Investing to Create a World You Would Like to Retire In

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Does the way you invest your money and your clients' money support the changes you and your clients want to see in the world? Hi everyone, I'm business coach Steve Sandusky for Barron's Advisor, The Way Forward Podcast. My guest today is Rachel Robashote. Rachel is the founder and CEO of Adesina Social Capital, which is an investment and financial activism firm serving as a critical bridge between financial markets and social justice movements. Rachel's passion for social justice investing is rooted in her background as a Black queer woman who grew up in a community that struggled for safety and financial security within a rural town that was largely segregated. Rachel graduated from high school at age 15 and attended Cal Berkeley, where she studied economics. After working at larger firms, at age 25, she founded a financial services firm dedicated to supporting the well-being of people and the planet. While there, she launched the firm's social justice investing strategy, which would later become Adesina Social Capital. Now, she ended up selling her financial services firm to Abacus Wealth Management so she could devote her effort to Adesina. In today's conversation, we explore social justice investing and how that fits with and differs from ESG investing. I found this conversation very enlightening, and if you want to have a deeper understanding of how we can vote with our money to fund and galvanize the change we want to see in the world, this is a show for you. With that, let's get started with Rachel Robashote. Over the years, we've heard the terms socially responsible investing, impact investing, sustainable investing, ESG, and then there's the term that you use, which is social justice investing. I'd like to start by having you talk about the evolution of these different terms, and then in particular, what are you trying to do with social justice investing?

Absolutely. So ESG, or environmental, social, governance investing, the primary difference between that and impact investing specifically is that ESG focuses on financial returns first, generally, and impact second. And even more importantly, what ESG is doing is using factors around environmental, social, and governance to enhance the financial returns. So because that's primary, if an issue isn't material to— in the public markets, for example, like a public company's financial returns— it's basically not considered. And mostly it is the public markets where ESG is used. Impact investing, on the other hand, has primarily been used in the private markets, And the focus there is on positive social, which generally also includes a financial impact first and financial return second. I see this really as a false dichotomy. It kind of assumes investors have to give up returns to pursue impact. And what we know from our own investing and from the research that we've done is that it's possible to do both the combination of getting market-like returns and also pursuing positive impact in public markets. I'm not saying it's been done to a large degree or necessarily that that's what kind of more status quo ESG investing is doing, but it is in fact what we are doing with social justice investing. We at Adesina offer public markets investments that deliver market-like returns. And we actually have an investment thesis that aligning portfolios with social justice movements gives investors this long-term risk advantage. And we believe that's true at its core because sound investing means that you're looking at the long term, right? And you're focusing on positive returns. And you really get that by investing in companies that are prepared for long-term risks and are operating sustainably. So for us, it's pretty straightforward.

[Speaker:TREY_LOCKERBIE] Okay. So I think a lot of people don't necessarily wake up in the morning and say, I want ESG or I want social justice investing in my portfolio. But I suspect this is personal to you. So I'd love to get a bit of your backstory and how you came to this type of investing and why this is so important to you.

