NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, June 19, 2018

By Stephen Gandel

Perhaps because of a declining faith in government, there has been a growing sense that a good way to solve the nation’s social problems — from gun violence to pollution — is through investing. And if you’re going to get serious about social investing, eventually you have to deal with the investing side of the equation. That means most roads lead to Wall Street, where there’s always a bank willing to cater to your needs if there’s money to be made.

Enter Goldman Sachs, which, along with Just Capital, on Wednesday launched an exchange-traded fund that invests based on a ranking of companies that engage in “just business behavior.” It is called the Goldman Sachs JUST US Large Cap Equity ETF. The ranking was developed by Just Capital, which is financed by hedge-fund legend and billionaire Paul Tudor Jones II.

If you’re going to put your name on an ETF about socially conscious investing, it helps if the rankings it’s based on don’t paint you as some rapacious bank. Not surprisingly, Goldman itself ranks relatively high on the “justness” scale of firms in the ETF. Out of more than 800 companies, Goldman ranks 65. That’s not at the top of the list, which is dominated by technology firms, with nine of the top 10 spots.

Photo courtesy of Steven Depolo.