Social Justice Investing – Is There Such a Thing?

Social Justice Investing seems to have sprung up as a meme in the last couple of years as a result of the Black Lives Matter mobilization following the murder of George Floyd. I was intrigued and a bit skeptical.

Finance and investing have of course had a very troublesome history when it comes to social justice, in fact they could be viewed as the very antithesis of it.

Suffice it to mention the role finance and investment capital played, via the innovation of the limited liability joint-stock company, in the European colonial enterprise and slave trade starting in the mid-17th century. This is well documented in the brilliant book Blood and Money – War, Slavery, Finance and Empire by David McNally (2020).

Therefore, the concept of social justice investing felt at first blush, like an oxymoron. Yet it got enough traction to compel even Investopedia to include an entry for social justice in its investment dictionary, and a pretty decent one at that.

A commonly accepted definition is that social justice refers to a fair and equitable division of resources, opportunities, and privileges in society.

The racial wealth inequality in the US, to take just one metric, is a clear indication that we have a very long way to go to achieve social justice in the US.

Our history of institutional racism has been well documented in the book The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein (2017). For those who just want a short summary, this article by Terry Gross, host of Fresh Air on NPR, should do.

Broadly speaking, there have been a number of efforts to reverse the effects of such racial policies. For example, the 1977 Community Reinvestment Act (CRA), or the work of CDFIs (Community Development Finance Institutions) providing capital and technical assistance to mostly minority and economically disadvantaged communities. I am also aware of a number of private equity funds and impact investments trying to address the racial wealth gap by focusing on Black and minority entrepreneurs and workers.

While addressing issues of social equity and therefore social justice, the initiatives mentioned above have not explicitly organized themselves around the concept of social justice investing.

Rachel Robasciotti is the person who most likely came up with the term social justice investing and who certainly popularized it and put into practice.

She grew up in Oroville, CA in an economically disadvantaged Black community ravaged by systemic disinvestment. She experienced homelessness, and her family, as many others in her community, was not spared the scourge of fatal police brutality.

Despite these early challenges, her brilliance shown through and allowed her to graduate from high school at 15, and start a financial advisory firm at age 25. A deeply compassionate individual and a queer Black woman, she set out to use finance to promote social justice.

She founded Adasina Social Capital which began in 2018 as a social justice investing strategy.

Rachel recognized that, as asset manager, she could use the power of stock ownership in collaboration with social justice movements to change corporate behavior by organizing investors so that they would stop giving their dollars to companies that exacerbated racial, gender, economic, and climate inequities.

This approach is much more impactful than just relying on ESG metrics. The traditional ESG practice, for example to address gender equity issues, is to look at the number of women on the board of publicly traded companies, as if having a few women on the board was sufficient to address gender issues in the workplace.

Adasina’s approach was rather to consult social justice movements organizing around gender issues in the labor force to find out how it could use its power of stock ownership to advance their cause. Through this engagement it became clear that one of the most relevant problems for their constituency was the practice of forced arbitration for sexual harassment claims, very common among publicly traded companies.

In 2019 Adasina launched the Force the Issue Campaign.

According to their website, forced arbitration has been shown to favor employers over harassment survivors and silence the victims, creating a culture of acceptance of sexual harassment in the workplace.

So far, this coalition has effectively persuaded 300 publicly traded companies to publicly disavow the use of forced arbitration policies for sexual harassment claims. Over 10 million workers now know that they can take a workplace harasser/abuser to court.

Adasina maintains and makes publicly available the list of all publicly traded companies in the US and their stance on the issue of forced arbitration for sexual harassment.

A similar effort was launched to address racial equity issues. In June 2020 Adasina publicly released its entire dataset of Racial Justice Exclusion List organized by topics, such as money bail involvement, occupied territories, prison funding, immigrant detention, prison labor involvement among others.

In late 2020, Adasina Capital introduced the Adasina Social Justice All Cap Global ETF (JSTC), a highly diversified, global, all-cap portfolio.  Beginning with a global universe of 9,000 stocks, Adasina screened out companies whose policies, products or services exacerbate social injustice.

