Honoring Black History Month: Why Economic Empowerment and Diversity Should Matter to Investors

February is Black History Month, a timely moment to reflect on how inclusive economic growth shapes not only social outcomes, but financial ones as well. And for some investors, ESG investing is reshaping how they think about value creation, thereby expanding the conversation beyond earnings and balance sheets to include how companies manage environmental, social, and governance risks.

Economic empowerment and diversity influence who participates in markets, who builds businesses, who leads companies, and who accumulates wealth. And for investors with a long-term lens, these factors increasingly show up as signals of resilience, competitiveness, and sustainable value creation. Therefore, the question isn’t whether economic empowerment and diversity matter; rather, it’s how they show up in portfolio performance, risk management, and long-term opportunity.

Capital doesn’t grow in a vacuum. It grows within an economy shaped by workforce participation, consumer demand, innovation, and trust in institutions. When large segments of the population are excluded from opportunity, the economy runs below capacity, and investors ultimately feel the drag.

Economic Empowerment as a Growth Engine

Economic empowerment centers on people having the skills, resources, and agency to earn a sustainable living and participate meaningfully in economic decision-making.1  Core pillars include access to stable employment, financial literacy, education and career pathways, entrepreneurship, and fair access to capital.

When these building blocks are unevenly distributed, wealth gaps persist and economic potential remains untapped. While Black entrepreneurship in the U.S. has grown meaningfully in recent years, the racial wealth gap remains wide.2  This in turn limits long-term capital formation, investment participation, and consumer spending power. From an investor’s perspective, inequality translates to smaller addressable markets and slower aggregate growth.3

Conversely, when more people can earn, save, invest, and build businesses, the benefits ripple outward: stronger communities, deeper labor markets, broader consumer demand, and more durable economic expansion.

Diversity as a Financial Signal, Not a Slogan

Diversity and inclusion are often framed as cultural initiatives, however, data increasingly positions them as economic indicators. Companies with diverse leadership teams consistently outperform peers on innovation, profitability, and growth.4  Research shows these firms generate a higher share of revenue from new products and services and demonstrate stronger margins than less diverse competitors.

Why is this? Diverse teams bring broader perspectives, challenge groupthink, and better anticipate customer needs. These are critical advantages in fast-changing markets. Importantly, these benefits compound when diversity reaches leadership and governance levels and is embedded into strategy, not siloed within HR.5

For investors, diversity metrics can serve as proxies for human capital management quality, adaptability, and long-term competitiveness.

Where ESG Investing Fits In

This is where ESG investing (environmental, social, and governance) can come into play. This strategy evaluates companies not just on traditional financial metrics, but also on how they manage material non-financial risks and opportunities. In doing so, ESG investing can influence how capital flows toward – or away from – economic empowerment and diversity.

 

  • Environmental factors assess exposure to climate risks and resource efficiency.
  • Social factors examine how companies treat employees, support diversity and inclusion, manage supply chains, and impact communities.
  • Governance factors evaluate board structure, transparency, accountability, and ethical oversight.

Under the social and governance pillars, workforce diversity, pay equity, leadership representation, and inclusion practices have become standard indicators. Investors increasingly expect disclosures around these metrics to understand how a company attracts talent, manages risk, and sustains performance.

Economic empowerment and diversity influence who participates in markets, who builds businesses, who leads companies, and who accumulates wealth.

ESG as a Tool for Inclusive Growth

ESG investing connects capital allocation to measurable outcomes tied to economic empowerment. Investors can favor companies that expand access to banking, credit, housing, healthcare, and digital services while helping individuals and small businesses participate more fully in the economy.

The social pillar also incentivizes fair labor practices, safe working conditions, career development, and local hiring. By assigning financial weight to these factors, ESG investing rewards firms that create stronger talent pipelines and more inclusive opportunities, particularly for historically excluded groups.

Some ESG-aligned strategies go further by targeting community development through investments in affordable housing, infrastructure, and small business lending. These efforts help close capital access gaps that contribute to persistent wealth disparities, while also supporting long-term economic stability.

Why This Ultimately Matters to Investors

According to McKinsey & Company, economic empowerment and diversity matter because they influence returns, volatility, and downside risk:

 

  • Economies with broader participation grow larger and more resilient over time.
  • Companies with inclusive leadership are more likely to innovate and outperform peers.
  • Weak diversity and governance practices increasingly signal reputational, legal, and talent risks.

ESG strategies allow investors to integrate these realities by aligning portfolios with inclusive growth. It also gives investors an active role through engagement and proxy voting, helping push companies toward better practices that support long-term value creation.

Black History Month reminds us that progress in economic inclusion doesn’t happen automatically. Rather, it’s shaped by where capital flows and how opportunity is structured. For long-term investors, understanding these dynamics isn’t about politics or trends. It’s about recognizing the forces that expand markets, strengthen companies, and sustain growth over time.

At Intrua, we believe thoughtful investing means looking beyond short-term performance and understanding the deeper drivers of long-term opportunity. If you’d like to talk through how ESG strategies, economic empowerment, or diversity considerations may fit into your broader financial strategy, your advisor is always here as a resource.

1      https://www.weforum.org/stories/2025/01/resilient-inclusive-economies-diversity-equity-inclusion/
2    https://home.treasury.gov/system/files/306/24-Racial-Equity-Progress-Report-FINAL-update-508.pdf3    3        https://www.epi.org/publication/inequalitys-drag-on-aggregate-demand/
4    https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact  

5     https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation