Justice Champion Spotlight: GRID 202

For Black History Month RBIJ are highlighting the work of GRID 202 – a financial advisory firm using investment to address racial injustice.

The need for racial equity investing has never been more profound. Racial inequalities that have been institutionalised and perpetuated by our criminal justice system have been sent into overdrive by the COVID-19 crisis. People of color have taken a far greater financial hit, face greater unemployment than white people, and aren’t experiencing the same recovery as those not experiencing systemic racism. The number of Black-owned businesses declined by 41% between February and April 2020, compared with a 17% decline among White-owned businesses (CNBC).

The financial disadvantages faced by people of color have been imposed and evolved over centuries, and are best illustrated by the racial wealth gap. Black and Latino workers are paid less than their white counterparts at almost every educational level. They also have lower savings and investments, lower home equity, and lower inherited wealth – because they have less money to work with.

"Because of it’s compounding effect and ubiquity, I don’t see how racial justice isn’t one of the top 2 or 3 issues for any investor claiming to be committed to positive social impact.”

How can businesses take steps to counter this consequence and use their resources to fight racism and inequality of opportunity in our economic system?

By advising individuals and partnering with endowments, foundations and other institutions, GRID 202 Partners, looks to align investment decisions and financial planning with social and moral values to “generate returns with impact and discipline” – with a specific focus on racial equity.

As Managing Partner Keith Beverly emphasizes: “Frankly, our target clients are rich people who care about poor people…fundamentally, the vast majority are households with financial means who are working in some way to make our society more equitable.”

They are the first to recognize the challenges of racial equity investing, and that investors today are faced with a “set of imperfect solutions” – especially when it comes to issues like racial demographic data, screening methodologies, incorporating racial equity into investment decisions and exclusionary approaches.

"The empirical evidence is unequivocal. Racial diversity delivers superior results. Firms that have not thoroughly addressed and eliminated institutional racism and implicit bias in their investment process shirk their fiduciary responsibility.”

In response to this, GRID formulated three strategic pillars:

• Recognizing racial diversity as an alpha generator. Companies that are favorably positioned to attract and cultivate diverse talent will have an edge in their respective markets. Firms that lead the way on racial equity will outperform and capture market share from those who do not keep pace.

• Centering and elevating voices of women of color - who face a more arduous task in integrating and advancing within the workplace than any other group. By uncovering and illuminating the challenges they face, investment can be directed to support them and improve racial equity for all.

• Providing access for households of color to credentialed fiduciaries and outperforming investment managers. This is a critical step in closing the racial wealth gap and enabling educational, entrepreneurial, housing, healthcare and other opportunities.

RBIJ is honored to partner with the GRID 202 Partners team as they lead the way and pioneer new approaches to tackling injustice through racial equity lens investing.