For racial, ethnic, and gender minorities in the United States, diversity can signal a safe place to work or learn, opportunities to grow, and a chance to create value for oneself and one’s communities. Fostering belonging among a diverse group of people is powerful, and it’s hard: the status quo is a vicious and self-perpetuating cycle.
The status quo is that white men make decisions about who gets hired, which ideas get funded, and what products get made. And unsurprisingly, they usually end up hiring white men, funding white men, and making products for white men. As a result, white men continue to generate more wealth than other groups, ensuring they remain the dominant demographic. According to behavioral psychology, that’s natural: we select people like us because we feel safer. This preference is often unconscious.
In order to achieve real diversity, therefore, the individuals in an organization must be willing to put this sense of safety aside. It’s a worthy goal though: studies show that racially- and gender-diverse teams make smarter decisions, achieve better financial outcomes, and innovate more productively. Working on a diverse team can be uncomfortable, and that’s precisely why diverse teams perform better.
At OpenInvest, we’re striving to build a diverse team because we truly believe it will make our work better and our impact greater. Our employees have driven product features that serve certain groups better, built causes that impact different communities, and challenged the ideas of what we as a Public Benefit Corporation can and should be doing for our clients – and we’ve still got a long way to go. By expanding job postings beyond the traditional sources for tech and finance, holding hiring managers accountable to unbiased tracking, and creating metrics around retention and promotion, we hope to assemble a company whose diverse internal strengths will challenge traditional structures of technology and finance.
But beyond the value diversity brings to a company or its shareholders, striving for a diverse team is the right thing to do, helping bring social and economic growth to disenfranchised groups, and empowering individuals to create more change.
That’s why OpenInvest is now making it possible to invest in the companies committed to racial justice, both in their workforces and among their stakeholders.
According to the US Constitution, race-based discrimination is illegal, but progress is incremental and injustice persists. Some corporations tout their commitments to diversity in their employee ranks, but results are dismal: only 3 of the CEOs in the Fortune500 are African-American. At the same time, companies perpetuate systemic inequality by ignoring the impacts of their businesses on communities of color: approximately 15 of the top 100 corporate air polluters emit more than 2/3 of their total air pollution in regions populated by racial or ethnic minorities, though air pollution is disproportionately caused by white Americans.
OpenInvest’s Racial Justice Cause works in two ways. Based on the belief that you can’t manage what you can’t measure, our Cause overweights an investor’s portfolio into companies with quantitative diversity targets, and those who regularly publish diversity reports. It divests from companies named in recent diversity controversies and those that disproportionately pollute in low-income or minority communities.
OpenInvest clients have been asking for a racial justice cause since day one, and it’s been on our minds since before the company was founded. We’ve spent a long time looking for the right way to approach it, as diversity and its impacts are often qualitative. It’s impossible to put a value on the safety a marginalized person feels at work, and we know that lip service to diversity is not always diversity itself. However, we feel that working with the tools at hand is preferable to waiting for the perfect data, and we look forward to improving this (and our other causes) all the time.