By Luke Seidl
The past 12 months have been a big opportunity for investors interested in Community Wealth Building and Social Equality.
Judging by the growing number of product offerings, there will be many new ones in the next 12 months.
In this blog, we highlight a few of the opportunities. To see our full analysis, please click here.
Focus on Income Inequality
Almost 19 million renters and homeowners are “severely cost-burdened,” meaning they pay more than half their income toward housing. Growing evidence points to housing as a main driver of wealth disparity in America.
In response, Community Development Finance Institutions (CDFIs), Credit Unions and banks, private equity and real estate fund managers are raising capital to increase the supply of affordable housing.
Inclusive economic growth should be aided by a new program in the Tax Cuts and Jobs Act of 2017 that incentivizes long-term investments in distressed communities designated as “Opportunity Zones.” The Act will enable investors in qualifying funds to defer, and in some cases, reduce taxes on realized capital gains.
Human Rights and Justice
Sustainable investors continue to intensify pressure through shareholder activism to eliminate conflict minerals, human trafficking, child and slave labor in supply chains, and to protect indigenous rights.
In the wake of the Parkland, Florida shooting, more investors are divesting not only from gun manufacturers and retailers, but also the banks financing them. Meanwhile, the newly mobilized Investors for Opioid Accountability (IOA) coalition is working to address companies’ role in America’s latest public health crisis.
Assets invested with a Gender Lens, which are focused on companies empowering women and girls, reached $2.2 billion deployed through 70 public and private equity and debt fund vehicles. Several funds have raised money to focus on broad-based employee ownership or quality job creation in sectors and communities impacted by automation.
The possibilities are growing for impact investors to complement the work of governments and NGOs in creating a more equitable, prosperous and sustainable planet. The arc of history can bend toward justice, but not without the collective intent to make sure it does.
The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Veris is grateful to its ongoing relationship with Envestnet and Investopedia.com, where this commentary first appeared.