Socially responsible investing has been putting billions of dollars to work for social change for decades.
In some cases, the strategy means avoiding certain sectors. Religious organizations, for instance, steer clear of alcohol, firearms, tobacco and other “sin” stocks.
Some investors focus on companies that are already socially responsible to help them thrive, while starving competitors that are less responsible.
And others aim to change the practices at the companies themselves. By buying enough shares to get a seat at the table, they have a voice in issues like climate change, worker’s rights and gender discrimination.
For several years now, investors and advisers have applied the socially responsible lens to creating portfolios that consider racial inclusion and diversity. The social unrest incited by the killing of a Black man, George Floyd, by a Minneapolis police officer has added urgency to the movement.
“We had our own list of publicly traded companies that we’ve been excluding from our portfolios for years,” said Rachel J. Robasciotti, chief executive and founder of Robasciotti & Philipson, an investment adviser. “We never thought there was a reason to share that. But now we are saying, here are the companies we don’t invest in and why.”
And individual investors should vote for the initiatives on their annual proxies, Mr. Streur said. Last year, of the 30 proxy initiatives related to diversity and inclusion that Calvert supported, only four passed, he said. [Emphasis added]
[These initiatives also include internal examination of asset managers.]
What drove the [Knight] foundation’s research [finding 1 percent of assets are managed by firms owned by women or people of color] was a look at its own management structure in 2010. At the time, the foundation, which oversaw $2.3 billion, had only one African-American manager, who oversaw a mere $7.5 million, said Juan J. Martinez, the foundation’s chief financial officer.
“We were very surprised,” Mr. Martinez said. That prompted the foundation to begin asking about the ownership of investment firms as part of its due diligence process. It now has 30 percent of its assets managed by women- and minority-owned firms, and its returns have continued to be strong.
He took issue with the assumption that the foundation was not focused on returns and that the minority- and women-owned firms had lower returns.” The data doesn’t bear that out,” he said.
The Rockefeller Brothers Fund, which has an $1.2 billion endowment, announced this week that it would add grants to address racial justice and democracy. But for the past decade, it has been realigning its assets — including grant making, investments and its reputational capital — with its overall mission.
The Rockefeller fund found that it had come up short on the diversity of investment managers, with just 12.3 percent women or minorities. It has announced it will double that percentage, but has not revealed a timeline.