Financial advisor Rachel Robasciotti grew up in a poor African-American community in the shadow of the Oroville Dam in California, a structure that three years ago was in peril of collapsing and reportedly forced tens of thousands of people to evacuate. It was a highly segregated, rural community, she says, and there was likelihood of a Hurricane Katrina-type calamity.
“Those most exposed to the extreme flooding were in the low-lying areas there on the south side of town, which is where I grew up," she says. "And you could see that those who were being evacuated were those least likely to have cars, the wealth is so low.”
If that crisis didn’t show the world the disparities of race where it intersects with environmental and health issues, the coronavirus certainly has. “Any natural disasters really put pressure on the system and show where the system has cracks,” Robasciotti says.
The world’s focus on police brutality after George Floyd’s death at the hands of police has also resonanated with Robasciotti, who says that her family has personally dealt with police brutality (she says her mentally ill father was tased by police and that he died shortly after. She also recalls an incident in which police grabbed one of her older sisters—who was holding her baby sister).
Robasciotti, who was on Financial Advisor magazine’s list of “Young Advisors to Watch” in 2017, says environmental justice and social justice are intertwined. Not only are Black and Latinx communities more at risk from environmental catastrophes and pandemics. They are also more exposed to predatory lending and discriminatory mortgages practices (on homes less likely to appreciate) and are incarcerated at disproportionate levels. And Robasciotti says these intersections are poorly addressed by typical socially responsible investing and its mature counterpart, ESG.
She didn’t see a suitable investment strategy to address these problems, so she decided to build her own. She and her partner Maya Philipson at San Francisco’s Robasciotti & Philipson are spinning off their strategy in a new investment firm that tries to bridge the gap between investments and social justice, making target investment companies decide which side of the line they stand on, as she puts it.
The new firm is called Adasina Social Capital, and it’s rooted in a strategy the firm has already been pursuing since 2018. Dubbed the RISE strategy (for “return on investment and social equity”) Robasciotti says she and Philipson wanted to house it in a freestanding sister firm, which launches Wednesday.
The two have already been using the approach in separately managed client accounts comprising stocks that passed the firm’s rigorous screens. Robasciotti says that about 35% of her RIA firm’s revenue is already coming from this social justice strategy. (The firm has some $144 million in assets under management.)
“We really wanted to expand the availability of the RISE offering specifically.”
The firm is also launching an Adasina Social Justice Index, which reflects the same methodology. And according to the SEC, the firm has filed a prospectus for an exchange-traded fund, called the Adasina Social Justice All Cap Global ETF, which will be based on the index.
The approach means looking outside traditional power structures for data. It means actually looking at neighborhoods like the one she grew up in and asking people about the issues that affect them—and working with groups like the Movement for Black Lives and the Poor People’s Campaign.