

Pre-constructed ESG portfolios and ESG mutual funds or ETFs are now available options for investors.

Managed accounts can provide even more customization for those who want to align their investments with their values.

A broad concept like "social justice" can be difficult to quantify, but company reporting and data providers are innovating to make social justice-oriented portfolios possible.

It can be time-consuming to research and invest in meaningful alternative investments, especially for non-accredited investors.

Some investors may face challenges in tracking alternative investments, unlike traditional investments in stocks, bonds, and real estate.

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The Extractive to Regenerative Investment Spectrum is a useful tool for understanding the different types of investments and their impact on society and the environment. It was originally introduced by Justice Funders as a guide for social justice focused philanthropy and has been adapted for the investment industry.

A key concept on this spectrum is Extractive Investing, which can cause social, economic, and environmental harm, even if the intention is good. This is what many traditional investment managers do when they promote "Environmental, Social, Governance (ESG)" and "socially responsible investing" without considering the full impact of their investments.

Regenerative Investing, on the other hand, centers the goals of social justice movements and offers a way to invest in businesses and communities that promote social justice and equity. This type of investing is still in its early stages, but it's gaining momentum, especially among non-accredited investors who want to make a positive impact with their money.

One example of a Regenerative Investment is the Kachuwa Impact Fund, which identified social justice as one of its impact themes and invested in funds that support women and people of color founders. Another example is the CNote platform, which allows customers to invest in loans issued by community development financial institutions (CDFIs) that support low-income families and locally owned small businesses.

These types of investments are not only good for society and the environment, but they can also provide a positive return on investment. For instance, investments with CNote can earn up to 2.75% interest and support a more inclusive economy.

The Extractive to Regenerative Investment Spectrum is a useful tool for investors who want to make a positive impact with their money. It can help them understand the different types of investments and choose the ones that align with their values and goals.

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You can invest in social justice through various platforms, such as Kachuwa Impact Fund, which identifies impact themes aligned with social justice, including investing in women and people of color founders.

Kachuwa Impact Fund's current holdings include the Harlem Capital Partners Venture Fund I and Capital Good Fund, which provides small-dollar personal loans and financial coaching to tackle poverty.

Investments with CNote earn up to 2.75% interest and support a more inclusive economy by investing in community development financial institutions (CDFIs) that lend to low-income families and small businesses.

For real estate investing, consider Buy the Block, an African-American-owned real estate crowdfunding portal that allows investors to get started with a minimum investment of $100 and empowers black communities to invest in themselves.

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Breaking up with your bank can be a low-risk way to put your money to work doing good in the world. Impact banking is an effective way to move much-needed capital into under-resourced communities.

Consider depositing some money at a black-owned bank like OneUnited Bank, which operates nationally. This can be a way to move your money out of financial institutions using predatory practices.

Local credit unions are another option, keeping more of their money in the community. They're a good choice for keeping your money local.

You don't have to break up with your bank entirely, but depositing some money in a credit union or black-owned bank can be a good start.

Community Land Trusts and Innovative Real Estate Options offer a chance to invest in social justice. One such option is Buy the Block, the first African-American-owned real estate crowdfunding portal, which allows investors to get started with a minimum investment of $100.

Its mission is to empower black communities to invest in themselves. Founder Lynn Smith wanted to offer an alternative financing source for developers and allow the community to be the financiers for these deals.

Purchasing a rental property in a marginalized community and providing high-quality low-cost housing is another idea worth considering. This can be done in partnership with a local affordable housing non-profit to identify good potential tenants and connect them with wrap-around services.

Offering owner-financing with a low-interest rate can help low-income buyers get a leg up on home ownership. This can be a game-changer for building wealth in the U.S.

Another mechanism for increasing the supply of affordable housing is establishing land trusts. A community land trust (CLT) purchases land on behalf of a community and holds it in trust in perpetuity.

By using resources from Community-Wealth.org, an individual or group of motivated real estate investors can purchase properties and put them into CLTs to ensure future availability of affordable housing.

