Soundbites: From Apartheid to Prisons, the Evolution of Impact

In this podcast, Sonia Kowal of Zevin Asset Management talks about the future of the impact space and punishment profiteering among public companies.


This is Toni Johnson with Heron Soundbites. I’m here today with Sonia Kowal, President of Zevin Asset Management. Hi Sonia.

Hi Toni.

Thanks for coming on our show today. Would you tell us a little bit about what Zevin Asset Management is and how you guys got started in the socially responsible investing space?

Sure, happy to. We were founded nearly 20 years ago by a guy called Robert Zevin and he’s been a pioneer in this space nearly 50 years. He came of age in the anti-war movement and anti-Apartheid movement. He did a lot in the investment space then, and he founded our firm nearly 20 years ago to cater to people involved in social and environmental justice, and try and have them increase their wealth to try and solve some of these issues.

So we’re socially responsible, loud and proud with it. We manage 600 million, sounds like a lot but in our field it’s pretty boutique. And we manage money for individuals, as well as families and foundations and endowments.

I heard you say earlier that you’re about a 600 million dollar assets under management. Can you talk a little bit about what that looks like in practicality? So you’re working with a client, how does that work? I come to you and then what do you do?

Sure, so you come to me and you say I want to invest my money for good, right. So then we figure out what that means to you because for every person it means something slightly different. Our main focus and how we differentiate ourselves from other investors is we focus on risk, and try and reduce it for clients. Because if they lose their money it’s hard to make money, right. If you go down then you can’t do anything positive with it.

So that’s something that we think about a lot when we invest globally. Where are the sources of risk—economic risk, political risk, social risk? And then invest to try and avoid those risks and then with whatever money we have left over we try to make what we can. And that strategy has worked really, really well over time so performance has been good. It’s been better than a lot of mainstream shops, and we’re proud of that, too.

We’re here on the sidelines of the Confluence Philanthropy Conference in Cambridge, Massachusetts. As you’ve heard speakers and gone to events, what have you learned or what thoughts come top to mind in terms of where the impact space is going and where the opportunities are?

So I have a personal journey; I came from the traditional investing space. So we would just try to make money, as much money as we could, however we could. Really not thinking about, both how we were doing that and the impacts of our investments. I stopped doing that 10 or 15 years ago, and have really transitioned to this space because I started to feel a lot of responsibility for the assets I was managing, and I feel like the people here at this conference have been through a similar transition. They’ve come from what was perceived as normal and decided they could do a lot more with their money, their wealth and their time.

So that’s exciting, to see a lot of kin here and learn about both really new ideas for me, and also try and educate people on things that I think are important in the impact space.

So there’s a couple things we’re working on. You were asking where I think the impact space is going. I think it’s important for the end consumers of impact investments to know exactly where their money is going and make sure they’re on the same page as their manager. So impact is a buzzword. There’s a lot of money coming into it; there’s a lot of managers that are saying they’re impact investors and clients need to know what that means to them, and make sure that’s what they’re getting out of it. So I think that’s really key is, being clear of your impact and what you hope to do.

I went to a session on regenerative finance today; I thought it was amazing. They started off by thanking the people whose land we’re on, that’s really important. We followed with a gentleman that talked a lot about reparations and why we are where we are, and why it’s important to think about how that capital was made in the first place. And then we went on to talk about how communities should have a voice, if not be the voice deciding where that capital gets deployed in terms of investing.

These, for a lot of investors, are pretty radical ideas.

So, we were on a phone call together a few weeks ago talking about prisons and mass incarceration.


Heron has obviously divested from the Corrections Corporation of America, for example, because we felt that the social outcomes of that investment outweighed any financial return we might get. Could you talk a little bit about why you were on the call and how you guys are thinking about prison investments and divestment?

We started thinking about this a number of years ago in general because we look at the top down picture of the economy. And what we were seeing was, when 20 to 30 percent of your population has a criminal record it’s really hard for them to get a job again. And then that’s compounded if they’re a person of color, and then if they’re a black male especially. So the chances are those people will never work again, and what that does to communities structurally is incredibly debilitating. So we started thinking about that on a macroeconomic perspective and just thinking that this is a huge problem for income inequality in this country. And, just bad for investors as a whole if you take that to its logical conclusion.

So we’ve been thinking about that more and more. We started doing work on criminal background checks and rating company policies on how they were thinking about who they hire, and people with records, and comparing them against model policies. That was back in 2011; that work has progressed since then. And so, we’re thinking about divestment. We think that it is not appropriate to profit from punishment; that’s in general not a moral stance that we think is appropriate. So divestment is one thing. The American Friends Service Committee has done some interesting work to identify companies that we may not associate with the prison industrial complex, yet are. So Sodexo, Aramark, 3M, CenturyLink these are pretty well known companies that have fairly large divisions that are involved in profiteering from punishment. So these are companies that either you can engage with or just get rid of in your portfolio.

Engagement, as in advocacy is something that we favor, and so there’s two areas where we’re doing that now, criminal background checks again. Companies are very wary of talking about if they’ll hire people with records. They think it’s a PR nightmare and so we’re trying to get companies to adopt model policies and then show other employers that this is possible to do and to actually thrive as a result. Because these are people that often have a very different world view, and one that is not often represented in business, so it’s a really unique voice that they can benefit from. So that’s part of the business reason that we’re giving them.

But also we’re trying to talk about prison labor and their use of prison labor in their supply chain. There’s a lot of it going on; it’s basically slave labor; it’s allowed by the constitution and we don’t think this is a fair way of doing things. There may be ways of doing it fairly, we just don’t think that it’s being done right now so, a good topic for engagement.

And then there’s reinvestment, and that can look like investing in worker-owned coops. Social impact bonds are pretty controversial but maybe eventually they’ll find something that works. There’s a few possibilities, so there’s a whole gambit of investor tools you could use to think about this.

Anything else top of mind that you would like to say or final thoughts you might have?

I’m all out but thank you for having me and thank you to Heron also for leading on so many of these issues. You know Heron’s been such a leading voice in impact investing and really putting its money where its mouth is for a long time. Thank you.

Thank you. For Heron Soundbites, this is Toni Johnson. 

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