So we coined the phrase social justice investing in 2018, but it was actually the events of what happened in 2016 and 2017 that really resulted in a massive shift in the focus for my life and my career. I grew up in a rural part of Northern California called Oroville. If you haven't heard of it, you're like most people. The reason you may have heard of it is because the tallest dam in the United States is there. There is actually a large Black population that moved there in order to build the dam in the 1930s as a result of the Great Migration. Lots of Black people left the South as a result of a lack of security, racism, these kinds of things, and moved to other parts of the country. The people that moved from the South up to Oroville and built the dam took these higher-risk jobs. And we were, as it turns out, redlined into living in the southwest side of Oroville. We called that the South Side. And like most highly concentrated and segregated Black communities, I grew up in a family mostly of women. And that was primarily because men had been taken out of the community as a result of mass incarceration. The war on drugs factored largely in my childhood. And also with several family members being taken from us and many other families as a result of police violence. I've had 3 close family members murdered by the police without repercussions. And we now know after 2020 that this isn't an uncommon story. So I grew up in a family that was very poor because the jobs generally went to men and we were families of women. So we were very poor, suffered from a lot of the impacts that you would expect of racial, gender, and economic injustice. Climate justice wasn't really something I was paying attention to much, or, and I didn't think it was very related until in 2016 we had like the end of multi-year droughts, mega droughts. And then the following year we had the extreme weather. This is something we're all becoming quite familiar with. The extreme weather where we had historic snowmelt and an atmospheric river and the dam started to break. I was coming back from an international trip and on, on the international news, I was, I saw my little hometown and we saw the dam starting to break and we saw the flood inundation route on the news. And what it showed was that the neighborhood that I had been redlined and my community had been redlined into living in was the exact neighborhood that was the highest flood inundation possibility. This sort of thing happens all across the world and in the United States because we have an idea that there are some people who are more valuable than other people, and we've decided that human needs are vastly more important than the needs of the planet that sustains us. And having our priorities misaligned in this way has led to untold suffering that's persisted for quite a long time. But we're in a highly connected world now, and people are very conscious of where their money is going and how it's participating in these larger systems of injustice. It became very clear to me in that moment, February of 2017, that climate was always going to be inextricably linked to issues of racial, gender, and economic justice. That's what I knew from my own lifetime and my own neighborhood, but it's also what I see in the world as we have social justice movement after movement coming forward kind of reforming how we think about our world and how we see whether or not things are equitable, I was seeing that, oh, this is something that's true all over the world. And if we are going to do what's best with our money, we're going to invest in a just, fair, sustainable future, then we're actually going to have to start focusing on the communities that have been marginalized and left out of the financial conversation, like the kind of neighborhood that I grew up in. So social justice investing is very important to me because I care about creating a world that, that people like me and my family can live in happily. Because I actually think that when the most marginalized groups are taken care of, everyone's better off.

Yeah. And so clearly this is very personal to you from the experience that you grew up in. But the reality is, like you say, everything is connected here. And so the change that we can make here is certainly going to affect the community, for example, that you grew up in, but it's going to benefit all of us. And so you're actually taking the action to try and make some positive change here. Now, you also talk about it at Ascena. You talk about these 4 interlocking levers that work together to create large-scale systemic change. You talk about people, investments, campaigns, and education. Could you give us a brief overview of each of those 4, how they work together? And then I want to go into some detail on the investments piece.

Absolutely. When we talk about people, we just mean that we're a different set of decision makers than is traditionally in the asset management world. Our collective wealth, we need to kind of harness the power of that collective wealth in order to make a better world, in order to make a future deserving of future generations to inherit. The first thing that we realized was that those who are making the decisions need to be different. So not only are we a highly diverse and inclusive group of people, we're 80% Black, Indigenous, and people of color. We're 70% women and gender expansive. We realized that a different set of people needed to be at the table making decisions. They also needed to represent the communities for which we're seeking justice. And so that's another big difference when we talk about people, is that we hold ourselves accountable to these social movements for racial, gender, economic, and climate justice. We actually give them a say in what we're doing in several formal structures within our firm. The investments themselves directly link to what those communities tell us is important. If we want to know what we should be doing for Black Americans, we're going to be talking to the Movement for Black Lives. Same thing with First Peoples and Indigenous folks, we'll be talking to First Peoples Worldwide, these kinds of organizations that are led by and do work for those communities. So we want to line up the people, the investments. The campaigns are very specific. If I do a really good job cleaning up my portfolio, I have a very rigorously evaluated portfolio, the impact that I can make in my own portfolio is pretty limited. I probably removed a lot of the companies that are the more problematic actors. What's more important then is that I do my best to mobilize investors in order to also be paying attention to what social justice movements are telling us we should be focusing on. And then education, it's what investors said they needed. They said, great, you want to help us align with social justice movements? We're going to need to understand what these issues are and what the most meaningful actions are that investors can take. So that's how we put those pieces together.

So we've got activist investors out there. These are people who are mainly focused on financial returns. So they're gonna go to a company, they're gonna say, hey, we own 5% of your stock. We want you to cut 5,000 people. We want you to sell this business and we wanna get your stock price up. So I don't think that's what you're doing. But you consider yourself an activist investor. So what is your version of what those activist investors do? So you buy stock in these companies that you think exhibit the kind of qualities that you're looking for. But then what do you actually do to get them to change their behavior? Are you only investing in companies who are already doing, quote, the right things that you're looking for, or are you investing in companies who are not doing things the way that you'd like to see them do it, and then you try and prod them to make positive change.