While I have a deep appreciation for the impact Adasina Capital has had in raising specific issues like the use of prison labor or the policy of forced arbitration for sexual harassment, and organizing other institutional asset holders and getting a number of publicly traded companies to change their behavior to reduce their harm to society, the environment and their workers, I firmly believe that if we are to achieve social justice, we must do more than invest in publicly traded companies, no matter how may screens they may have passed. Nevertheless, I would consider JSTC a “reduced harm” investment option for those who wish to continue investing in publicly traded companies.

Another interesting initiative I want to highlight is Just Futures, an effort to promote social justice investing and to offer more value-aligned retirement investment products and services to non-profit organizations. Just Futures recently organized a very interesting series of webinars on the topic of social justice investing – a good primer on the topic.

One more good resource on the topic is this Crowdsourced Guide to Social Justice Investing by Laura Oldanie whom I met through NextEgg – a community of practice learning new ways to invest retirement assets for a better future.

Let’s talk about debt and the economy

Like a bad recurring dream, we in the US are once again talking about the “debt ceiling”.

The discussion about public debt is often buttressed by two misconceptions about the economy I would like to dispel.

The first has to do with the government being constrained like a family by its budget and having to spend no more than it brings in.

The second has to do with government debt and how important it is to reduce it.

Both concepts reveal a complete ignorance of basic macroeconomics and make possible the abomination of “austerity” – a brutal and counterproductive economic policy.

An interview about the next economy

Santa Cruz Permaculture recently interviewed Marco Vangelisti, who has a background in finance and investment management and was a founding member of Slow Money. He is a 100% impact investor and helps communities increase their capacity for local investing. Marco’s workshop is titled “Essential Knowledge for Transition: Understanding the economy, money and investing and how to transform them for a regenerative world” and will take place February 23-24.

Our interview began by acknowledging the fact that some people think economics is just plain boring. Others find it confusing, or overwhelming because while they know it has direct effects on their lives, how it functions and the various forces at play can seem complicated and beyond our control, and that can cause anxiety. Why is this, and how do we overcome the inertia around understanding economics so that we can actually transform our current systems for a regenerative world?

SC Permaculture: For many people, the concept of “economics” is either boring or frightening orboth. What drew you to economics and finance, and what keeps you interested in this work?


Marco: The economy and the logic of the market have permeated every aspect of our lives and the way we interact with each other to meet our daily needs, yet most people feel unable to or uninterested in understanding how the economy works. 

Part of the problem is the way economics has been taught in school in the U.S. in the last forty years. Case in point–I came to the U.S. after studying math in Italy and attended economics classes as UC Berkeley. Economics as taught in college had taken a quantitative turn and my math skills were very useful. Only after the financial crisis of 2018 I finally understood that the assumptions required to “quantify” economics and apply to it the mathematical apparatus rendered it not only inaccessible to the regular public but also irrelevant for understanding how the actual economy worked. 

It turns out that understanding how the economy works not only does not require understanding economics (especially the current hegemonic strain of neo-classical economics) but it is actually accessible to anyone with a basic level of education and curiosity. 

Economic decisions made by the financial and economic elites in this country, without our understanding let alone our consent, profoundly affect our lives. To exercise true democracy we need to reach a collective understanding of how the economy actually works and challenge the economic decisions made by the few which affect them many. I see this as the necessary path to bringing about a more just and compassionate society. This is was motivates me to share with regular people my understanding of the economy and of the financial world.

SC Permaculture: You touched on this a little already, but why is understanding money, banking, economics, and finance important for the average person?

Marco: Basically the money and banking system, the economic system, and the financial system act as the operating system of society. The way these systems are currently configured leads to a number of undesirable outcomes like concentration of wealth and power, increased inequality, the housing unaffordability crisis, mounting levels of debt, increasing insecurity of the labor force, environmental degradation. It does not have to be that way! A systemic approach is called for and can be brought about by citizens equipped with a critical understanding of those systems and the more benign alternatives we can to create.

SC Permaculture: How have your years of experience working in finance influenced your current views on money, the economy, and capitalism?

Marco: My 20 years in finance made me understand the extent to which great wealth has been accumulated in the hand of the few through a process of extraction. One of the primary mechanisms of value extraction and expropriation has been finance and investing. Capitalism has been transformed into a form of financial capitalism that has sucked the life out of labor but also out of the old industrial capitalism of the prior century. 

To understand our current economic situation it is also critical to understand the role of banks in the creation of debt and money therefore inflating asset bubbles, creating business cycles (or increasing their magnitude) and the process of expropriation.

