In 2015, we started Invest Your Values with a simple but radical idea: investors deserve to know what companies are hidden inside their mutual funds and ETFs. Every month, our platform analyzes more than 6,000 funds, making the invisible visible. Investorsâfrom retirees checking their 401(k)s to endowments managing billionsâuse the data to uncover risks and align their investments with their values.
Over the past decade, this work has grown into seven distinct pillars: Fossil Free Funds, Deforestation Free Funds, Prison Free Funds, Gender Equality Funds, Weapon Free Funds, Tobacco Free Funds, and Gun Free Funds. Together, these pillars have provided clarity at a time when investors increasingly want their money to reflect not only their financial goals but also their values.
Today, we are adding a new pillarâone that responds to a growing and urgent demand from communities, workers, and investors alike: Social Justice Funds.
Why social justice matters to investors
For years, social justice was dismissed by many investors as âtoo politicalâ or âoutside the scope of fiduciary duty.â But ignoring systemic inequality has proven costly. Companies that fail to address racial inequity, exploitative labor practices, or community displacement often face lawsuits, reputational crises, regulatory penalties, and consumer backlash. These arenât abstract risks. They hit the bottom line.
After George Floydâs murder in 2020, corporate America issued billions of dollars in promises to advance racial equity. But many of those pledges remain unfulfilled. Investors are left wondering: Which companies followed through, and which retreated once the headlines faded? The new Social Justice Funds pillar helps answer that question.
By analyzing companies on their records of advancingâor underminingâequity and justice, we are equipping investors to distinguish genuine leadership from performative marketing. Just as with our other pillars, this isnât about ideology. Itâs about transparency, risk management, and ensuring that capital supports companies that treat all stakeholders fairly.
What Social Justice Funds Measures
Social Justice Funds is the first tool of its kind. For the first time, multiple datasets on equity and justice are being brought together into a comprehensive scorecard that allows investors to screen funds against the most pressing social issues of our time.
This new tool draws on:
- As You Sowâs Racial Justice Scorecard of 3,000 companies
- As You Sowâs Workplace Diversity Scorecard of 3,000 companies, the most robust disclosure dataset across race, ethnicity, and gender
- LGBTQ+ data from the Human Rights Campaign (HRC)
- Equileapâs Gender Equality Scorecard
- As You Sowâs Prison Free Funds and Weapon Free Funds, tracking private prison operators and military weapon manufacturers tied to systemic racism and injustice
By integrating all these sources, Social Justice Funds gives investors, for the first time, a unified and data-driven way to evaluate whether their investments are perpetuating or dismantling inequities.
Real-world results
The evidence linking diversity, equity, and performance is clear. Social Justice Funds builds directly on our 2023 report, Capturing the Diversity Benefit, which showed a statistically significant correlation between a diverse workforce and stronger outcomes on eight key metrics, including enterprise value growth, free cash flow per share, return on equity, or ROE, return on invested capital, or ROIC, and long-term revenue growth.
The new fund results align with previous research, showing a statistically significant positive correlation between social justice grades and long-term financial performance.
The takeaway is simple: companies with diverse teams outperform. Investors who ignore workforce equity are leaving money on the table. Social Justice Funds translates this research into a practical, portfolio-level tool.
Proven model
Our decision to build Social Justice Funds builds on ten years of experience. When we released Fossil Free Funds, skeptics said investors wouldnât care about carbon exposure. Today, fossil-free portfolios are mainstream. When we exposed hidden prison investments, faith communities, universities, and individuals moved billions of dollars to funds that aligned with their values.
The lesson is clear: transparency changes behavior. Once investors know what they own, they make better choices. Fund managers, in turn, respond by creating new products. Social Justice Funds is the next step in that evolution.
Market imperative, not niche concern
Some critics claim social justice is a niche concern. But Millennials and Gen Zâset to inherit tens of trillionsârank equity, fair labor, and justice among their top priorities. They donât separate their values from their money.
At the same time, institutional investorsâfrom pension funds to universitiesâface growing pressure from students, workers, and beneficiaries to prove their endowments are not perpetuating harm. Fiduciaries ignore these demands at their peril.
And for companies themselves, the message is unmistakable. Investors are watching. Portfolios are being screened. Those that cling to discriminatory practices or community exploitation will increasingly find themselves excluded from the flow of capital.
From transparency to transformation
Social Justice Funds is not the end gameâitâs a beginning. The purpose of Invest Your Values has always been to democratize information and put power back in the hands of everyday investors. With this new tool, we hope to spark a wave of accountability, where companies are judged not only by their quarterly earnings but by how their treatment of workers, communities, and society impact those earnings
When you buy a share of a fund, you buy a share of the future. Do you want that future to be built on exploitation and inequityâor on justice and shared prosperity? With Social Justice Funds, investors can make that choice with clarity and confidence.
Ten years ago, we set out to give people the power to align their investments with their values. Today, that mission is more urgent than ever. With Social Justice Funds, we are widening the lens, sharpening the focus, and ensuring that justice is not just an aspiration, but an investable reality.
Andrew Behar is the CEO of As You Sow.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