So we're only investing in companies that pass all of our criteria, which are the way that we evaluate companies for alignment with social justice movements. So there's over 40 different specific criteria. Once you name the criteria, then you have to come up with specific ways of measuring that. We have over 80 different ways of measuring alignment. So every company in the portfolio that we create has to pass all of those metrics. Quote unquote, we're just investing in the good companies or the ones that pass those screens, that is. You end up with a very limited set of work you can do. If you're moving capital toward those good companies, then we don't end up in the same sort of proxy fights that kind of other people who might invest in fossil fuels or private prisons would end up with. What happens with us is that companies work so hard to pass all of those, and it's usually quite an intentional act that's happening. That usually when we have trouble with a problem company, we pick up the phone and management's very receptive to conversations that we have with them about the issues that are arising because people there are being very intentional. So the traditional way of having impact, which is buy a company that maybe you don't agree with everything that they're doing and try to change their behavior, we're doing something different. We're flowing capital to the companies that are doing the right thing. And we're taking the change that we wanna make. And rather than limiting it to companies that we would buy specifically in our portfolio, We're going more lateral to other investors and giving them the education, sharing certain data that they need in order to take action in their portfolios. So what that means is that we aren't limiting it just to the portfolio of companies that we work with. We're actually mobilizing other investors to stand alongside us because that's the only way we really get this large-scale systemic change that's possible. It's, it's really when you go beyond your own portfolio.

Okay, so, so help me understand that a little bit more. So essentially you're investing in the companies that are already exhibiting the characteristics that pass all your screens. That's correct. You're not investing in the companies that are not doing things the way that you'd like to try and get them to change. But you said something about how you then have these other investors that come alongside you. So I'm trying to understand how you spread the systemic change in a positive way beyond the companies that are already doing things the way you'd like to see them do it? I, I guess I'm missing that link there.

Absolutely. So this may be best explained with an example. There's 3 different tools that we use to mobilize other investors. One is that we strategically share certain data. We're the first to use certain data that's been produced by social justice organizations. We're the first to use that in our own portfolio. Our data's primarily sourced in this way. So one is that we're sharing the data. The second is that we're giving thought leadership in the media and also to making the business case for social justice issues. And then the last is that we have these collective investor statements. So when we make that business case, we actually build a coalition of investors that's actually moving a particular issue forward. So a great example of this is the Racial Justice Investing Coalition. It's about 130 different organizations, over half a trillion dollars of assets. That work in concert. Some of those organizations don't own any private prisons and have completely divested from anything related to mass incarceration. Others do have stock, right, in prison companies or the major financiers, but we're working in concert towards shared goals. And one of our shared goals is decarceration of our society. So what we do is instead of writing shareholder resolutions, we get the group of people together that cares about this issue, whether they're divesting or they're engaging, and we become the big tent inside of which we make decisions about— we collectively make decisions about how are we going to deal with this issue. Some of us are going to be divesting, some of us are going to be investing and engaging. And I believe it actually takes all of us to make real change. So we see ourselves as the organizer, the mobilizer of those large coalitions. Another coalition that we put together was the one that is chiefly responsible on the investment side for ending forced arbitration for sexual harassment. We put together a database of 3,600 public companies in the United States and their status on this issue. And as a result, we watched the number of companies grow from under 20 to almost 400 companies that changed those policies, went on the record publicly. And, you know, before the law was signed in earlier this year that ended up disallowing forced arbitration for sexual harassment, any in public or private companies, that's now the law of the land. We had actually had over 10 million workers who no longer were subject to this particular corporate practice. Now, were we the first to check out companies in our portfolio on this measure? Yes. Were we the first to create the data set? Absolutely. Are we the only ones to use it? No. That's a big way that we organize and mobilize other investors is by sharing the data sets. So we're pretty well known. That was our forced arbitration data set. We were pretty well known for that. And also our racial justice investor data set is used actually across the world as the most comprehensive racial justice evaluating tool for public companies.

So is it fair to say that you're starting to see how you investing in companies that are already passing all of your screens, that that is causing other companies who don't pass your screens to basically look over there and say, oh, look at what these companies are doing, look at the impact that they're having, maybe we need to make some changes so that we could pass these screens as well? Are you starting to see that kind of connection yet?

