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Why Rachel Robasciotti Works to 'Mobilize Investors'

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Rachel Robasciotti, founder and CEO of Adasina Social Capital and co-founder of Robasciotti & Philipson, has taken the idea of diversity and inclusion to a new level to address some of the most pressing social issues of the day.

In addition to her dedication to social justice as an investment strategy, Robasciotti is director of advocacy and engagement for Abacus Wealth Partners, an RIA that merged with Robasciotti & Philipson in 2021.

The advisor and executive founded Robasciotti & Philipson in 2004 (at age 25) and Adasina Social Capital in 2020. She and Adasina are 2021 winners of ThinkAdvisor’s LUMINARIES recognition program in Diversity & Inclusion, and she recently took the time to review her career path and what led to the launch of the Adasina Social Justice All-Cap Global ETF, as well as what’s guided many of her activities.

THINKADVISOR: What has led you to making social justice part of your life’s work?

RACHEL ROBASCIOTTI: My life’s work is the story of my life. I grew up in a rural community that was very poor, in a black community in the segregated part of town. … Because of mass incarceration and police brutality, three of my male family members were killed by police and many others were incarcerated. That combination of factors meant that I grew up in a family of women. … That is significant because …having a family of all women made us even poorer.

Most of the jobs went to men, and most of the jobs went to the white folks in town. … We were poorer than the poorest folks. I was homeless on multiple occasions as a kid. We were also in the most environmentally compromised area of town. … These overlapping issues of racial, gender, economic and climate justice actually really come together in really significant ways for the communities that are most impacted by them.

Many of the recent issues around social justice that have come to the fore of our consciousness in the United States … tend to be very relevant for me. … That’s the reason why I do what I do. 

How should these social issues be addressed?

Those who are most impacted by those issues … have the best information on what will help them. Finance hasn’t quite seemed to get that yet. They still think that financial analysts or academics have the answers.

There are some good answers that come out of financial analysis or academia, but I think the best answers come out of the communities that are most impacted. I’m not seeing something that other people aren’t seeing. I just saw it earlier given my upbringing.

We’re all in a pandemic. Suddenly it makes sense now why everyone needs health care, how if you don’t take care of the most vulnerable, [it] puts everyone in a bad situation. 

I don’t want there to be enough for everyone because I just have a big heart and care about those who are not doing well. I actually want to live in a world where everyone has enough, because that’s what we all deserve. … We’re actually impacted by homelessness and a lack of proper health care and economic justice. It changes our lives, not just the lives of those who are most impacted.

How are you using that early experience in your work?

I started off in wealth management work … at Robasciotti & Phillips. We started doing asset management to address some social issues, and Adasina Social Capital eventually came out of that work.

What we do at Adasina is we bridge investors who want to make a difference with those who are closest to the problems, who can actually give you a better sense of how to make a difference.

For example, the #MeToo movement comes out, which challenged forced arbitration to deal with sexual harassment issues. When the investment world looks at it they want to create gender lens portfolios based on … the gender-relevant data they have is about women on corporate boards, but that doesn’t do anything about forced serial sexual harassment and forced arbitration for sexual harassment.

We founded and began to gather data about which publicly traded companies had this policy in place that enabled serial sexual harassment and began to base portfolios over where companies stood [on the issue] as well as by gathering the information about the impact on corporate environments, giving them reasons why they should end those policies.

There are many more examples. After George Floyd [was killed by a police officer], people went to corporations and wanted to focus on who’s making commitments to racial diversity. But again, that’s looking from their vantage point

If you talk to movement organizations for Black lives, like Color of Change and many of our partners for social justice … what they will tell you [is] … “That’s nice. It’s important to have representation and jobs. … But can we really focus on mass incarceration and the fact that the system of mass incarceration is what actually and ultimately put that knee on George Floyd’s neck?”.

It’s really simple. … Go to those most impacted by these issues and the organizations they start and ask what we can do as investors to help. It’s a much more humble approach than saying “Oh, we know what to do to help” or “Let’s look around and see what kind of data might be related,” which tends to be, in my opinion, an unprofessional approach. … In real life, you have to actually talk to those who are impacted.

We have to stop talking to ourselves and start talking to those communities. We can do that in a number of different ways.

How are you doing that for the issue of mass incarceration?

