Ethic and Ellevest Created a New Way to Invest in Women

Issues such as gender inequality, racial injustice, and climate change disproportionately affect women – especially women of color. Here's how Ellevest evolved its impact portfolio to give clients the power to invest in all women while incorporating racial justice.

Outcome No 1

Creating Intentional Impact Portfolios, which are personalized equity portfolios focused on women’s rights and racial justice

Outcome No 2

Supporting growing the wealth of women of color by redirecting investments from companies that contribute to gender, racial, and environmental injustice

Outcome No 3

Motivating clients to seek greater impact by showing them how their investments combat inequality while also yielding financial returns

Ellevest, a financial services company launched in 2014, was built by women for women. The company wanted to build impact portfolios that could address issues that disproportionately affect women, such as gender inequality, racial injustice, and climate change. So they partnered with Ethic, who helped Ellevest achieve greater impact.

The Challenge

In 2006, activist Tarana Burke started the MeToo movement to raise awareness of sexual assault. In 2017, #MeToo became a viral hashtag and grew into a global social movement that broadened the conversation around the inequities women face. At the same time, Black Lives Matter, an international social movement formed to fight racism and anti-Black violence, helped shine a greater spotlight on how women of color bear the brunt of many economic inequities, such as the gender wage gap and greater economic instability.

In the wake of #MeToo and Black Lives Matter, legislation at both federal and state levels was passed to improve the lives of working women and people of color. Awareness of the issues impacting these demographics started to become more pervasive, and more investors wondered how they could make a positive impact through their investments. 

“People started to be held more accountable for the choices they made. You saw the shift in thinking about the way people spend their money,” Emily Green, the head of Private Wealth Management and an advisor at Ellevest, said in an interview with Ethic. 

Recognizing this paradigm shift, Ellevest wanted to create a solution that would empower clients to use their investments to help improve women’s lives. And in alignment with Ellevest’s mission to bring wealth to all women, it was crucial to invest in racial and environmental justice, which strongly impacts the lives and wealth of women of color.

The Solution

In 2019, Ellevest launched its partnership with Ethic, which began providing the company with data and insights to inform its impact investing strategy. Ethic took Ellevest’s senior leaders through our Values Mapping Exercise (VME), a tool for helping advisors and end-clients express and prioritize their sustainability values. Ellevest used the insights from the VME to define its core values, which centered on women’s rights. Ethic then helped Ellevest incorporate these values with financial constraints to create investment strategies.

In 2020, as the nation reckoned with its systemic racism in the aftermath of George Floyd’s murder, Ellevest made racial justice a priority. Green said that Ellevest asked, How are we supporting every single woman in this portfolio?” Ethic’s partnership helped Ellevest bring together its commitments to women’s rights and racial justice into a central, intersectional investing strategy and portfolio. Ethic enabled Ellevest to take broader action in support of women of color through actions such as diverting money away from private prisons, predatory lenders, and companies with poor working conditions. Learning more about how companies contribute to environmental racism and in light of UN reports, Ellevest expanded their investments to address climate change with a Climate-Conscious Impact Strategy. 

By evolving its impact portfolio, Ellevest gave clients the power to invest in all women while incorporating racial justice and climate action. Together, Ellevest and Ethic built a new offering for Ellevest clients: Intentional Impact Portfolios. Additionally, the Ethic Healthcheck, a diagnostic tool that identifies whether current investments align with clients’ values, showed Ellevest clients how they could increase and continuously track the impact of their investments with Ethic’s interactive platform.

Displayed results are illustrative and are not indicative of actual results.

The Impact

Ethic helped Ellevest create equity portfolios that seek to improve women’s financial wellness. “Most of the clients who come to Ellevest are mission-driven. They know they want to make an impact in the world,” Green said. Yet many clients are unsure where to invest. Co-created with Ethic, Ellevest’s Intentional Impact Portfolios enable clients to align their investment dollars with their values — specifically by addressing the challenges and opportunities associated with women's rights and racial justice.

Ethic helped Ellevest support the wealth of women of color by bringing together investments in gender and racial justice. In 2020, Ethic provided Ellevest with data and insights on issues such as workplace diversity, human rights and community, greenhouse gas emissions, and water, enabling the company to build an intersectional approach to investing in women’s rights and racial justice. Today, Ellevest’s Intentional Impact Portfolios help clients understand the connections between gender and racial justice, and make investments that increase equity for women and communities of color.

Ethic helped Ellevest support clients to seek greater impacts by showing them the power of their investments. Ethic’s platform provides Ellevest clients with the tools and space to explore their impact through live impact data visualizations, educational materials, and company news stories. Recognizing their ability to do good sparks meaningful conversations between clients and Ellevest wealth advisors and deepens clients’ commitment to impact investing.

Ethic Disclosures

This material includes commentary from Ellevest which is a Client of Ethic Inc.  No direct or indirect compensation was provided for Client’s participation in the creation of this material.  There are no known conflicts of interest resulting from Ethic Inc.’s relationship with Client.  

Ethic Inc. is a Registered Investment Adviser located in New York, NY. Registration of an investment adviser does not imply any level of skill or training. Information pertaining to Ethic Inc’s registration or to obtain a copy of Ethic Inc.’s current written disclosure statement discussing Ethic Inc.’s business operations, services and fees is available on the SEC’s Investment Adviser Public Information website – or from Ethic Inc. upon written request at Information provided herein is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Any subsequent, direct communication by Ethic Inc. with a prospective client shall be conducted by a representative of Ethic Inc. that is either registered or qualifies for an exemption or exclusion from registration in the state where a prospective client resides. Information contained herein may be carefully compiled from third-party sources that Ethic Inc. believes to be reliable, but Ethic Inc. cannot guarantee the accuracy of any third-party information.

Ethic Inc. does not render any legal, accounting, or tax advice. Ethic Inc. recommends all investors seek out the services of competent professionals in any of the aforementioned areas.  Ethic Inc. cannot provide any assurances that any investment strategies, simulations, etc. will perform as described in our materials. ALL INVESTMENTS INVOLVE RISK, ARE NOT GUARANTEED, AND MAY LOSE VALUE. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY.

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