Well, we do find, and I think this is actually really important to allow companies to make change. So we do find companies that make that change that we, you know, we did see companies going from like 20 companies that had this difficult practice of forced arbitration for sexual harassment. Very bad for the workers. We did see that change. It went from under 20 to 396 companies total. So we do watch change happen. What we do with our portfolio is we provide the North Star. We draw the line. We say, here's where the line is. This is where social justice movements said you should be standing on the issue of gender justice. The origin of the MeToo movement was about serial sexual harassment. And ultimately those movements asked investors to get rid of forced arbitration. And we followed through. It's about drawing the line. And yes, we do see that companies change their behavior over time. But Simply because we have a portfolio that doesn't have these problematic companies in it doesn't mean that we give up our seat at the table. One coalition that we have, it's a coalition, again, a half trillion dollar coalition of investors in support of ending the subminimum wage. This is where you can pay someone $2.13 per hour in the United States. This is disproportionately women, African Americans. It's a legacy of slavery. You can pay your CEO multiple millions of dollars, but pay the subminimum wage legally. We have a coalition of investors working on this issue. While we don't invest in the subminimum wage paying companies in our portfolio, inside of that coalition, we do have investors that still hold those companies and believe in engagement, but they have given us the power to represent them in those board meetings because we're leading that coalition of investors. So we don't fully give up our seat at the table. We're taking the kind of fight to a larger table. Bringing more investors to bear.

So let's go into a little more detail here on the investment lever. And you've got an interesting chart on your website where you talk about extractive to regenerative investment spectrum. So I'd love for you to talk a little bit about that. You've got extractive on the left, which is more traditional investing, conventional investing. And then on the far right, you've got regenerative, which is impact and living economy. Give me a little detail on how you use that in your portfolio.

Absolutely. Well, first, I just want to give credit that this idea of having a spectrum from extractive to regenerative was first introduced by Justice Funders as a guide for social justice-focused philanthropy. It was adapted for the investment industry. And basically what we mean is that traditional finance has basically said that they're neutral on social issues. They've thought of return as an individual investor's personal return is the only return that matters. And the returns that we're getting on a social level, like kind of those social impacts aren't something to be considered. And for us, and for many social justice movements, that way of making money in finance is considered particularly extractive. It relies on extracting unsustainably from the planet. It can often rely on exploitation, as I mentioned, with the subminimum wage, primarily for tipped workers in the United States. It relies on extraction and exploitation, and you can go less extractive. And where the status quo ESG often sits is really, well, we won't invest in as many fossil fuels and we will get the best fossil fuel company in the portfolio. And so that is less extractive. I do actually want to give status quo ESG like credit for that. That is less extractive. But where we fall is solidly in the next range over inside of restorative, where we're prioritizing our social impact. We are not just doing less harm. We're actually taking the power that we have as investors and using it for good. So we're still in the traditional finance system, but we're using the power that we have to mobilize investors to work for social justice. At the far end of the spectrum is the regenerative economy, and that's the one where instead of building personal wealth, your focus is on building community wealth. In both restorative, which is what we do, and in regenerative investing, you're really prioritizing that social impact. But inside of regenerative, that's a lot more of the private market investing that you see where communities are building wealth in the long term for themselves. I would say just as a side note that Adesina as a company is a regenerative company. We have a very public plan to transfer ownership to our staff, which, as I said before, 80% people of color, 70% women and gender expansive folks. So being worker owned And really subsidizing that transition is about building community wealth and being more regenerative. The way that we invest is in this restorative category because it's still investing kind of in the public markets and using our power in those public markets for good.

It seems to me that there's an analogy here in terms of up until I think it was 2018 or 2019, the investment world said the only objective of a publicly held company was to maximize shareholder value. And then the Business Roundtable came out and they said, well, actually, there's probably 5 other things that we need to take into consideration. We've got other stakeholders here that we have to consider. So shareholders are one. We've got the community, we've got the employees, we've got the vendors, we've got the, the planet, the environment, and so on. It seems like that's somewhat similar to what you're talking about here in terms of how you're coming up with your social justice investing, that we're not necessarily trying to give up return in order to impact these other areas. We think we can have both. Would that be fair to say?