In mass incarceration, we put out the racial justice impact data set, which basically doesn’t just say “Hey, finance, stop investing in private prisons.” It identifies which companies are actually involved in perpetuating the system of mass incarceration. So we’re talking about everything from the money bail system to private prisons directly as well as their major financiers and suppliers.

If you go to our website, you can look up the racial impact dataset and see where publicly traded companies stand. The reason we focus so much on data is because we believe that if we’re going to have an impact, it’s not just about having impact on our portfolio; it’s actually sharing information so that other investors, particularly institutional investors, can be looking at the same data that we’re looking at as much as possible… And we know that institutional investors don’t do anything without data.

We’ve gone to the impacted communities and asked “What can we do to help?” and … we partner with a social justice organization to publish that data.

What would be an example of that? is one example. … We do something similar on economic justice … for tipped workers. Go to Investors for Livable Wages. You can see  that, again, there’s data.

How are you applying this data in your own investments? 

We have an ETF, the Adasina Social Justice All-Cap Global ETF (JSTC). In that public equities portfolio, we are the first to apply the data that we produced. We are the first publicly traded portfolio that specifically identifies and excludes publicly traded companies that pay subminimum wage to their workers. It’s not just an economic justice issue. Most of the people who are paid those wages are Black people and women.

We also have a fiscal justice municipal strategy. That’s all about buying up the bonds of majority-Black cities or cities with a large Black population … buying what you would call Black muni bonds. We are leveraging our weight as investors in those communities to try to improve the outcomes for the residents there. 

What would be an example of that?

That is not in a fund, so we don’t put out all the details of what communities we’re in, but if you go to our website to invest in fixed income, to FAQs at the end, it says where the strategy invests and why. 

We also invest in historically Black college and universities bonds like in Hampton, Virginia, a Black-affirming community… Like a lot of similar places, they don’t have the required capital needed and the bond market doesn’t give them favorable prices for their bonds. And when you eliminate all the factors, all that’s left is the issue of racial discrimination that appears in the bond market. 

We also take an active stance in communities where maybe it’s not all good but maybe some things are doing well. … For example, if there were a city like Ferguson, Missouri, or Kenosha, Wisconsin, where a really high percentage of their budgets [was] coming from fines and fees on residents, which happened … and they had a lot of police brutality, we would be able to go to them and say:

“Did you know that setting your portfolio up this way ends up resulting in civil unrest and an eventual bond rating reduction? We’re bond buyers. We own the bonds and we may be interested in future bond issues. and we want you to know that we care about how you build your budget.”

What about your stock market strategies?

That market is so big, so we screen our own portfolios, but we don’t limit our impact. We vote our proxies and screen our portfolios very rigorously. … We do that work by ourselves, but if we just do that in our own portfolios, that doesn’t actually have the kind of large-scale impact that’s needed for making changes to the whole system.

So we don’t focus on doing what we do with the Black muni bond strategy in our own portfolio. What we do there is, we actually … educate other investors and give them data so that they can do something similar in their own portfolios.  … 

We go into our portfolio to make changes on the bond side. We actually go outside the portfolio for public equities, and we mobilize investors. We make investors understand why it’s a problem that there are sub-minimum wages and why they should be checking this out in their own portfolios. … What we actually do is mobilize other investors that we can collectively have influence on corporations.

In your work with Robasciotti & Philipson, an RIA firm that has now merged with Abacus, how are you investing clients’ moneys in that capacity that deals with all these social issues?

I’m part of supporting the Abacus investment committee — they are centralized managed portfolios. They are one of the folks that actually use our data. Also, we worked with Abacus to create the Due Diligence 2.0 Commitment. That’s about investment industry transformation.

Everyone keeps complaining about how there’s no diversity in the investment management industry. Then when you get right down to it, it’s not because there aren’t other asset managers like us out there. We exist.

What happens is that institutional due diligence processes are systematically biased against new entrants. And that ends up excluding women and people of color. The industry is 98-plus percent white male.

What we did with the Due Diligence 2.0 commitment was make a road map on how to reform due diligence processes such that allocators are still meeting their fiduciary obligations but they’re not creating systemic barriers for Black Indigenous and people of color. We put out a set of standards … and we’ve had just overwhelming positive feedback.