In the last year, there has been a lot of criticism of ‘online activism’. Many have argued that we had become overestimated the power of Twitter and other online platforms in the outcomes of elections. After everything that happened around the world in 2016, there seems to be a consensus that if citizens want to influence their elected representatives, they will have to take to the streets to protest or voice their concerns at town hall meetings.
But, we would be foolish to think that social media and digital businesses cannot make a meaningful impact.
I was at a conference this week about diversity and inclusion in the workplace, which was organized by the Economist. One of the panel discussions focused on how millennials could be a catalyst for change. Given the lack of millennials in the audience, the speaker asked the crowd to imagine you were a millennial and answer the following questions:
“How many people voted in the last election?”
*Most of the audience raises their hands.*
“How many people are planning on voting in the next election?”
*The majority of the audience raises their hands (those who did not were probably non-U.S. citizens like me).*
“How many people cannot wait for the next election?”
*The entire audience raises their hands and erupts in laughter.*
“Okay, how many people have voted in any of the recent half a dozen shareholder resolutions to require the remaining Fortune 500 companies to adopt LGBT protections in the workplace?”
*Hardly anyone in the audience raises their hand.*
Keeping in mind that this is a conference about diversity and inclusion in the workplace, it was surprising that hardly anyone had ever considered participating in a shareholder resolution vote (as one of the few millennials in the audience, I wasn’t even entirely sure what exactly a shareholder resolution vote was or how common they are).
The speaker was the co-founder of OpenInvest – a FinTech (financial technology) startup that works as an online investment advisor. It is essentially an app that allows users create an investment portfolio that is fully customizable, as opposed to an ‘off-the-shelf’ fund you might join as part. However, their focus is social responsible investing. As their co-founder, Josh Levin described it, think: “Vanguard meets Change.org”.
Throughout the #IS6621 class this semester, it has been really obvious that we care about elections and social media/online activism campaigns. From our discussions about L.L. Bean, New Balance, or Uber, it is obvious that care about the choices we make as consumers. However, millennials rarely think about how their savings or investments are assets that can be used to shape the corporate world.
If you’re an undergraduate student, at some point in the next couple of years you will probably have the opportunity to join a 401k. If you’re an MBA student and you are like me, you probably joined the recommended plan that was put in front of you.
Investment funds make things really simple – to start picking individual stocks would be risky and very time-consuming. Funds simplify this process. Traditionally, people were grouped into funds for economies of scale, but advances in online technologies mean that it is easier to be selective about companies you are invested in.
The problem with funds is that there could be companies that you are invested in that are completely against your personal values. Maybe you feel really strongly about the Dakota Pipeline, or climate change, or gender equality, or weapons, or protections for the LGBT community. This startup argues that just because you give your money to somebody else to invest doesn’t mean you shouldn’t get to use your voice.
What is hiding in your current investment account?
The OpenInvest platform allows its users to build a portfolio around their values (e.g. attitudes towards fossil fuels, weapon manufacturing, deforestation etc.) and to respond to news stories as they unfold. Imagine you held Volkswagen stocks when the emission scandal occurred. OpenInvest would send a real-time update to your phone with a link to a news article about what has just happened. With one swipe, you could divest from the company immediately and share your decision with others on the platform to let management know how you feel.
Social responsible investing isn’t just good for your conscience, it has also been argued that it is good for your pocket! Reports from Harvard Business School, Bank of America Merrill Lynch, and Deutsche Bank Group all suggest that environmental, social and governance (ESG) investing, or corporate social responsibility (CSR) investing can meet or outperform the market.
In the future, we can probably expect to see more transparency in the finance industry world as individuals have real time access to information and tools that allow them to make instantaneous decisions. In addition to voicing our concerns by voting and making consumer choices, we should expect to be able to hold management in Fortune 500 companies accountable and utilize one of our greatest assets – our assets.