Fighting Systemic Racism and Biases through Impact Investing

In her recent column for The New Yorker, Keeanga-Yamahtta Taylor studies the wider and more implicit systemic elements that have been fueling racism in the United States. Taylor, an assistant professor of African-America studies at Princeton University and author of Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership, temporarily pulls her focus from the acute police brutality evidenced in the past weeks—which led to the deaths of George Floyd and Breonna Taylor—to examine the punitive spirit of a corrupt mayorship and the egregious closing of urban schools. She did so in effort to emphasize “the importance of expanding our national discussion about what ails the country.”

“We must also discuss the conditions of economic inequality that, when they intersect with racial and gender discrimination, disadvantage African-Americans while also making them vulnerable to police violence,” Taylor continues. “Otherwise, we risk reducing racism to the outrageous and intentional acts of depraved individuals, while downplaying the cumulative impact of public policies and private-sector discrimination that, regardless of personal intent, have crippled the vitality of African-American life.”

Taylor underscores the necessity of taking a wider view. There is a dire need to look at every facet in which there is potential to fuel, albeit inadvertently, racial injustice—and this includes deeply looking at how and where we invest our dollars. Thankfully, many of the front-facing benefits of impact investing and ESG criteria—shaping a cleaner future, eradicating poverty, buoying women’s rights—are seeping into mainstream conversations. These are critical elements pushing the impact world forward. But another vitally important reason, which is to fight ingrained biases and racism, is staring back at the United States and world. And it needs to be a consistent part of the investment conversation.

Corporate policies and company behavior have a direct link to amplifying or fixing societal issues. The way employees are treated in the workplace much informs their lives outside. (It also impacts workers’ health.) The onus is not just on the leaders at these institutions, but on the investors to take notice and speak up. Through demanding board transparency and inclusion, pushing for anti-racist practices implementation, recognizing the grave economic inequalities Black Americans face, inquiring about workplace morale, and delegating voting power, impact investors can be direct lines of change. (There is power in asking questions: If a company avoids disclosing its anti-racist policies and company-wide inclusion, they are likely hiding something.) We think of it this way: Impact investing is a critical patch in the quilt of activism.

The momentum is growing. It is incredible to see. The rebellion is propelling the previous work of the Black Lives Matter movement, as well as the groundwork of so many other notable operations. But the activist opportunities do not solely exist on the urban streets or city hall steps. They are everywhere—and for the impact investor, they are found in conscious ventures and in asking questions.

Because all real change begins with knowledge, we’ve compiled a reading resources guide. These have provided us guidance at The Conscious Investor as we continue our education about racial injustice and the ways in which we can all do our parts. This is an ongoing effort, one that will last this lifetime. But remaining humble and open to the lessons in front of and behind us is the most important thing we can do for the next generation of impact investors.

Books, Organizations, and Other Anti-Racism Educational Resources for Impact Investors

Investing to Advance Racial Equity from Cornerstone Capital Group

This report unveils specific ways investors can move capital toward efforts that are shifting the capitalistic paradigm to one based on inclusivity and equality. The report covers three components of race inequality—lack of access to capital, income disparities, and affordable housing—and their potential solutions.

An Investor’s Guide to Investing for Racial Equity

Kristin Hull, the founder and CEO of Nia Impact Capital, collated this thorough guide that pinpoints eight actions investors can take to be an activist and adopt “a racial equity lens” with their capital allocations.

Echoing Green

Echoing Green is a New York-based collective that helps to fuel innovators and entrepreneurs in the fields of social justice and social innovation through seed funding, leadership development, and connections. Being on the front lines of justice, they are also a wealth of information for emerging ways to get involved. (Beyond Capital Fund has looked to Echoing Green for investment opportunities over the years.)

Openvest

A top resource for impact investors, Openvest is a public benefit corporation and investment advisory firm that seeks technological solutions in providing accessible, inclusive, and innovative investment opportunities. The firm focuses on several social-causes, thus making it more accessible to fund companies fueling racial justice initiatives and divest from companies profiting from prison labor.

The Color of Money: Black Banks and the Racial Wealth Gap by Mehrsa Baradaran

Mehrsa Baradaran, a professor of law at University of California, Irvine, has intensely studied how housing segregation and the unequal credit market has created a financial trap for Black Americans.

The Broken Heart of America: St. Louis and the Violent History of the United States by Walter Johnson

Missouri native, Walter Johnson, was compelled to write this book after the unrest and uprising in Ferguson, Missouri unfolded after the killing of Michael Brown. He uses St. Louis as a study to unveil how America’s deep history of racism shaped a corrupt system of capitalism.

The Case for Reparations by Ta-Nehisi Coates

This article, now several years old, is one that warrants the label required reading. Culture and political journalist and author, Ta-Nehisi Coates, looks at the two-plus centuries of financial, emotional, and physical pillage endured by Black Americans.

Being Black in Corporate America by the Center for Talent Innovation

The non-profit organization released this analysis in late 2019 to shed light on the corporate prejudice Black Americans face, which results in stunted career opportunities and growth. The findings offer leaders insight into microaggressions and racist behaviors, and ways to transform workplace policies.  

Advancing Diversity, Equity, and Inclusion in Journalism by Democracy Fund

Leading anti-racism scholar and author Ibram X. Kendi told BU Today that journalists are integral in communicating anti-racist research. Truthful, unbiased, professional storytelling delivered by independent organizations that stand against racism is a vital component to a just future. This report uncovers the ways funding can encourage more diversity and inclusion in journalism to provide content that serves all races and communities. (The American Journalism Project is also an excellent resource for supporting local journalism. City newspapers are responsible for breaking some of the most  important stories covering corruption, abuse, and racism.)

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At The Conscious Investor, it is our goal to shed light on topics that we find interesting, inspirational, and educational. Therefore, this article is strictly for inspirational and informational purposes only. It is in no way intended to substitute for professional investment advice, professional financial advice, or general counsel. To the extent that an article features the insight, opinions, or advice of an expert or company, the expressed views are those of the cited person or company and do not necessarily represent The Conscious Investor and its employees or affiliates.