Diversity & Inclusion

Flexing our Collective Power: Rachel J. Robasciotti on Investing for Social Justice

It’s Women’s History Month, so we sat down with Rachel Robasciotti for a conversation about identity, social justice investing, and making room for people to change.

For our readers who don’t already know about you and your work, let’s start with the inception story behind your firm, Adasina Social Capital, and your focus on advancing racial justice via investment.

Adasina began as a social justice investing strategy for wealth management clients. Implementing that strategy resulted in an overwhelming amount of feedback, which revealed an immense need for honest and accurate data regarding racial justice. Furthermore, it became evident that investors and advisors were eager to have greater access to a social justice vehicle such as ours. Adasina Social Capital was founded in 2020, which happens to be the same year when there was a big racial justice reckoning in the United States. It also happened to be the same year that we published Adasina’s Racial Justice Investor Dataset, which made the cover of the business section in the New York Times in an article highlighting how investors can avoid perpetuating systemic racism.

How were you looking at the issue differently than how others had?

At that time, investors were looking around and asking, “do we have data on the diversity of boards?” To be clear, board diversity is important for inclusion, and representation. However, the issue of racial justice that was brought to light by the death of George Floyd was not addressed through board diversity.

According to the leaders of the racial justice movement it's the carceral system, it's mass incarceration in the United States, and we need investors to have an even more tightly focused intent on moving capital out of those sectors and toward more solutions.

Being in public markets, the very least that we can do is identify which companies are participating in systemic racism. It goes beyond owning and operating a private prison. If you look at our Adasina Social Justice investment Criteria, it's not only prison involvement, but it's also prison funding, including aspects like prison labor, money bail involvement, immigrant detention, and citizen and immigrant surveillance.

We basically said, “This is our intellectual property, and we're sharing it intentionally.” We had several other components to our approach to racial justice. But this component of decarceration came directly from the communities most impacted, and they were like: “Listen, this is what investors should be focusing on. This is what good looks like. Show the world how it's done.” So that's what we did: by taking the suggestions of our partners into account, we created a comprehensive racial justice list for public markets that focuses not only on decarceration, but also on land rights, self-determination, equity and inclusion, and fair dealing - making it the most widely used list of its kind.

What are investors still getting wrong today about centering justice in investing?

First off, they're still talking to each other about data they already have. I'd say that Adasina wants competitors.

If I could scream from the mountaintops of all of finance, I would say stop talking to each other, get out of your office, and go talk to the people that are most impacted. Look for organizations that are led by, and doing work on behalf of, communities that are most impacted. This includes not just those addressing racial, gender, economic issues but climate as well. Ask who is most impacted by climate change; what solutions might they have that we haven't thought about? Given the prevalence of greenwashing, impact washing, and justice washing in the finance industry, it is essential that investors engage with those most affected by these issues. We cannot hope to bring about the necessary changes in our world without leveraging our collective power and working together. Therefore, it is imperative that investors communicate with and listen to those who are directly impacted.

Rachel Robasciotti

Rachel Robasciotti

You're a woman, Black, and a member of the LGBTQ+ community. To what extent have these markers of identity been a source of strength or friction for you in your career?

Having worked as an asset allocator for a considerable length of time, I am rather familiar with the way asset allocators and finance professionals think. In assessing financial data and returns, we usually view deviations as a source of risk and an indicator of potential errors. When something appears out of the ordinary, it immediately raises a red flag and prompts us to ask, “What happened here?” Deviations, in this sense, are seen as a warning sign and can alert us to any potential problems that may be present.

When the vast majority of asset management firms are owned by white men, and yet the population of the United States is largely composed of people of color and women, as reported in the last census, I am clearly an outlier when I appear as an asset manager. This is evidenced in the questions I'm asked and the length of the due diligence engagements I participate in.

The reality is that due diligence has enabled those who already possess assets to retain control. This has cemented a system of racial and gender bias in asset management. Unfortunately, these checklists are not improving financial performance but instead preventing women and people of color from having a stake in the asset management industry - which is especially concerning when considering the lack of justice that these groups often experience.

You know, it takes one more question. That's what's sad. What I mean by that is you can start off with “Do you have a traditional performance track record? Then, rather than that being exclusionary, the next question should be: “What viable alternative might you have to a traditional performance track record that would help me assess your ability to manage a portfolio?” It just takes one more question. That's the part that frustrates me to no end.

Have you seen progress being made or is it still early days?

I have, because I've been in the industry since 1999. Back then, casual homophobia was overt and somewhat angry. Thankfully, I was not alone. When I first began working, there were already other out queer people in my workplace. What many people who are not part of a marginalized community fail to understand is that even if they're not mistreating me directly, the way they mistreat other visibly queer people affects me too. It makes me feel unsafe in the workplace and makes me very guarded. Similarly, I've had people say horrible things about Black folks in conversation with me because they assume that I'm Latinx.

However, if we truly wish for things to be different, we must be open to allowing people and corporations -- that are just big collections of people -- to evolve. While it's understandable to feel anger, offense, and frustration towards particular individuals or organizations, it's important to provide them with the opportunity to grow and learn from their mistakes. Constantly attacking and demonizing them is not the answer, as it will only lead to alienation and resentment. On the other hand, sharing your personal stories can be an effective way of connecting with people on a meaningful level.

Megan Kashner is Co-founder of Colorful Capital and a professor and Director of Social Impact at Northwestern University's Kellogg School of Management. William Burckart is Co-founder of Colorful Capital and CEO of The Investment Integration Project, an applied research and consulting services firm that helps investors manage systemic societal and environmental risks.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Colorful Capital

Founded by Megan Kashner and William Burckart, Colorful Capital is bringing capital support and scaffolding to enterprises founded and led by members of the broad LGBTQIA+ community whose potential and investability have been routinely underestimated by mainstream capital providers. By filling financing gaps and overcoming detrimental heuristics, we intend to bridge divides and strengthen economic opportunity. Diverse gender and sexual identity and expression is too often a barrier to access to capital and inclusion in traditional financial market flows. By investing in, supporting, and celebrating members of our communities and the ventures they build and grow, Colorful Capital will provide opportunity, spotlight, and a pathway to success for promising ventures and their fabulous leaders.

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