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Self-directed retirement accounts offer a high level of freedom and flexibility in investing, allowing account holders to invest in a wider array of assets.

These accounts are available to participants who meet the same eligibility requirements and contribution limits as traditional IRAs, but with the added benefit of being able to invest in alternative assets.

Self-directed IRAs (SDIRAs) and Solo 401ks are two types of self-directed retirement accounts that allow account holders to invest in a variety of assets, with some restrictions.

Some assets that are not allowed in SDIRAs include S corporation stock, collectibles like stamps, art, or wine, and life insurance.

Self-directed retirement accounts can be more expensive than traditional IRAs, but some companies like Rocket Dollar are working to make them more accessible and affordable by offering online options.

Rocket Dollar's Core option is a more affordable option that doesn't include concierge services, but still allows account holders to get started with self-directed investing.

Another company that offers self-directed retirement accounts is IRA Resources, which comes highly recommended for their affordable fees and experience with private placement investments.

The monthly fee for participating in The Next Egg initiative is $9.99, although it may be possible to waive the fee in certain situations, making it a great resource for learning about self-directed investing.

Social justice investing is about more than just making a profit - it's about using your money to create positive change in the world. One way to do this is by evaluating companies based on their social and environmental impact.

The Kachuwa Impact Fund has identified a set of impact themes that align with social justice goals, including social justice, environmental sustainability, and economic development.

Social justice investments can take many forms, such as investing in companies that promote diversity and inclusion, or supporting organizations that provide financial services to underserved communities. For example, the Capital Good Fund provides small-dollar personal loans and financial coaching to help people overcome poverty.

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Investors can also use platforms like Wefunder to support black-founder led startups and other socially responsible businesses. However, it's essential to do your research and evaluate companies based on their social and environmental impact.

To make informed investment decisions, it's helpful to have clear criteria to evaluate companies. The Kachuwa Impact Fund uses a set of criteria that focus on four intersectional issue areas: racial justice, gender justice, economic justice, and climate justice.

Here are some of the specific criteria used by the Kachuwa Impact Fund:

By using these criteria, investors can make informed decisions about which companies to support and help create a more just and equitable world.

Rachel Robasciotti, a queer black woman, grew up in poverty in California. She's the principal of Robasciotti & Philipson, a black-owned all-female wealth management firm.

Robasciotti's personal experience with police brutality has given her a unique perspective on social justice investing. Her family has been directly affected by it multiple times.

Robasciotti's firm, Adasina Social Capital, aims to bridge the gap between social justice movements and financial markets. It's the new home of their social justice investing strategy.

As of 2020, Robasciotti's firm has already spent many years building bridges between the investment industry and social justice movements.

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Companies that prioritize social justice and minimize risks related to it have shown to outperform the broad market in 2020, with 75% of ESG-screened indexes outperforming their market equivalents.

This is because companies that treat their workers well, have a diverse leadership team, and are seen positively by the community tend to have downside protection during times of crisis.

Morningstar's analysis of ESG-screened indexes found that 88% outperformed for the five years through the end of 2020.

By acknowledging and addressing social justice risks, companies can not only do good but also enjoy some financial benefits.

Companies that have made commitments to issues like leadership diversity are now following through on it, and social justice will continue to be a big part of the conversation going forward.

In fact, a lot of companies have made commitments to issues like leadership diversity and are now following through on it.

Social justice investments can provide positive returns, even in a pandemic, as seen with the performance of ESG-screened indexes in 2020.

Investors are increasingly looking for ways to align their portfolios with their values, and social justice investments are becoming more accessible and mainstream.

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Having clear goals is essential for social justice investing.

Setting specific goals helps you make informed decisions about where to invest your money.

For example, if you want to address climate change, you might focus on companies that are transitioning to renewable energy sources.

Social justice investing often involves choosing companies that align with your values and goals.

According to a study, 70% of investors consider environmental, social, and governance (ESG) factors when making investment decisions.

By focusing on social justice, you're not only making a positive impact but also potentially earning higher returns.

Research has shown that companies with strong ESG practices tend to outperform their peers over the long term.

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