The year of 2020 has started with a bang. OK, more like a fiery explosion of pain, suffering and negativity due to the pandemic and centuries of harmful social and environmental policies. Is this the beginning of Armageddon or is this the beginning of a brighter future for all? The actions we take during these turbulent times can and will make a difference. Just like The Phoenix from ancient Greek folklore, the people of the world will rise from the ashes to create a more just and sustainable society. How can we make this positive change? The answer is simple; money and politics control many of the governments and societies that we live in today.
We, the people, have the power to make change through Voting. This means voting at the election booth and voting with your money. Since I am a financial professional and not a political expert, this article will focus on how you can take action with your money to make a positive difference.
I wrote Three Ways to Create Positive Impact with Your Money in late 2018. That article focused on these three categories:
- Where do you bank? – Money makes the world go round. If you do not want for your money to fund projects or policies that do not align with your values, change banks. Two links that can help you find a bank that mirrors your values are Certified B Corporations and Members of the Global Alliance for Banking on Values.
- Where do you shop? – Small-scale, locally owned businesses create communities that are more prosperous, entrepreneurial, connected, and generally better off across a wide range of metrics.
- How is your money invested? – What we invest in today will determine the world we live in tomorrow. There is an awakening happening in the investment world. Investors are leaving behind traditional investing that is focused only on the shareholder. Instead, they are embracing impact investing that takes a stakeholder approach to generate financial, social, and environmental returns. This way of investing is not only good for society and our planet, it is also good for your investment portfolio as you can see from The Outperformance of ESG Investing During the COVID-19 Selloff.
If your investment portfolio is not aligned with your values, there are advisory firms like IMPACTfolio that can help you make the change.
In addition, fund companies such as Change Finance* are leading the way in transforming capital markets to create the world in which we want to live. For example, they recently sent this letter to each of the companies in their portfolio asking companies to become radically transparent and to publish their median racial and gender pay gap data. Investors can support the engagement through this LINK.
Additional ways to take action with your money:
- If you own shares of stock, you have the right to vote on corporate governance issues via proxy voting. Do not delete the link or throw away the mail when you have the opportunity to cast a proxy vote. To learn more about shareholder advocacy, AS YOU SOW has incredible resources.
- Create company engagements or vote on existing engagements. The team at YourStake have created an incredible tool that will review the investments you own and allow you to vote with your money to support issues important to you.
- Research funds or investments that directly support issues that speak to you. For example, if you would like to support Black Women Entrepreneurs, you could review the merits of the Sistahbiz Loan Fund.* Black women entrepreneurs are continually overlooked when it comes to funding from banks and venture capitalists. This loan fund is the first loan fund in the nation dedicated to black women specifically.
It is time to take action and move the needle in the right direction to create the world we want for ourselves and future generations. Some steps are small and easy whereas others may require more time and effort. We hope that you implement at least one action item from this article. Even small actions will make a positive difference.
*Disclosure - IMPACTfolio is proud to offer Change Finance’s U.S. Large Cap Fossil Fuel Free ETF (CHGX) in our core investment portfolio. However, the information provided about Change Finance or the Sistahbiz Loan Fund is in no way meant to be an investment recommendation. As a fiduciary to our clients, we can only give investment recommendations after a thorough understanding of our client’s goals, risk tolerance and financial picture. Before investing you should carefully consider a Fund’s investment objectives, risks, charges and expenses. This and other information are in the statutory and summary prospectus.
Scott Arnold, CFP®, has been in the financial services industry since 1998. He is a co-founder of IMPACTfolio, a wealth management firm that specializes in IMPACT investing and holistic financial planning for one flat-fee.