Social Justice Investing
One of CED’s core beliefs is that those “closest to the pain must be the closest to the solutions.” Applied to the world of impact investing, we believe that deep, sustainable change can only occur when oppressed communities themselves can design, own and govern the systemic solutions to their problems.
In partnership with aligned investors, wealth managers, community organizers and others, CED advocates an evolution from impact investing to social justice investing to accelerate the democratization of wealth from the gated hands of the 1% to the workers and communities who created it.
Movement Portfolio Theory
Movement Portfolio Theory (MvPT) is a social justice investment framework and
portfolio management strategy that centers coordination with social movement leaders and alignment with social movement goals.
CED is currently working with partners to develop and refine MvPT. We will be publishing articles, frameworks, tools and curriculum throughout 2021 that introduce aspects of MvPT and support values-aligned wealth holders and managers to discern between conventional impact investing and social justice investing approaches. We also plan to host webinars and workshops to further develop Movement Portfolio Theory with various stakeholder audiences, including social movement partners, philanthropic staff members, financial advisors, and wealth holders.
If you’re interested in contacting us about MvPT or receiving information about MvPT as we release it, please fill out the form below.
What is Movement Portfolio Theory (MvPT)?
As part of our work to advance social justice investing, CED is developing a movement-centered alternative to Modern Portfolio Theory, (MPT) the popular portfolio management strategy. MPT is a mathematical framework for assembling an investment portfolio that maximizes financial returns by optimizing risk through diversification of asset classes and securities.
In contrast, Movement Portfolio Theory (MvPT) begins by centering democracy, reparations and power in investing decisions, thus reimagining how risk and return are conceived and managed within portfolio construction. For example, MvPT asks investors to consider:
Democratic Governance: To what extent do the people closest to the pain have authentic control over decisions related to the investments that impact them?
Community Wealth Building: If returns are generated, who benefits from those returns? Is the investor earning income generated through community effort? What does it look like to engage in non-extractive investing, where returns are kept in communities?
Movement Coordination: To what extent is the investor taking direction from grassroots movement leaders in crafting their "impact thesis"?
Investor Posture in relation to a Just Transition: Is the investor amplifying efforts to reform policies and practices that are currently doing harm in communities (i.e. by "stopping the bad"), or is the investor supporting restorative efforts to construct positive alternatives and models for the future (i.e. by "building the new")?
MvPT Movement Alignment Map
To illustrate how these MvPT lenses might be applied in portfolio construction, our Movement Alignment Map, below, plots a variety of capital strategies against two axis: Movement Coordination, in which investment strategies can range from Accountable to Symbolic to Non-existent; and Just Transition Investor Posture, in which we draw from the Just Transition framework to differentiate between the many ways investors can leverage asset management to advance social justice aims, from divestment to shareholder activism to direct investing.
We look forward to sharing more tools and frameworks like this in the coming year. To stay up to date on our work and/or join the discussion, drop us a note using the form below.
MvPT's lead author, CED's founder Aaron Tanaka, served as the Startup Manager for the Boston Impact Initiative, and is a co-founder of the Boston Ujima Project. Over the past 18 months, CED has been in conversation with many partners to refine the theory, including Blended Value Group, Transform Finance, Restorative Economies Fund, Chordata Capital, Justice Funders, Climate Justice Alliance and Majority Action.