It is absolutely fair to say. I feel like we've kind of had a blip in economic history in which Milton Friedman and others kind of brought in the idea that the shareholder return is all that matters. But that's not actually been our history of capital markets. Adding value and making something that is a public good is kind of the whole idea behind why you could garner public support, right, and public markets. And what's happened is that that as an idea kind of got distilled down into, well, the only way of measuring that is with shareholder return. But in a deeply interconnected world, and we know this now with technology now more than ever before, in any kind of interconnected community, the economics of extraction or exploitation can work in the short run. You can, you know, lie, cheat, steal, and kind of do better than someone else in the short run. But in a highly connected world, it's not a long-term strategy. And so what we find with our investment strategy is that those companies who are good corporate citizens and setting up their company to add value in a way that's really good for the world, These are our long-term players, and they show it throughout performance over time as well. So we actually think that it's a long-term risk advantage.

We've managed to avoid all kinds of issues, right, by having a social justice lens. So karma is a real thing here.

Yes, I believe so. And it's— yeah, and honestly, it's just as a result of being part of a highly connected world. It's like, you know, people let you kind of get over on them once, but not— it's not a long-term strategy.

Yep. So I'm sitting here in my office. I've got a sign here that says everything is connected. So absolutely, we're singing out of the same hymnal here.

Okay.

I want to talk about several articles that I pulled out here as I was preparing for our conversation today. One of them is a November 2nd Wall Street Journal article, and they talk about some research from Stanford University. And Stanford was, was trying to— there was a survey there trying to understand individual investors' views about ESG investing, and I'd love to get your comment on this. So they found that investors 58 years old and over were the least likely to support ESG objectives in general, and those between 18 and 41, so the youngest investors, were the most likely. And they also found that more than one-third of the younger investors said they would be willing to lose 11 to 15% of their retirement savings to encourage companies to have gender and racial diversity that mirrored the general population. But only 3% of the older investors said they would forfeit that amount. So a clear split here. Older investors like, no, I'm not going to give up any performance for this. The younger investors said, you know, a third of them said, or more than a third, I'd be willing to lose 11 to 15%. Any thoughts on that age split there?

Well, first, that particular article kept kind of hammering home this point that is just not true, that there's this direct trade-off between kind of like authentic impact and returns. That's not what we see at Adesina. It's not how our investment thesis is kind of proving itself out. So I just don't agree with that. But it's still an interesting question to ask someone about whether or not they would give up. Some of their personal financial return for a social return, if it really was, that trade-off is really what was necessary. And here's what I'd say about that. I think these represent different worldviews. I believe that there is a more full worldview of true return that includes your personal financial return and your social return. And I can make this matter, just you and I having a conversation. If you're doing really well in retirement, you've saved well, but your best friend has lost all of their money and you have a very close relationship with them, with them, wouldn't you agree that that automatically has an impact on your particular situation as well? Like, you actually care. You can't do the same things with them. You clearly don't want them to be homeless. When I kind of bring it down this way and say, I'm not just investing for some mythical numeric return in the future, I'm actually investing in creating a future. And do I want the kind of future where I can walk outside and breathe the air Yes. Do I want the sort of future where it's not just me that's okay, I actually live in a community of people who are okay? Yes. When we think this way, that's when we start to think more about true return or kind of a more whole return, which has always been a personal financial return as well as your social return, whether you're thinking about your best friend or what's, you know, who's polluting the air. I believe that the generational split here is that we went through a period of time with the Silent Generation and some of the earlier baby boomers. We went through a period of responding to social systems and like communism was the idea of it with like a hyper-individuality. And that hyper-individuality denies the kind of inherent connection that we have. So when people think about a trade-off, if there were a trade-off for impact, they're actually thinking that they're losing something. Like if you're just an individual and I have to give up some of my return, well, I'm not willing to give that much up if I'm not really a social creature. I believe these younger people, partly as a result of technology, partly as a result of living through pandemics and other things that illuminate how interconnected we all are, I think that they aren't necessarily seeing it as a loss. They're just moving something from the personal financial return side of the balance sheet over to the social return side of the balance sheet. So I really think it represents different worldviews. And I think that our hyper-individualism and free market capitalism has led us to really see— younger generations to see how interconnected we truly are. So, it doesn't feel like giving up return if that's what the trade-off is. It really feels like investing also in your social return.

