How It Works

A company’s ESG score measures the quality of its environmental (e.g. climate, waste, energy), social (human rights, labor and safety practices) and governance (transparency, diversity) efforts. Many financial institutions offer ESG funds that only include companies with good ESG scores. Some funds or custom portfolios can be designed to seek specific ESG goals.

Use your voting power as a stockholder to push companies towards more sustainable practices.

Consider switching some or all of your banking to a local bank, credit union, or community bank where you help support local business and economic development.

Purchasing a community investment note is one of the simplest impact investments you can make. It’s inexpensive (minimums can be as low as $20), and your money goes into a pooled fund designed for social impact. You can also invest in a Community Development Financial Institution (CDFI), which help target communities access capital and secure loans they might not be able to get through the traditional banking system. Recipients of CDFI funds often include low-income women and people of color.

They’re used to fund environmentally friendly projects, and are easy to incorporate into your fixed income portfolio.

A portfolio guarantee is a non-financial transaction where you agree to guarantee loans for micro-credit or other social purposes. Portfolio guarantees can be done through intermediaries or you can offer to guarantee a loan directly.  

These new financial instruments bring private capital to help scale effective social service programs. As the programs demonstrate positive results, governments pay back investors.