Socially responsible investment (SRI) funds can take on a variety of mandates. They often look to invest in companies that do business in an environmentally responsible manner and that pay attention to fair supply chain practices. Still, others make a point not to invest in companies that are involved in the sale of tobacco, weapons, or gambling. Less known is that many of these SRI funds have also made it their business to invest in companies that strive to empower women and other underserved cohorts in the workplace. Below is a list of a few that do just that.
Domini Social Investments
Domini Social Investments, LLC. looks to invest in companies that are committed to workplace diversity. That means they expect to see a substantial representation of women and minorities in management-level positions, including as senior line executives, when evaluating a company.
Its funds also look to invest in companies that provide an open work environment for minorities, LGBTQ+ (lesbian, gay, bisexual, transgender, and queer, employees). Additionally, it seeks out companies that offer sexual harassment training and programs that promote respect for diversity.
In that vein, Domini stays away from companies that have a history or record of controversies related to lack of diversity, sexual harassment, or discrimination. Domini’s Proxy Voting Guidelines note that it will vote against boards of trustees that do not include women or people of color.
Calvert Investments has long been an advocate for diversity and the promotion of women worldwide. In 2004, in partnership with the United National Development Fund for Women (UNIFEM), it created Calvert’s Women's Principles (CWP), which defined a global code of corporate conduct on empowering and investing in women.
In 2010, those principals were used as the basis for the UN's Women's Empowerment Principles. The fund was also instrumental in developing a model charter language on board diversity, recommending companies abide by it when creating an independent and inclusive board.
Calvert made much headway on this front in 2010, when it filed 14 resolutions on women and diversity in the workplace. As a result, many companies have since changed their board of director’s selection criteria to include race and gender diversity. Additionally, Calvert has been advocating for women’s empowerment by actively voting its proxies, initiating shareholder resolutions and holding discussions with corporate management.
Neuberger Berman’s NB Socially Responsive Fund (NBSRX) looks to invest in companies that are ahead of the fray in promoting diversity in the workplace. To that end, the fund seeks corporations that make a point of promoting women and minorities to senior-level positions, as well as putting them on their boards of directors. The fund also likes companies that offer diversity training programs and that offer support groups. It makes an effort to buy stock in companies that purchase goods and services from women- and minority-owned firms.
Additionally, this fund looks for companies that have taken broad and innovative steps toward hiring and training women and minorities and that have a reputation for promoting diversity in the workplace. The NB fund also avoids investment in companies that have recently been brought up or named in discrimination lawsuits related to gender, race, disability, or sexual orientation. NBSRX is down 7.9% year-to-date 2022.
Parnassus Investments is devoted to finding those companies that promote diversity in the workplace and that make it a priority to have women and minorities represented at all levels of the company ladder, in particular at the executive level.
The fund managers make a point of voting for resolutions that aim to improve the representation of women and ethnic minorities in the workforce and to increase diversity and equal pay for equal work. The firm's oldest offering, the $851 million Parnassus Fund (PARNX), which was created in 1984, is down 16.33% year-to-date 2022
Pax World Investments
Pax World Investments has been promoting women’s empowerment and diversity through investing for years and has been an advocate in disseminating the mounting evidence that gender diversity has positive financial consequences. Its Pax World Global Women’s Equality Fund (PXWEX) focuses on investing in companies that continue to advance gender equality and women’s empowerment.
The Pax funds managers always make sure to vote proxies, file shareholder resolutions, and engage in corporate dialogs that are geared toward issuing corporate diversity and women’s empowerment. Pax's flagship fund, which went live in 1971 and now has $2.5 billion in total assets, is the Pax World Individual Investor (PAXWX). It is down 6.11% year-to-date 2022.
Praxis Mutal Funds
Praxis Mutual Funds make sure to review a company’s core social values and issues related to women’s empowerment before investing in it. The funds’ managers pursue shareholder actions against practices of modern slavery, such as the trafficking of women and girls.
In 2010, Praxis engaged in a shareholder dialog with hotel company Wyndham Worldwide Corp. (WYN) to push for better training and procedures to be put in place that would help stop human trafficking from taking place at the company’s hotels. Praxis also took part in shareholder conversations with Delta Air Lines, Inc. (DAL), resulting in Delta’s signing of the tourism Code of Conduct, an initiative designed with the ECPAT International, a global network dedicated to protecting children from commercial sexual exploitation.
The code works to protect women and girls from sexual exploitation in the travel and tourism industries. Praxis' flagship fund, the Intermediate Income A (MIAAX), was created in 1999 and is down 1.33% year-to-date 2022.
Walden Asset Management
Walden Asset Management strives to invest in companies that offer vibrant equal employment opportunity programs and policies and that show diverse management teams and boards of directors. It offers a variety of equity, debt, and balanced funds, which focus on investing in companies that offer above-average employment policies with benefits packages and devotion to a work-life balance.
It avoids companies that show a history of discrimination. Additionally, Walden dedicates time to active shareholder engagement initiatives and advocates for inclusive non-discrimination policies.
What is modern slavery?
Modern slavery is a system of severely exploiting people for financial gain, a practice found in manufacturing, domestic service, farming, and other fields. From the outside, a person subject to slavery may look like he or she is doing a job under normal circumstances, but they are being controlled by their employer with violence or other means, such as confiscation of a passport, being forced into debt, or possible deportation.
What Is a socially responsible investment (SRI)?
Socially responsible investing (SRI), also known as social investment, is an investment that is considered socially responsible due to the nature of the business the company conducts. A common theme for socially responsible investments is socially conscious investing. Socially responsible investments can be made into individual companies with good social value, or through a socially conscious mutual fund or exchange-traded fund (ETF).
What is a diversity score?
What is an exchange-traded fund (ETF)?
An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other asset, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.
What is the Civil Right Act of 1964?
The Civil Rights Act of 1964 was landmark legislation that led to other civil rights laws over the years. How did it come about? By the early 1960s, the civil rights movement had brought national attention to racial barriers in education, public transportation, and use of public accommodations, such as restaurants and theaters. In 1963—in the wake of harsh treatment of peaceful protestors by the police and the murders of civil rights activists—President John F. Kennedy called for a meaningful civil rights bill. His efforts were filibustered in the Senate. After Kennedy's assassination that year, his successor, President Lyndon B. Johnson, took up the cause. With the support of activists such as Dr. Martin Luther King, Jr., the bill passed in the House and Senate in 1964.
The Bottom Line
If you are looking to invest in companies that promote gender equality and diversity, the creation of open workplaces for minorities and gay and lesbian employees, promoting minority-owned business, and opposing modern slavery, there are many SRI funds to choose from.