A thread that I really hear coming through our conversation here this afternoon is somewhat similar to what is happening in the financial advisor business in that for most of its existence, being a financial advisor was about the investment portfolio. It was about trying to get the highest return possible with the least amount of risk and making sure someone's got enough money to retire. Well, in recent years, the past 10, 20 years or so, the definition of being a financial advisor has really expanded to be inclusive of, as you say, like the whole person in that it's not just about your money. It's about your life. It's about money as a tool. And how can we use money to help you live the kind of life that you want to live? And that life is not just, oh, I can go buy big fancy toys, but it's also about what kind of planet do I want to live on? What kind of environment do I want to be in? And so as you're describing it here, I think I see the same thing. That we've got a more expansive definition of what investing means. It's not just the pure returns, but it's about the impact that all of those investments and those returns are having, not just the financial impact, but all the other criteria that you talk about here.

Absolutely. In the end, the idea behind investment is to make more of something. Yes, I think this is a good idea. Make more of it. And I believe that people are just starting to more thoughtfully consider whether or not we want to make, you know, make more of the carbon emissions in the atmosphere that are bringing about devastating climate change, for example.

Yeah, so that word regeneration is, is, uh, one of the words we've talked about here. So that really ties in with regenerating and increasing life here. So let me take the other side, and I've got another article here, November 2nd, Washington Post, and they quote Representative Andy Barr from Kentucky. And in this article Representative Barr is quoted as saying, quote, my view is that ESG investing is a cancer within our capital markets. It is a fraud on American investors, end quote. So for the people that are anti-ESG, what is their viewpoint? What is their worldview? Why are they so anti on this?

Well, this— I think this is just another example of our highly fractured democracy and heavily politicized world. I do feel like the current controversy over ESG is both because you have some people saying like, this is terrible, it's a cancer, it's a fraud. They're saying that because it's working. So you get some people who are experiencing kind of ESG or values-aligned investing as actually working to influence the behavior of public companies that really end up having control over so much of every one of our lives. And they're kind of experiencing that, seeing that. And you also have the other side of the conversation where there's all these people very concerned about greenwashing and impact washing, which is something that happens. But it's interesting how in these two different camps, you're having kind of two different conversations about how it's working almost too well, according to some people, and not working at all according to others. In the camp of it's working too well, I really do believe that a lot of the anti-ESG sentiment came out of many of our politicians and politically appointed figures that had roots in the oil and gas industry. They experienced oil and gas in 1980 being 30% of the S&P 500. Close to 2020, I believe they were under 3%, right, of the S&P 500. So they experienced a big loss in their power. And for financial reasons, there's a lot of fossil fuel divestment that's happened.. And I know that there were many people with those connections who are around this whole Department of Labor standard that, that had come out around ESG and is now in the process of being rolled back. And it was specifically because fossil fuel divestment efforts kind of in this world of values-aligned investing and ESG had worked so well, and efforts to kind of change what the fossil fuel companies were working on had worked so well, that they actually feel like their political aspirations are being undermined. And I think that's where your— the complaint comes from, is that this is actually something that's shifting how people invest. But ultimately, I have to tell you, taking into consideration whether or not what you are doing is sustainable, that is as pure free market capitalist as I could ever think of. It's good business. And ultimately, if you are an investor, you really want to be delivering long-term returns. Most investors— I mean, I know that we have our high-frequency trading folks out there, maybe even a few related to that industry listening to this podcast. But for the most of us and most financial advisors, you're trying to deliver long-term returns, and that's going to happen from companies that are managing long-term risks like climate change, like social unrest, like worker health and safety. These are all the types of issues that social justice movements are focusing on and that we focus on at Athena.

So let's take fossil fuels for an example here. I'm going to be generous and say that I think most people would agree that fossil fuels causes problems for the environment, it's not good for the planet, and long term we probably need to wean ourselves off of that. Where I think there's a conflict is that you've got one group of people, social activists, who say we got to end fossil fuels today, and you've got other people say that's going to be a disaster. You know, there's got to be some transition. So it seems like there's a tension between those who say we got to stop fossil fuels today and those who say we need some transition plan. Is that part of the problem here, is that most people would agree on the ultimate outcome that we need to achieve, but there's a big gap between the time and the transition plan to get from here to there?

