Investors concerned that their investments do not align with their values can use a new tool to see if they are inadvertently profiting off of private prisons and border control industries.
The free Prison Free Funds tool from As You Sow, a nonprofit that promotes corporate social responsibility, tells users if a mutual fund or ETF is invested in companies that profit off of prisons and prison labor, as well as companies profiting off of the immigrant detention centers at the border.
As You Sow already offer tools to screen mutual funds and ETFs for investments in fossil fuel, gun and tobacco companies and manufacturers; another tool from As You Sow rates companies on gender equity. The Prison Free Funds tool has been in the works for a while, but it was fast tracked after the killings of George Floyd and Breonna Taylor by police and subsequent protests against police brutality across the nation, Andrew Behar, CEO of As You Sow, tells CNBC Make It.
Behar says he has received dozens of emails from users in recent weeks asking for a way to help them divest from the prison industrial complex. Investors are increasingly wary of their money benefiting companies that contribute to "racist policies" in the U.S. which disproportionately affect Black people and other people of color, such as long sentences for non-violent offenses and the militarization of the U.S.-Mexico border, he says.
But many people are simply unaware that they are investing in companies that don't align with their values. The tool allows them to see if they are benefiting from an "unjust system," he says.
"It's all about transparency," says Behar. "It gives people a chance to choose" what they invest in.
To use the tool, type the name or ticker symbol of the fund you're invested in into the search bar and press enter. It then provides a letter grade for the fund based on how much of the fund is invested in companies profiting off of the private prison industry or the border industry.
The tool also lists the "flagged" holdings and details how each is potentially problematic. Banks, for example, are flagged if they finance private prisons or make a profit by tacking extra fees onto banking products used by inmates. Technology companies are flagged if their products are used by the U.S. government for border surveillance.
"This provides a way to look at how these businesses are supporting a system that contributes to injustice," says Behar.
Other companies are listed if they are involved in incarceration and detention facilities in any way, including those contracted to provide transportation, health services and banking and financial services.
If you are investing primarily through a 401(k) at work, As You Sow also provides a sample letter to send to employers to request different fund options. If you are investing through a brokerage or individual retirement account, you have more flexibility with the funds you choose: You can invest in one of As You Sow's top-rated funds, or search for others that align with your preferences.
Though some might see this as a small step for racial justice, Behar says it's one of the most important things individuals can do.
"How you bank, how you spend your money, it all matters," says Behar. "It shapes the world. It really does."
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