Defending Racial Justice Through Your Investments
We spoke with Civic Hall member Matt Davis on measuring racism in the financial system, how investment apps can do better, and on backing our words with our actions. Matt (he/him) is a strategic communications consultant focused on antiracist organizing.
Fiona: Matt, tell us who you are and what moves you.
Matt: I tell people I’m a reformed journalist. I spent ten years in journalism. I’m from London originally but I’ve spent a lot of time working on criminal justice here in the U.S. Some of my best work was done in New Orleans, where I uncovered some systemic issues in the jail system there and I really saw the problems with racism. I have taken that organizing mentality from journalism to strategic communications consulting. You’re supposed to be objective in journalism, but it was obvious to me that there were some people getting messed up and some people doing the messing up, and for me to quote them both with false equivalence just didn’t seem the best use of my time. So I’ve done organizing, particularly through the communications side of things.
I got involved doing financial organizing in London when I worked with an investment organization called ShareAction. We were addressing the risk of climate change through the investment system and found that people now see climate change as a business risk. I was struck to consider the same risk in the criminal justice maze, the risk of racism. It strikes me that wealth is how injustice shows up in a person’s pocket. I’ve been looking in the last three months, since George Floyd’s murder, at doing an anti-racist organizing campaign through the finance system, which is not ambitious at all!
Fiona: In early July, Civic Hall published a newsletter on the topic of economic protest, highlighting #StopHateforProfit and #BlackoutDay2020 as latest examples. It’s this idea of leverage capital for good. In connecting with your work here, can you elaborate more on what antiracist work in the financial system looks like?
Matt: The economic protest aspect of things is so powerful. Many of us don’t realize that we are invested through our equity holdings in companies that we might not align in values with. I don’t know about you but I have a few Roth IRAs invested through Vanguard and Fidelity, and the like. Without us realizing it, those investments often are profiting off things that I would not be comfortable with, such as climate change. Blackrock invests in for-profit prisons. So it’s interesting when you see the chief executive of Blackrock coming out and
making a statement on “our actions to advance racial equity and inclusion.” He said he was going to release products to tackle racism and address diversity in staffing. There are huge institutional power and organizing opportunities there.
There’s been some really great leadership in this space, particularly by women of color who often do most of the work and don’t get the credit. As a white guy, I feel it’s important to lift some of those people up. Rachel Robasciotti is a wealth manager in the Bay Area, and she released a racial justice exclusion list of investing companies. It’s really interesting! Thing is, to invest through Rachel you need $50,000 in order for her to support your impact in an anti-racist investment strategy. But she’s really leading in this area.
On apps like Stash or Acorns, I can’t easily access antiracist products but I should be able to. So that’s one area of organizing I do. I want to also look at the likes of Blackrock and other major asset managers, and compare the companies they’re invested in with their rhetoric on antiracism. Amy Cooper, the woman in Central Park who is now being charged for filing a false police report, worked for Franklin Templeton, which is one of the oldest investment houses in the U.S. After she was charged, Franklin Templeton came out saying, “we do not tolerate racism of any kind.” But how deep does that statement go? I think of shop window signs that say “Black Lives Matter,” and I think it’s great they’re saying that but to what extent are they just trying to avoid getting their windows smashed? Do they fundamentally embody that? Do they hire Black staff? Do they promote them at the same rate? So Franklin Templeton has opened themselves up there to accountability. That’s where I’m interested in working: the large asset manager and institutional investor space. They move so much money and they’re not thinking about it because they all went to the same schools, they all look like I do, many of them play golf together and don’t think about this stuff. Feels like a big opportunity.
In the U.S. victims of systems of oppression are not given financial education for a reason. It’s deliberately kept complicated by the people who hold the power.
Fiona: I have a Roth IRA with Merrill Edge and was offered the option to invest in a socially and environmentally conscious portfolio, but I don’t know where they set the boundaries of what that means. I’m sure investigating this will just bring up more questions. I’m an immigrant so I don’t have generations of wisdom from people teaching me this stuff. It feels important to name that this is a complex world that not many people can access.
Matt: Absolutely. One of the companies at Civic Hall is BREAUX Capital whose Co-founder is Brian Williams. He and I were talking about this. His method of building financial literacy among Black millennial men is to have a buddy system to support budgeting, saving, etc. In the U.S. victims of systems of oppression are not given financial education for a reason. It’s deliberately kept complicated by the people who hold the power. The more complicated something gets, the more money and power get concentrated. For example, most of us are invested in companies and we pay them a fraction and trust them to run it for us. But that fraction of a fee adds up so these companies have huge amounts of wealth. There’s a responsibility there.
