10 Ways to Advance Social Equity Through Investing
At Humanize Wealth, we are often asked what we do differently compared to other wealth management firms, and specifically, how our clients allocate their wealth to advance social equity. Below are ten focus areas we believe have the potential to meaningfully contribute toward achieving greater social equity:
Impact Investing: Impact investing involves making investments intentionally designed to generate specific and measurable positive social and environmental outcomes alongside financial returns. By investing in companies or projects that address challenges such as affordable housing and equitable access to quality education, transportation and healthcare, investors help catalyze systemic transformation.
Support for Minority-Owned Businesses: By providing capital, mentorship, and access to networks, investors support the growth and success of underrepresented entrepreneurs and business owners, promote economic empowerment and reduce wealth disparities across under-resourced communities.
Community Development Investments: Community development projects can revitalize disadvantaged neighborhoods, create jobs, and improve access to essential services. Examples include community centers, infrastructure development like solar and last mile broadband internet access, and small business incubators.
Education and Workforce Development: Education and workforce development initiatives can enhance social equity by increasing access to job training, and skill development. This can help individuals from disadvantaged backgrounds overcome barriers and gain access to better employment opportunities, ultimately promoting economic mobility and reducing wage inequality.
Co-Ops and Worker owned Businesses: Investing in employee ownership co-op financing is a bridge financing strategy for transitioning concentrated company ownership from founders and early investors to worker owned enterprises. Newer worker owned co-op businesses can also be structured to include external investor partners to help fund growth, obtain equipment and secure real estate for the worker owned co-op.
Financial Inclusion: Investing in initiatives that promote financial inclusion, such as microfinance or community development financial institutions (CDFIs), can help underserved individuals and communities gain access to financial services, credit, and capital. This can enable entrepreneurship, asset building, and economic empowerment among populations that face barriers to accessing traditional banking services.
Policy Advocacy: Investors can leverage their influence by advocating for policies that promote social equity. By engaging with policymakers, supporting organizations working towards social justice, and actively participating in public discourse, investors can contribute to creating an enabling environment for social change.
Women’s Health: Innovative women’s health solutions can dramatically improve health outcomes, particularly for historically underserved populations. Opportunities for lowering barriers to and cost of care, and delivering culturally intentional care, can be pursued through investment strategies focused on increasing provider capacity, expanding geographic reach, and enabling in-home or self-administered diagnostics and treatments.
Environmental Justice: Investing in companies and organizations that provide products and services focused at the intersection of environmental sustainability and social justice supports people and communities most impacted by climate change, biodiversity loss and degradation of natural ecosystems like clean air and water, and healthy soils. Especially community-led infrastructure investments driven by collaborative, participatory decision making processes.
Shareholder Engagement: One of the most powerful tools investors can employ as owners of publicly held stock is to allocate investments to fund managers that have expertise and resources to engage company board members and management teams in open dialogue around environmental, social and governance matters. Examples include disclosure reporting on matters like employment practices and employee benefits, supply chain management and political spending and influence campaigns.
It's important to note that advancing social equity requires a comprehensive and multifaceted approach that goes beyond investments alone. Collaboration between investors, governments, civil society organizations, and communities is crucial for addressing systemic inequalities and promoting a more equitable society.
