Resource Guide for Responsible Finance Webinar #3: Sustainable & Impact Investing

As part of Third Act’s Banking on our Future Campaign, we’ve organized a 4-part webinar series on Responsible Finance with educational resources and experts to help people move their money away from fossil fuels and into investments to support clean energy, healthy communities, and climate solutions.

NOTE: THIRD ACT IS LEGALLY PROHIBITED FROM GIVING INVESTMENT ADVICE AS WE ARE NOT CERTIFIED INVESTMENT ADVISORS. WE HAVE INVITED FINANCIAL PLANNING PROFESSIONALS TO SHARE THEIR EXPERTISE. PLEASE NOTE THAT THIRD ACT DOES NOT HAVE ANY CONTRACTUAL RELATIONSHIPS WITH THE SPEAKERS, AND WE ARE NOT ENDORSING THEIR SERVICES. THESE ARE EDUCATIONAL EVENTS AND RESOURCES WHERE WE ARE SHARING INFORMATION FOR YOU TO IMPLEMENT IN YOUR LIVES IN WAYS THAT FIT WITH YOUR PERSONAL STRATEGIES, RISK TOLERANCE, AND FINANCIAL NEEDS.

This Resource Guide accompanies Responsible Finance Webinar #3: Sustainable & Impact Investing and provides the links to resources shared during the webinar. You can watch a recording of the webinar here. To find more recordings and resources from this webinar series, visit the Responsible Finance Resource Collection. Speakers from the event include: Andrew Behar, As You Sow; Rachel Robasciotti, Adasina Social Capital, Kristin Hull, Nia Impact Capital, and Timothy Yee, Green Retirement, Inc.

Some of the most asked questions and the resources shared from Event #3 are compiled below.

Q: What is an ETF? What is a mutual fund?

1. Understanding Exchange-Traded Fund
2. Understanding  Mutual Funds 

Q: How to find investment funds that are sustainable and socially responsible?

As You Sow provides several tools to help you evaluate what different types of funds are invested in across a range of criteria: fossil fuels, deforestation, gender equality, guns, tobacco, and other important issues. If the websites below are new to you, please check out the library of tutorial videos to learn how to use some of the tools.

Find and evaluate investment funds using these tools:

1. https://FossilFreeFunds.org/ 
   In addition to showing funds’ investments in nonrenewable resources (oil, gas, etc…), this site also has a “Clean200” tab at the top, which shows the top companies investing in sustainable communities and industries (clean-tech, renewable energy etc…).
2. https://InvestYourValues.org/
   Please note, this resource is updated monthly
3. https://charts.ussif.org/mfpc/
   To find the resources you need, click on “Screening & Advocacy”

Q: How to choose investments that align with your values?

Finding investments that line up with your values, personal risk tolerances, financial needs, timing, and more are very personal decisions. It may not be easy, but there are more and more companies and funds to invest in that show a lot of promise and performance. A variety of investment firms, including ones featured on this webinar – Adasina Social Capital and Nia Impact Capital – are doing the work to find and evaluate companies that align with environmental, social justice, and racial and gender equality values.

You may want to consider index funds, funds’ fees, capital gains tax issues when moving investments, and how to move among funds. If your money is in a 401K you can move your money among funds online; if the funds are in an IRA then ask your financial advisor.

These resources were shared during the webinar where you can learn more about investing in companies and communities that support health and sustainability:

1. How racial and social justice are central to reaching climate “net zero” goals. Adasina Social Impact contributed to the Intentional Endowments Network’s report, “Leading with Justice: Net- Zero Investing and Conversations on Climate Justice.”  
2. “Purposeful retirement” from Nia Impact Global, including a powerful video about what investments are financing. 
3. Impact investing at the Money Doula blog.
4. “5 Steps to a Sustainable Retirement Plan” from As You Sow. 

Q: What is Shareholder Advocacy and how can I influence companies on climate change and social justice?

