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JUST Capital: Reinventing Impact Investing

JUST Capital: Reinventing Impact Investing

December 02, 2022

Impact investing has been a hot topic in recent years, with more investors wanting to make their investment decisions not only based on return but also a company’s values.  Think of it as a framework that helps investors like you and I that not only gives us the potential for capital gains from our investments, but also aligns with our own moral views. This is what impact investing is all about; being able to invest in companies that are making an impact on society while not having to sacrifice returns. There was a common misconception that you had to give up some returns on your investments if you wanted to invest in companies that had moral business practices. That is no longer the case and it is proven with a new ETF called JUST, created by JUST Capital and supported by Goldman Sachs.

What is JUST Capital exactly? In short terms, JUST Capital is a non-profit organization that poll’s the American population on issues about just business practices. They then create research and data based off of the poll that ranks companies based on how just their business practices are compared to the criteria. For example, in the 2021 survey JUST Capital conducted, they found that the number one priority for Americans from the perspective of just business practices was that a company “pays a fair, living wage.” This shows that the American population wants a company to compensate their employees fairly so that they may live off of the wage they receive and have it be something the company prides itself on. They released the top 20 priorities they found from their survey and from this criteria, they created their ranking system. 

Their ranking system has brought a lot of attention to Just Capital. They take data and research driven criteria and rank major publicly traded companies against that criteria and one another. These rankings are made public through their website and provide two things; information to the investor and information to the company. This way, investors can see how their investments might rank based upon the criteria and may be surprised to see that some companies are ranked higher or lower than they initially thought. Overall, their rankings serve a great purpose for both investors and corporations as they have access to reputable data that can be accessed freely and impacts companies in their investors and their corporate levels.

Now, all of this data is used to achieve one major goal, which is the JUST ETF. The JUST fund takes these top performing companies (about 450 of them) and puts them in an ETF. With this ETF, investors have the ability to invest in companies that participate in just business practices and fit the overall findings of their survey. This allows JUST Capital to mix impact investing, with solid returns that overall help these companies achieve more capital and reward them for just business practices, while generating a return for investors that is competitive. 

Here at Mitchell, Vaught, and Taylor we have created a fund called The MVT Common Fund. This fund promotes impact investing for our clients while also generating competitive returns with our industry peers. The MVT Common Fund uses JUST as one of its holdings in the fund and has proven to be a great product. Overall, the JUST ETF has contributed success to the MVT Common Fund and we hope to better our product to fit the needs and desires of our clients.