This is something social justice movements do a lot better job of understanding than investors tend to. It actually, in order for us to make the largest change of our generation, which is to move away from a carbon-based economy and into one that's renewable, sustainable, and rooted in justice, it's going to take all of us working on it. It's going to take those of us who are completely divested from fossil fuels. It's going to take the asset managers. That are changing board seats at fossil fuel companies, getting them to focus on renewables. Part of the trouble is I believe that we've sometimes broken down into factions about like what's the best method. And honestly, my answer is all of them. I happen to be in the camp that goes with, you know, our North Star being one where, you know, if you want a portfolio that does not participate in the extractive and exploitative practices that are so common,, in very large companies, you can invest with us. You know, we have an exchange-traded fund, and so even if people don't have a lot to invest, it's very democratized and easy to access.

I think what you said is really interesting because you say, hey, I think all approaches are appropriate. You've got some people who say, hey, we need to divest today and get off of fossil fuels, and others say no, 50 years from now. Okay, but what happens, I think, then is We have the tension. We've got both ends of the poles here, and you need those strong poles, I think, to get the right tension so that there's wisdom in crowds. I think you could say hopefully we'll get to the, the right speed and the right pace so that we make the transition to save the planet, but we also do it in such a way that we don't throw everybody out of jobs because we can't create green jobs fast enough to replace the fossil fuel jobs that we're losing. So, you know, and throw the economy in the tank, which is going to hurt the people who most need the help, you know, that we're trying to help here. So I kind of get back to this word tension. And I think that's the issue. And hopefully, with everyone at different points of the spectrum, that that creates enough tension that we get to the right answer at the right speed.

Tension is the spark of life.. And I think that it takes those who are standing in a position of we're completely out of fossil fuels. That group of people is pulling along the folks that for one reason or another can't or won't get out of fossil fuels yet. This is a collective effort. And the idea that we can do everything all in one fell swoop is just misguided. I wish I could give credit. I wish I knew who said this, but they were saying when it comes to climate change, we don't have a silver bullet. What we have is The silver buckshot. So it's like throw everything. If we're changing like the board members at the fossil fuel companies, and you know, many people saw that a recent change that happened at the board of a major fossil fuel company as a huge win and an argument for engagement. Absolutely, it's an argument for engagement. And let me tell you, if the stock price hadn't been weakened enough for that engagement to be made possible by those who were divesting, then we wouldn't be right, in a place to be able to actually pressure those companies to do what's in the best interest of all of us long term. So the most important message that I have for all of us in the values-aligned investing space on the side of well-being for people on the planet is that we have to work together. We can't get so attached to one of our particular methods. I love our method. I think our method works. It proves itself out in returns also. But that doesn't mean that I believe other methods are not also absolutely critical in making the transitions that we need to make as a society.

I think this third article that I want to touch on ties in exactly with what you were just saying here. And let's bring BlackRock into the conversation and Larry Fink, because he's certainly been in the news about ESG investing. So there's a guy named Terry Keeley, and he had been an executive at BlackRock, and he was focused on the ESG work that BlackRock was doing. And he just came out with a new book and Basically, he said that the ESG model doesn't really work. And basically what he was trying to argue is that investors should shift money away from ESG indexes and toward companies with persistent environmental and social problems and engage them to change. In other words, he's saying give money to the polluters and force them to clean up their act. Now, I think we touched on this a little bit earlier, That's not your strategy. But what I think I just heard you say a moment ago, it's like, let's do all strategies.

Yes.

We're looking for all the strategies. Everyone has their angle.