As an investor and shareholder you actually have a lot of power. To use your power, you need to raise your voice and make your concerns visible, individually and collectively. Tell your financial advisor, asset manager, mutual fund, or employer-managed retirement fund about why you sold one fund or bought another. Vote your proxies.  If ten or one hundred people who own shares in mutual funds do the same it changes decisions at large asset managers. Climate-related shareholder resolutions are growing and working and there have been some big wins in the past couple of years. You can help keep up the pressure!

Things you can do:

1. Use As You Sow’s shareholder advocacy tools and shareholder resolution tracker.
2. Ask your mutual fund asset manager for the right to “vote pass-thru” and vote your proxies. This is happening at Fidelity and BlackRock. So, vote for climate transition shareholder resolutions at those two institutions.
3. If you are with Morgan Stanley (which purchased Calvert socially responsible funds), you can write to your fund managers and hold them accountable for how they invest, how they name their funds, and especially how they vote their proxies.
4. Check out FixMyFunds.org for more tools you can use to speak with your asset managers.

Q: Are there examples of sustainable and impact investing funds?

If you rewatch the event, our speakers shared information about a variety of sustainable and impact investing funds. Below are a few that were mentioned:

Adasina Social Capital

Adasina Social Capital is committed to making large-scale, systemic change through investments in public markets. Unlike most investment firms, Adasina is founded and led by LGBTQ+ women of color and has a diverse team of people from non-traditional backgrounds who work closely with the communities they intend to impact – aligning investors with social justice movements. Beyond creating their own investment criteria – Adasina Social Justice Investment Criteria (“Criteria”)  – Adasina mobilizes investors to drive long-term impact through industry campaigns and education. The Adasina Public Equities Portfolio Management Team (PE PMT) starts by evaluating more than 9,000 companies for alignment with the Criteria, selecting about 600+ companies for its Adasina Exchange-Traded Fund. The ETF is available on Morgan Stanley Wealth Management’s Investing with Impact Platform. Sign-up for the Adasina newsletter here, and contact at: ​​info@adasina.com.

Nia Impact Capital

Nia Impact Capital is a women led firm investing at the intersection of environmental sustainability and social justice. Nia carefully chooses companies that align with one or more of their six solutions themes (sustainability/climate, healthcare, natural and organic food, sustainable/affordable transportation, education/communications/financial services, affordable housing) and the UN’s 17 Sustainable Development Goals, based on their Environmental, Social and Governance (ESG) impact, and includes only those companies that have women in leadership positions. Nia actively engages with companies in their portfolios, holding them accountable to the most inclusive, sustainable, and ethical business practices. Nia is a certified B-Corp and Gender Equity Now certified. They have a variety of investment vehicles and launched The Nia Impact Solutions Mutual Fund in May 2022. Contact: Info@niaimpactcapital.com.

Change Finance

Change Finance builds performance-oriented investment products that seek to promote a more just and sustainable world. Its flagship Index Exchange-Traded Fund, the Change Finance Diversified Impact US Large Cap Index is tracked by the AXS Change Finance ESG ETF (CHGX).

Index Funds

1. Calvert has historically been a socially responsible passive, index fund. Since they were acquired their scores have fallen. You can look at Calvert’s scores here. Look at Alpha and “out performance.”
2. Index funds also have fossil free alternatives. Using As You Sow’s tools (see above) you can compare S&P 500 (SPY) and S&P500 without fossil fuels (SPYX). EEM is emerging markets; EEMX is same without fossils. ACWI is all world; CRBN is same without fossils. An index is a large list – you can have an index fund that weights certain companies to zero. 
3. VFTAX, the Vanguard FTSE Social Index Fund gets a B or C ESG rating.

Target Date Funds

Using As You Sow’s FossilFreeFunds tool, you can look up the NSFKX as one ESG target-date fund. It gets a “C” score, which is the best target-date fund score on the market at this moment.

Q: How can I find a Responsible Finance Investment Advisor?

Here are a few resources for finding an investment advisor that aligns with your values:

1. Forum for Responsible and Sustainable Investment and its members
2. ValuesAdvisor.org curated collection of experts and advisors
3. How to Align Your Money With Your Values blog by Timothy Yee, Green Retirement, Inc. and Gregory Wendt, Stakeholder Capital
4. Green Retirement, Inc.