SC Permaculture: What is the main problem with our current banking system and what could be the role of public banking in the new economy?

Marco: Our current banking system is based on a private for-profit model which has not served our economy well. A common description found in most of the introductory economic textbooks describe banks as intermediaries that collect excess savings and lend it to expand productive activities in the economy. It turns out that banks create the money they lend and very little of their lending goes to productive activities. Most of their lending now goes to fund acquisition of existing assets – mostly in real estate. This causes asset bubbles and the housing unaffordability crisis experienced by most desirable cities in the U.S. A significant portion of their profit comes from fees and very high credit card interests.

The private banks also rely on government subsidies in the form of FDIC (Federal Deposit Insurance Corporation). As we have seen in the build up to the financial crises of 2007-2008 banks created too much money, lent it recklessly to fuel a massive housing bubble and when the whole edifice of credit collapsed the U.S. Government had to step in and clean up the mess. Banking in a modern economy has become an essential component of the economic infrastructure and the private sector has demonstrated that it cannot be trusted in managing the awesome privilege of creating the money we use every day.

An obvious solution is to turn a large portion of the banking activity into a regulated utility owned by the public through a network of local, state or federal governments. The public banking sector in Germany is considerable and is credited with the post WWII stability and resilience of the German economy. A network of public banks in the U.S. could provide credit where credit is needed (especially to rebuild our failing infrastructure and to support the productive economy), would not fuel financial speculation and asset bubbles, would not engage in usurious practices or unscrupulous lending, and would not be a drain on the economy through ever increasing fees and high interests.

SC Permaculture: Could you briefly describe the mission behind Slow Money? How did it get started and what have been some results of this organization so far?

Marco: Slow Money is a movement that emerged out of the Slow Food movement. It recognizes that our industrial food system and our financial systems are problematic and that a new ethos is called for to address the problem caused by both. 

The idea is to direct some of the personal investments towards the goal of restoring the fertility of the soil in our own foodshed by supporting local farmers and food producers who treat soil and people with respect. The idea is to measure the success of our investments by the world they make possible and not just by the financial return they generate. 

There are currently about 20 local Slow Money groups around the U.S. that have mobilized around $60M of capital to fund more than 600 small family farms and food enterprises.

SC Permaculture: What does impact investing mean? What is one example?

Marco: Impact investing refers to a form of holistic investment that is aware of the non-financial impacts an investment has on communities and ecosystems. Socially responsible investments mostly consists of screening the worst offenders out of a mutual funds of the stock or bonds of publicly traded companies (mostly multinational corporations). Impact investing usually focuses not on publicly traded companies but on funding specific project that try to address a social or environmental problem. 

One example is Community Foods Market (CFM) in West Oakland. West Oakland is currently a food desert and its 28,000 residents don’t have access to a full grocery store where they live. After a decade-long effort, Community Foods Market will open the very first full-service grocery in West Oakland in decades. California residents can invest in the project through the DPO (direct public offering) of CFM shares. This would be a very clear example of an investment that is trying to solve a social problem–in this case eliminating a foods desert in the Bay Area. 

SC Permaculture: In the past decade, you’ve seen changes already taking shape in our economy and society. Can you share a few of your favorite examples of these changes?

Marco: One of the most positive changes I have noticed in the last decade has been the resurgence of worker-owned cooperatives which represent a systemic alternative to capitalism. Unlike most privately owned and all of the publicly owned companies out there, worker-owned cooperatives are democratic institutions bound to other cooperatives by an ethics of collaboration and support instead of competition. 

Another hopeful sign has been the eschewing on the part of many of the Millennials I know of the consumerist fervor that has characterized the American society since the middle of the 20th century. The social enterprise movement has also grown and young people are more likely to dream about building a social enterprise than becoming a CEO of a large multinational corporation. 

SC Permaculture: Thank you so much for sharing your perspectives, Marco! We look forward to seeing you in February.

Learn more with Systems Change and the Next Economy: Regenerative Design for People & the Planet

Join us this February 23-24 in Santa Cruz, CA to spend the weekend learning about all of this and more with Marco Vangelisti! Register online here. Additional information about the Systems Change & The Next Economy course, including dates, workshop titles, and instructor biographies for our January, March, and April workshops, is available at