Last year I started a bit of a public conversation about racism in the investment industry.
As a person with some money invested in a few Roth IRAs, I was concerned that my efforts to build some savings might be unwittingly propping up racist practices at major companies. And I was curious to see how that conversation might develop into an area of social justice communications and campaigning.
There’s been some good progress since. In particular, I contributed research to a report by 17 Communications called “Private Inequity”, which looked at how some of the major backers of our modern economy are essentially paying lip service on racial justice issues. Leading firms are doing much more, and there’s a huge opportunity for the laggards to catch up.
I wrote to Tesla—my Stash investment in them is up 194% so far, this year, so it’s the least I could do—and supported a shareholder resolution on human rights at the firm encouraging the company to take seriously its responsibility to respect human rights throughout its operations and supply chain. The resolution included a racial justice component, particularly related to allegations of racism at some of the company’s factories.
Meanwhile the union, SEIU, and Majority Action also produced a racial justice report on “Equity In The Boardroom”, looking at how major investors like BlackRock and Vanguard vote. They found that of the 178 S&P 500 companies that had no Black directors as of their 2020 annual meetings, BlackRock voted to support the entire board at 163 companies and Vanguard voted to support the entire board at 166 companies. That strikes me as a good opportunity to exert some concerted pressure.
I’d like for us to muse on how organizations like 350.org, which has successfully made investing in climate risk a no-no, were originally based on successful efforts to get firms to divest from apartheid in South Africa. Maybe it’s time for that effort to come full circle and place racial justice back at the heart of things?
We talk about intersectionality. But that’s often a place where there’s more talk than walk, on the left. I really do see the intersection of race and other social justice issues like class and climate as intertwined. It’s just that simple answers on these questions aren’t quite as easy to plan for. Or to fund.
Likewise, it’s still difficult, as a regular saver, to invest in a product that screens companies out for racial justice reasons. Enter the Adasina Social Justice All Cap Global Exchange Traded Fund. It starts with a global index of 9,000 stocks, and then screens out 891 companies on racial, gender, economic, and climate justice criteria. It’s an effort spearheaded by Rachel Robasciotti, a social-justice-minded wealth manager on the West Coast.
You can read the white Paper explaining the approach here. Likewise, if you have an online brokerage account with a firm like Fidelity, then you can go online right now and buy into the traded fund by searching for the “JSTC” product name. I just bought a hundred dollars’ worth. It’s so cool! And I’m excited to contribute more and watch it grow over time. If you’re lucky enough to have a financial adviser, then you can speak with them about how that might sit in your portfolio of investment.
(Legal disclaimer…I’m not offering investment advice. Of course. But simulated performance over the last three years pictured above shows the fund outperforms the all-cap index. I mean, it’s worth being part of a conversation around your long-term goals. Right?)
It’s good to see the financial arena beginning, albeit cautiously, to have a conversation about how racial justice risk can be a factor in long term financial performance. I agree with the idea that wealth is too often how injustice shows up in our pockets and I’m interested to continue the conversation along these lines.
