Amplify your voice by the way you invest.

A company's role in society has been re-defined.

Many companies are speaking out against the murder of George Floyd and racism in the United States. This is a massive transition from the past when companies were silent on issues that could be viewed as political for fear of alienating a percentage of their consumer base. While companies started speaking out on marriage equality, gun reform, and climate change, nothing compares to the overwhelming support they have lent to the #BlackLivesMatter movement.

This is not a coincidence. CEOs have been coming to terms with their new role in society for a while. One of the most publicized events was in August of 2019 when 200 chief executives met and redefined the role of a business in society. Rather than operating solely in the interest of shareholders, as in the past, they agreed that companies must also invest in their employees, protect the environment, and deal fairly and ethically with their suppliers.

On the heels of George Floyd's murder, 300 chief executives, mayors and government officials met this June over Zoom to discuss race relations and social justice. Surveys increasingly show that consumers and employees expect companies to articulate their values. Therefore, many executives spoke out against Mr. Floyd's killing and the problems of racism in America.

Companies have the power to drive change on race and social issues within their company and the communities in which they operate.

The "S" in ESG (environmental, social, and governance) integration covers a variety of social factors including diversity and anti-bias issues, workplace safety, workplace benefits, and human rights. If you care deeply about these issues and understand that a company's poor performance on these issues can negatively affect the company's bottom line, then consider applying an additional lay of due diligence to your investment process.

Every company in every industry is being evaluated by consumers on factors that are not being captured in the traditional investment process.

Here are some examples of how companies handled social risks (racism and sexism) that arose recently.

CrossFit Inc

The CEO, Greg Glassman, posted a tweet that made light of the killing of George Floyd and covid-19. He ultimately resigned. His actions will cost the company millions of dollars in lost royalties, licensing fees, and sponsorships.

Franklin Templeton

A senior advisor from the firm was involved in an incident with a black man in a New York City park while she was walking her dog. The man asked her to leash her dog in accordance with posted signs. He started videotaping, and the woman threatened that if he did not stop the video she would call the police and say there was an African American man threatening her life. She did call the police and the video was posted and went viral on social media. Franklin Templeton reviewed the incident and fired the advisor, citing zero tolerance for racism. There does not seem to be any negative impact to the firm financially due to their swift action.

Fisher Investments

The CEO, Ken Fisher, is a billionaire money manager. Mr. Fisher made sexist remarks at an investment conference. He eventually apologized, but his comments led people to move $4B away from his management.

If you are already applying an additional layer of due diligence to the products and services you buy, consider starting to do the same with your investments.

When I needed new clothes, I had the choice to use Stitch Fix, a personal shopping service I have used in the past, or Wearwell, which provides a similar service at a similar price. The difference is that Wearwell only partners with brands that prioritizes workers' rights (such as a fair and living wage and a safe and secure work environment) and the environment (such as zero waste processes and organic materials). I had a great experience with Stitch Fix, but I found a comparable alternative that checked more boxes on things that are important to me.

You can build a portfolio that is a comparable alternative to your traditional investment portfolio, and at the same time, checks more boxes on things that are important to you. When you apply ESG integration, you can allocate more of your money towards companies that are doing things right as it relates to environmental, social, and governance factors.

Investing with an ESG or impact investing lens will provide you with the same, if not better, financial return.

Have we, as a society, become less concerned with environmental and human rights issues over time? Of course not. As S&P Research stated, "Simply put, the market will tend to reward those companies that minimize their exposure to negative social issues".

We know more about our products and supply chains than ever, and the movement to incorporate people and the planet into all decisions will continue. Companies that are pro-active and master this integration better than the competition will take the lead. With increased transparency and the performance numbers to back it up, investors can choose to invest in companies that are working to improve society while making money.

Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and expats worldwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors. Follow her on Twitter.