Retirement savings and racial justice: the hidden connection
Mutual funds found in retirement plans can end up holding companies with poor track records on racial equity — whether that’s weak workplace diversity policies, lack of accountability around discrimination, or business models that perpetuate systemic bias, reinforce structural racism, widen the gender pay gap, and inflict harm on historically marginalized communities.
For investors who care about justice, this hidden connection matters. That’s where Social Justice Funds comes in: helping investors see not just the financial performance of funds, but also the racial justice implications behind them.
Why racial justice transparency and disclosure matters
To hold companies accountable, you need quality data. As You Sow’s Racial Justice Initiative and its Racial Justice Scorecard Data Visualization Tool make it possible to evaluate corporate actions – both internally and externally – and disclosures in measurable ways. Our Racial Justice Scorecard has five core pillars with 28 KPIs. Key indicators on racial equity; diversity, equity, and inclusion (DEI) disclosure and policies; and environmental justice, give investors a clear view of where companies stand. Transparency isn’t just good for justice; it’s essential for investors who want long-term, sustainable value by ensuring the long-term health of companies.
A recent report by As You Sow concluded that companies with workforce diversity are linked to financial outperformance. Likewise, Parnassus Investment furthers the business case for environmental justice, highlighting that companies should proactively address their pollution footprint rather than risk financial, legal and brand damage. By integrating racial and environmental justice data into investment decisions, investors can move beyond statements of intent toward measurable impact. In doing so, they not only drive accountability but also help shape a more equitable and resilient economy.
What companies are saying in 2025
Companies exist within the social framework of their communities and have a responsibility to preserve and protect those communities from harm, including environmental damage caused by corporate actions. As shareholder advocates, As You Sow educates and motivates companies to examine implicit biases built within their systems by engaging directly with corporate leaders. The Racial Justice Scorecards serve as the backbone of our corporate engagement strategy and our key performance indicators (KPIs) are evaluation guidelines which track and monitor corporate progress.
As You Sow and Whistle Stop Capital have been tracking corporate approaches to DEI and racial equity since 2020, looking at publicly available data and speaking to hundreds of companies about their programs. Despite a strategic shift by some – driven by current political pressures and legal uncertainties – many corporate leadership teams are continuing to invest in diverse talent pipelines and inclusive workplace systems because they recognize the value it brings to their ability to grow, innovate, and attract the best talent. For example, our research shows that in Q3 of 2025, 32% of the Large-Cap 3000 companies have BIPOC resource groups, and 27% have pipeline programs to recruit BIPOC employees and/ or support or partner with HBCUs and/or other colleges for BIPOC individuals. In fact, recent analyses reaffirm that companies with diverse leadership teams continue to outperform peers in profitability and innovation.
Executives themselves cite diversity as a critical driver of problem-solving and adaptability, especially in rapidly changing markets. Even as public discourse around DEI has become more polarized, many forward-looking leaders understand that inclusive workplaces are not a political stance, but a proven business strategy tied to long-term performance and competitiveness.
Turning values into investment choices
For investors who want their portfolios to reflect their values, Social Justice Funds provides the tools to act. The platform helps identify funds that score well on racial justice, so investors don’t have to choose between strong returns and strong principles. By aligning portfolios with funds that support racial justice, As You Sow’s Social Justice Funds helps individuals and workplaces shift their financial systems away from harm and toward equity, sustainability, and long-term financial growth.
Retirement savings can be more than a personal safety net — they can be a lever for justice. By choosing funds that support racial justice, investors help keep racial justice on the corporate agenda. Now is the time to ensure those dollars are working toward a future where equity is more than an aspiration!