I’m lucky to have gotten my financial experience. I always wanted to be a writer and journalist, I landed in financial journalism as my first job. Then adding criminal justice journalism, weaving into climate change work, and now I’m back in the financial space. I feel lucky to have gone on this accidental journey, most of us are not this lucky. Most of us are just worried about having enough money in the future so we rightfully focus on making more money and building that security.
Fiona: Apps like Stash, Acorn, and Robinhood seem to attempt to close this access and knowledge gap to investment by making it easier to make small, quick investments, though without trading experience, this comes with risks. The question of “how responsible is the company I’m investing in?” remains. Is there anything out there already, or are you working on some type of antiracist metric of accountability for investment firms?
Matt: Many folks have done this work already and I’m following their lead and I don’t want to take credit for anyone’s hard work. I’m meeting with those individuals and generally as many people as I can, to develop the focus of the campaign. I don’t want to replicate what already exists and I want to be strategic.
The metric is the key. Imagine some sort of survey or scorecard that ranks the top 25 largest asset managers on their commitment and measurement in being antiracist. That will get the conversation started. They don’t want to engage, so the only way to get them to engage is leveraging their 24 other competitors, some of whom are perhaps engaging in some way. There needs to be a rigorous survey that gets them on the record. I suspect that we’ll find, which is what we found with climate change 15 years ago, that folks aren’t there yet, so they might all get failing grades. Once we’ve given them all an F or D, we can start working with them to make some progress. In a decade or so perhaps bringing the grades up to C’s.
Firms need to know it’s a rigorous assessment and that we can see through their “expert language” protecting “fiduciary duty to our investors” and dismissing consideration of morality. That is a good way to avoid taking any responsibility on social matters. But climate change has already done this work and revealed that you’re actually doing your fiduciary duty when you look at systemic risk in racism. If you’re invested in a racist company, there’s an investment risk. The trick is drawing that out and showing it to investment firms, making it clear that we cannot ignore it.
It’s a long project and we have to figure out a way to do it sustainably so as to not burn people out.
We have to be courageous and, like we’ve started addressing gender diversity on boards, we need to talk about racism in the investment space.
Fiona: I’d be curious how racism is quantified because though I’m having immediate reactions, I realize this is a complicated and tricky thing. Having been in the environmental space for some time I do appreciate the reminder that several climate accountability scorecards exist now.
Matt: Yes, and we shouldn’t shy away from the tricky conversations!
Rachel’s list of exclusions includes any companies that invest in West Bank properties. It could be that Blackrock may have different comfort levels in this territory versus in the territory of for-profit prisons. I don’t know. But let’s start the conversation. What does Risking Racism mean?
There’s also an element of tone policing where people “tuck their heart” so as not to upset people in power. We have to be courageous and, like we’ve started addressing gender diversity on boards, we need to talk about racism in the investment space.
Fiona: What calls to action do you have for folx interested in more consciously engaging with the financial system?
Matt: If you’re using any of those investment apps like Robinhood or Stash, send a direct email to the product team and request an antiracist product. It’s easy to invest in the defense industry, but what if I wanted to put $20 to the antiracist industry? Contact Stash here, Robinhood here, and Blackrock here. For large investment firms, you can ask “is my money invested in private prisons?” Or “What about some of the other focus areas on this racial justice exclusion list?”
If folx know philanthropic investors at Nathan Cummings Foundation, David Rockefeller Fund, Disney Family Foundation, Sierra Club Foundation, or California Endowment, who all have pledged for racial equity, I’d love introductions. They need to be held accountable too, and I think the truth is, many of them want to be held accountable. They need someone knocking on the door saying, “you said you cared about this stuff, but where is the evidence?” It helps them have more direct conversations with their colleagues who are more resistant.
If you’re invested with a firm, connect with the customer service team or your advisor and ask them where your money is invested. The more of us who ask for this transparency, the more they’ll notice this is a demand, and the more likely they are to share a substantial response. Contact Blackrock here.
Or drop me a line. I’m constantly having conversations about this stuff and I’m eager to learn more from people who care and want to get more involved.
Fiona: Who’s inspiring you lately?
Matt: Darren Walker at the Ford Foundation. This is a guy who is turning one of the biggest sources of wealth and directing it to social justice efforts at Ford. He’s Black American, public school-educated, and just helped pass an incredible rent reform bill in NYC. He backs the wordy commitment to social justice with action, and even recently said that they’ll borrow money in order to more fully back these commitments. That takes guts and great leadership.