Building On-ramps: Shared Prosperity Through Intentional Investing
Intentional focus on passing forward — propagating — tools for building an equitable landscape to inform investment choices. At Kaiju, we relish opportunities to train a spotlight on emerging developments and trends that demonstrate potential as investment vehicles that can drive greater access to mobility and prosperity for all.
The third decade of the 21st Century presents an ideal moment to consider new ways to create equitable opportunities for future generations.
Following the twin disruptions of 2020-2021 — the coronavirus pandemic and civic upheavals following the murder of George Floyd at the hands of a white police officer — the intersection of socio-economic realities and cultural-political activity presents an opportunity for innovative thinking about financial commitments.
Several legacy financial institutions are going above and beyond the purely political. They are not merely “virtue signaling” about diversity, equity, and inclusion (DEI), but rather have begun to fund and implement initiatives aimed at improving their internal structures and external investor programs.
The goal is to produce measurable DEI outcomes in areas such as recruitment, hiring, promotion, and retention. The institutions say they also plan to prioritise investment vehicles that will achieve equitable outcomes across communities whilst delivering investor value.
For example, Living Cities’ Narrative Change Working Group, a cross-disciplinary brain trust, recently highlighted a new effort from Prudential’s Business Resource Group (BRG). In 2020, the BRG at Prudential began convening top experts to develop sustainable programs that increase access for impact investing and other vehicles, an effort to create investment opportunities for a greater number of Americans.
Prudential made nine commitments at their last shareholder meeting to do more to embed racial equity in the company’s operation and business model going forward. These commitments fall into three categories: first and foremost, growing and nurturing diverse talent, particularly Black and Latinx talent; incorporating racial equity into the business strategy of every line of business; and expanding philanthropic giving and impact investing in the community and through policy to address barriers to racial equity.
Notably, as part of its legacy BRG matrix prior to 2020, Prudential already had established a Black Leadership Forum (BLF) to tackle similar issues of equity and investment, ones that intersect with its internal demographics and tie them to the company’s revenue goals:
The BLF represents the company’s Black employees. Roughly 10 percent of [Prudential’s] 25,000 U.S.-based workforce is Black, and the BLF is about 1,600 employees strong. The BLF creates a platform for Black employees to talk openly about racial equity and encourage the company’s leadership to find ways to accelerate the development of a Black talent pipeline. BLF and other BRGs within Prudential are also effectively serving the role of “critical friends,” providing pressure from within the organisation to constantly strive toward more inclusive culture and business practices, which has led to even greater internal changes in recent years.
Accordingly, in response to the urgent events of 2020, Prudential’s executive suite now prioritises internal and external DEI initiatives with a dedicated vice president:
It was clear that consumers pay attention to how businesses confront racism, and hundreds of companies responded with statements supporting racial equity. It became clear that diversity, equity and inclusion (DEI) is no longer just the right thing to do – it is now also a business imperative. Some companies came to that realization earlier. Prudential Financial, Inc., acknowledges that it is still on a racial equity journey, but it committed to increasing Diversity & Inclusion (D&I) several years ago. Vice President of Social Responsibility and Partnerships at Prudential and President of the Prudential Foundation Shané Harris explains that this shift was spurred by a purpose-driven brand identity, changing demographics and market competition, not to mention internal leadership and organizing.
“How do you use the core business model to advance commercial goals but also really apply it to addressing complex social issues?” Ms. Harris asked. “It is a business imperative that we have the right insights and that we are authentically engaging diverse communities.”
Similarly, the “business imperative” to support equitable and sustainable community growth spurred by the JP Morgan Chase Foundation involves prioritising housing affordability programs via the Black Homeownership Project, a research and advocacy organisation. The impetus for JP Morgan Chase is clear:
A legacy of racist housing practices, especially redlining and the predatory lending that led to the Great Recession, have made it impossible for many Black and Hispanic families across the United States to have the opportunity to tap into the equity-building benefits of homeownership. In fact, Black and Hispanic families have accumulated significantly less wealth today than their White and Asian counterparts — what is known as the racial wealth gap.
The foundation outlines a range of grassroots and institutional measures it is undertaking to extend the Black Homeownership Project as an actionable catalyst for positive change. In light of these efforts by Prudential and the JP Morgan Chase Foundation, investors might consider carving out time from their own attention economies to examine viable, values-based opportunities that are newly available through legacy firms.
Amy Alexander's reporting and commentary on demographics, cultural politics, and the innovation economy has been published in The Atlantic, The New York Times, NPR, and other outlets. She lives in Montgomery County, Maryland.