Direct Investment for Enhanced Social Justice

“The climate crisis cannot be solved without taking social factors into account,” says Andreas von Angerer, impact manager at Inyova.

  • Social themes attract more investor attention>
  • Media companies like Netflix and Spotify provide greater exposure to underrepresented groups
  • Bright Horizons, Centene Corporation and Össur enter the Inyova universe as pioneering social enterprises.

Inyova Impact Investing, as a sustainability-focused robo-advisor, offers an additional selection criterion for social justice, going beyond education and health. With the new impact theme[1] “Social Justice”, investors will now be able to select companies in their portfolio that play a pioneering role in the socially just and equitable distribution of resources, opportunities and privileges. These include companies whose products and services help to promote diversity by ensuring equal opportunities and/or improving access to society and the visibility of underrepresented groups. “As the climate crisis deepens, inequalities in wealth and income are growing globally and within countries. Environmental and social issues are closely linked, yet too often the focus is still on environmental challenges. However, the climate crisis cannot be solved without taking social factors into account,” explains Andreas von Angerer, impact manager at Inyova.

Media companies such as Netflix and Spotify play a central role in the representation and visibility of underrepresented groups. According to a study by the University of Southern California, the Annenberg Inclusion Initiative, more than half of Netflix movies and series star girls or women. Compared to other streaming services, Netflix also has the most LGBTQ lead actors in its own productions. In the world of music, Spotify’s EQUAL Global Music program aims to promote the work of women music creators, songwriters and songwriters, who are heavily underrepresented in the charts. Under the EQUAL program, a female artist is featured on the front page of their respective local playlist each month and additionally receives publicity in the form of posters, banner ads and social media videos.

The harbingers of greater social justice are also companies that provide financial and insurance services to underserved and low-income population groups. Centene Corporation is a multinational healthcare company that provides programs and services to underinsured and uninsured people in the United States. A significant proportion of its products (about 67% in 2020) targets low-income groups and thus contributes to reducing poverty. The Erste Group bank in Austria also offers, beyond its main activity, various social investment programs, for example fixed and low interest microloans, which allow small family businesses to embark on entrepreneurship with a minimum of risks.

Other companies that contribute to the theme of social justice through their products are, for example, manufacturers of assistive technologies and devices, which enable easier access and greater participation in society, or childcare structures that promote women’s independence and self-determination. Össur is a globally active Icelandic orthopedic company engaged in the design, development, manufacture and sale of non-invasive orthopedic products. Thanks to prosthetic solutions, Össur helps restore the mobility of patients and allow them to resume normal activity despite their disability. Another example is the American company Bright Horizons, which offers childcare and early education services, as well as supplementary benefits for family members. The company’s daycare services thus support gender equality by enabling parents to participate in the world of work and to better reconcile professional and family demands.

With this new criterion, Inyova supports the objectives of international frameworks aimed at promoting social justice, while responding to the desire of investors to place greater emphasis on this subject. “Human rights and the climate crisis are closely linked. Droughts, floods, heat and other climate-related events are massively increasing due to climate change and have a huge impact on people and their rights – for example on food security and access to drinking water” explains Sabine Loetscher, expert in Corporate Sustainability and member of the impact committee[2] (IEC) made up of nine experts.

“We can only meet the great challenges of our time together. But it also means that everyone should have equal access to problem-solving and innovation processes. In the face of multiple crises, we cannot relinquish the potentials and expertise of large sections of our society or weaken their effectiveness by accepting that their participation is structurally more difficult, if not impossible – economically speaking, we simply cannot allow it,” adds Kristina Jeromin, director of the Green and Sustainable Finance Cluster Germany and also a member of the IEC. The EU thus plans to develop a social taxonomy for products and services that have the potential to cover basic human needs or provide basic economic infrastructure to certain target groups.

[1] Impact investors can choose between 12 handprint impact themes. These represent the environmental and social impact of companies’ products and services on the environment. Additionally, Inyova investors can complement their investments with four impact footprint themes, which represent four pillars of sound business practice. In addition, eight exclusion criteria are available.
[2] The following people are part of the IEC: Andreas von Angerer (Head of Impact at Inyova Impact Investing), Prof. Dr. Timo Busch (Co-founder of the Sustainable Finance Research Group at the University of Hamburg), Young-Jin Choi (Head of Impact at Vidia Equity), Kristina Jeromin (Director, Green and Sustainable Finance Cluster Germany), Prof . Dr. Julian Kölbel (Assistant Professor in Sustainable Finance, University of St. Gallen), Tillmann Lang (co-founder and CEO of Inyova Impact Investing), Sabine Loetscher (Corporate Sustainability expert, board member, formerly WWF), Prof. . Dr Falko Paetzold (assistant professor Social Finance, EBS Universität für Wirtschaft und Recht, founder and managing director of the Center for Sustainable Finance, University of Zurich), Dr Andreas Rickert (CEO PHINEO, steering committee of the federal initiative Impact Investing).

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