Okay. So, it sounds like you'd probably agree with that. And there's this idea that ESG, you know, it's not working. It really depends on who you ask. Who's your audience? I believe that what's very particular about what we do at Adesina is we go to the communities we intend to impact and ask them what they would have investors do. And then we listen to what they say. We both do it in our own portfolio. And we mobilize other investors, give them the tools, the education, the leadership that they need to follow suit and to work alongside us. I think that saying that ESG doesn't work is a little like asking for a fruit salad and then, you know, saying that it tastes terrible when it's made entirely out of onions and bell peppers. That's not a fruit salad. So I believe that if you intend to make impact, you should go to those most impacted and make sure that the ingredients to your process reflect that. After the MeToo movement began and investors wanted to focus on gender justice, they didn't go to the source of the problem. The MeToo movement was all about serial sexual harassment in the workplace. In finance, we're in an echo chamber talking to ourselves about how to address social issues. Finance people decided that it was women on boards. Why? Because that was the set of data that was around and seemed somewhat relevant to the issue. It involved women, so did serial sexual harassment. But it really didn't do anything to kind of end that, the reason for MeToo coming into being. Going after forced arbitration for sexual harassment, that's a direct impact. By the time we stopped doing our work on the database because we were advising at the highest levels of legislation and policymaking, we had over 10 million people that were outside of these private forced arbitration processes that were silencing victims and allowing serial predators to keep preying in the workplace. Over 10 million employees could then be out public about it, take their harasser or abuser to court in a more fair and public process. I think people saying ESG doesn't work, it depends on what your intended outcome is and who you ask. And that's what I believe is the core difference in social justice investing. Go to the community of intended impact and ask them what they would have you do.

And then listen, get out of the finance echo chamber. All right, well, Rachel, as we wrap up here, If someone's listening to this and they say, hey, I want to be more thoughtful, I want to be more impactful in where I'm investing my money, what are some of the best ways that people can invest in this area? So tell me about what you guys are doing there at Adesina, and then beyond Adesina, what are some other places where investors should be looking?

Well, I think that there's this misconception that in order to make change you need millions of dollars, but every day investors can vote with their money in any number of ways that results in systemic change. So One of those is to start seeking out investment vehicles with low-cost entry, like an exchange-traded fund or an ETF. Adesina has the Adesina Social Justice All-Cap Global ETF. The ticker symbol is JSTC. There are any number of ETFs and mutual funds coming forward, the newer ones. You can't limit yourself only to the ones with 5-year track records. You're going to have to find another way of evaluating whether or not you believe they have investment acumen if you want some of the new solutions that are out there. So I would say, don't limit yourself to antiquated standards of due diligence. If you're a financial advisor, kind of go looking for some of the newer funds, make sure that you're accessing those with a lower cost to entry, and then taking advantage of your right to vote your proxy as shareholders, like check out how your fund is voting the proxies, or if you hold the stocks yourself, like really pay attention to what the votes are. It's your chance as an owner of that company to shape that company's behavior.. And to do that in alignment with social justice, anyone can subscribe to the Adesina newsletter and we send out information on a very regular basis, whether you're investing with us or not. Our point is to mobilize investors. We give lots and lots of ways to ultimately align with those social justice movements. But in the end, you can let us do it for you. Or if you're wanting to invest for impact, just remember those who are closest to the problems farthest from the power are also those who are closest to the solutions. We just need to connect them with those in power.

And as an investor, you have power. Excellent.

All right.

And remember, everything is connected. Absolutely. All right. Well, Rachel, for folks that want to connect with you personally, what would be the best way for folks to stay in touch with you?

Well, the easiest way is to sign up for the Athena newsletter. If you text the word justice to 55444, that will sign you up for the Athena newsletter. About every month or so, we send out really critical insights about the intersection of social justice and financial markets. So that's one way to stay in touch with us. You can also follow me or @Athena on Twitter, LinkedIn. There's really wonderful communities in both of those places. If you're looking to kind of vote with your money and have a positive social impact on the world, there's wonderful communities to participate in.

All right, Rachel. Well, thank you very much for being on the show today. Thank you for having me. A few years ago, I attended Anthony Scaramucci's SALT conference, and I heard Lynn Forrester de Rothschild speak. She related a story about attending a town hall meeting for a large insurance company, and during this meeting, a 30-year-old woman stood up and said, quote, "I want you to invest my money in a way that creates the world I want to retire to," end quote. Now, that idea has stuck with me ever since. And what I heard from Rachel today, this idea that everything is connected, that we have to expand the definition of what it means to invest to include not just the ROI, but what I'll call the ROL, the return on life. So ask yourself, how does the way you invest affect or create the kind of world you want to live in, or the kind of world you want to leave to your kids and your grandkids. How you invest can shape the world you want to see, and Rachel and her team are leading the way. All right, that's all for today. Make sure you like and share this podcast through your favorite social platforms, and for more great podcasts, visit us at barons.com/podcast.

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