In the last few years, sustainable and impact investing have become increasingly popular as investors seek investments that reflect their personal values. A variety of products and services that appeal to those investors are available, with varying levels of impact. It can be hard for an investor with deeply held social justice values to discern between products and services making an authentic impact and those that just have good marketing.
And so, how do you know if your investment advisor is focused on making a real impact with your money?
Through this piece we aim to offer the three most important questions anyone with social justice values should ask their investment advisor, and tips on how to think about the answers.
Question 1: What impact issues are you addressing through my investments?
When listening to your advisor’s answer, reflect on whether you agree on which issues you want your investments to address. Is your advisor focused solely on climate change and the environment, or do they also focus on the social justice issues that matter to you? Other issues frequently ignored by investment advisors include racial, gender, and economic justice.
Adasina’s Answer:
We care deeply about racial justice and view it as inextricably linked to climate change. We also address issues of gender and economic justice, and not just for people at the top of the corporate ladder, but with people from all socio-economic classes in mind.
Question 2: How are you interpreting and measuring that impact?
Does your investment advisor’s method for impact make sense to you, and is it impactful? For example, a common gender equity impact approach is investing in companies that have a greater than the average number of women on their board of directors. Does this approach to impact resonate with you, or do you wish to see the impact on a wider scope of impacted women?
Adasina’s Answer:
We determine our Social Justice Investment Criteria in partnership with impacted communities. Through meaningful conversations and sourcing community-driven data, Adasina works with those communities to identify and measure how we’re making an impact.
Regarding gender justice, we evaluate companies on not only board representation, but also their stances on sexual harassment, reproductive rights, LGBTQ+ equal employment opportunities, and whether they pay subminimum wages to tipped employees.
Additionally, in support of the #MeToo movement, gender equity, and workplace safety, Adasina led a nationwide campaign to end forced arbitration for sexual harassment claims in publicly traded companies. This campaign resulted in a historic win, with the US Senate passing bipartisan legislation to end the practice in early 2022.
Question 3: Who told you to solve for impact that way?
The answer to this question is very important! Notice whether your investment advisor is solving for impact based solely on the guidance of financial services companies and academic experts rather than looking to social justice movements and organizations that represent communities most impacted by injustice.
Adasina’s Answer:
At Adasina, we form meaningful relationships with impacted communities and social justice movements, asking them what type of impact they would have us make as investor-owners of publicly traded companies. These organizations are from, and represent, the interests of communities most directly impacted by our traditional financial system, which often fails to prioritize social justice. We draw inspiration in choosing these partners from groups like One Fair Wage, UltraViolet, The Movement for Black Lives, NAACP, First Peoples Worldwide, ETC Group, and many more. These campaigns and movement partners have the infrastructure to act as thought leaders, campaign collaborators, and bridge-builders between finance and social justice movements.
Now what?
After you have had this conversation with your investment advisor, give some thought to their answers. Love your advisor but not their answers? We’re happy to help them if you put us in touch! And as always, you are welcome to invest directly with Adasina.