Learn how to take concrete steps to advance social equity
Explore key concepts
Read through a quick guide to some fundamental concepts in investing for social equity:
- IEN Report: Racial Equity Investing: A Primer for College and University Endowments | August 2020
- IEN Report: Gender Lens Investing: A Primer for College and University Endowments l March 2019
- IEN Report: Gender Lens Investing Landscape: Barriers & Opportunities l July 2018
- IEN Report: Gender Lens Investing: The Business Case, Opportunities, and Action | February 2017
- IEN Webinars: Investing in Social Equity
- IEN Blogs: Member posts on diversity equity and inclusion
- Addressing Systemic Social Risk: A roadmap for Financial System Action | The Investment Integration Project (TIIP), 2020
- Why and How Investors Can Respond to Income Inequality | PRI
- How Investments Drive Injustice and What Investors Can Do About It | Transform Finance
- Investing to Advance Racial Equity | Cornerstone Capital
- Racial Equity & Impact Investing | Mission Investors Exchange's Resource Library
- Racial Equity Investing | Glenmede
- Racial Equity Investing: The Time Is Now | Cambridge Associates
- Connecting the Dots: The Intersection of Economic Equality, Racial Justice, and Sustainable Investing | Community Capital Management
Learn from peer examples
- Visit our “What are my peers doing?” page for a comprehensive guide
Commit to discussing racial equity at investment committee meetings to have conversations necessary to explore how racial, gender and social equity considerations are key to meeting your fiduciary duty requirements
- Sign on to Confluence Philanthropy's Belonging Pledge with committing to " discussing racial equity at our next investment committee meeting. We will move our agenda forward on this. We will share our next steps and results (perhaps privately), so that we can help to identify industry-wide barriers and the technical resources required to advance the practice of investing with a racial equity lens.”
- Learn how you can be a mindful fiduciary by understanding ways in which racial, social and gender equity considerations are central to your institutional mission. Learn more about how this meets fiduciary requirements of care and diligence.
Investors should build consensus about which investment strategies are most aligned with their unique goals or mission
Developing consensus for investment decision-making is a collaborative process that can be challenging. As perceptions of race can inform both business and investment operations through hiring and retention, manager selection and risk assessment, investors should consider conducting bias training and diversifying the Board and the Investment Committee to bring in new insights, spur new approaches and expand networks. Consultants who are leading in this work include:
- Vernetta Walker & Associates Consulting -Specializes in boardroom consulting, training, and strengthening nonprofit organizations across the globe.
- BoardSource - Specializes in nonprofit board leadership and supports, trains, and educates nonprofit leaders from across the country and throughout the world. BoardSource provides leaders with an extensive range of tools, resources, and research data to increase board effectiveness and strengthen organizational impact.
- Venn Diagram Partners - Specializes in the intersection between leadership development, diversity, equity &inclusion and executive coaching for leading organizations who value the power of leveraging differences.
- ReadySet - Consulting and strategy firm that helps companies build more human-centric, inclusive cultures, teams and products. Clients span industries from tech, to nonprofits, to social change organizations each starting at a unique point in their DEI journey.
- Frontline Solutions - Black-owned consulting firm that serves the philanthropic and nonprofit sectors, working with their clients to build tools, models, and ventures that create far-reaching impact.
Please visit our Consensus Building page for examples of how your peers have approached this process.
Update & Evaluate:
Update your Investment Policy Statement to reflect your social equity priorities
- Draw relevant concepts and language from examples of policy statements that incorporate social equity priorities and factors in the investment process
Invest & Engage:
Engage with consultants and ask your asset managers about their approach to internal diversity and inclusion and how race and social identity is factored into the investment processes and economic projections
- Review questions to consider when hiring or working with an investment consultant
- Review sample manager due diligence questionnaires
Allocate to racially diverse consultants and asset management firms to diversify talent and deal flow and improve the investment’s risk and return profile
Allocate to funds with a social equity investment thesis or businesses that produce products and services that address key issues for communities of color
- Transform Finance's resource outlines how investors can consider exposure to racial injustice by asset class and assess potential strategies for action.
- The Investment Integration Project created a roadmap for how investors can address systemic social risk in their portfolios (page 26)
- Integrate environmental, social and governance (ESG) factors across the portfolio with an explicit focus on diversity, equity and inclusion
- Invest in Community Development Financial Institutions that offer stable cash or fixed income like investment returns while providing financial services to help low-income, low-wealth, and other disadvantaged people in their communities.
- As You Sow's free online tools tracks companies that exacerbate inequality, including those involved in mass incarceration, weapons of war, forced labor and gender inequality.
- As You Sow examined companies in the S&P250 to assess their corporate policies and practices on social justice across key performance indicators (KPIs)
- As You Sow's Executive Compensation initiative has an annual list of "The 100 Most Overpaid CEOs"
- Investors for Livable Wages list of public traded companies that pay a subminimum wage
Engage with companies as a shareholder on issues that relate directly to social equity. If you invest in commingled funds, require transparency from your external managers as to how they engage with companies on these issues.
- Become an active owner to engage companies you own about their strategies and directions on climate change and social inequality
Use investor voice in partnership with organizations focused on social justice through investor statements, pledges and public comments to spur collective action
- Check out current investor sign on opportunities
Offer internships in the Investment Office for underrepresented students to aid in diversifying the field, or create a student-managed fund focused on diversity of the team as well as a social equity investment strategy
Iterate & Share
Disclose information on your strategy and progress to encourage transparency and accountability
- Communicate progress to your stakeholders to encourage transparency in the finance industry and advance the field of sustainable investing
For goals endowments, consultants, managers and companies can set to invest in social equity, see here.