This Week in ESG and Impact Investing

On July 25, 2024, the Bureau of Economic Analysis (BEA) released the first estimate for Gross Domestic Product (GDP) for Q2 2024 and GDP by industry. These indicators provide critical insights into overall US economic health and have significant implications for minority-owned businesses. GDP Growth and Minority Firms:  The estimate for GDP in Q2 2024 indicates a growth rate of 2.8%. This is a good sign, suggesting the economy is expanding at a faster clip than most economists expected. For minority-owned businesses, higher economic growth should lead to greater availability of credit and investment opportunities, vital for the sustainability of minority enterprises. Still, the benefits of this growth is not equitably distributed . Minority-owned businesses face increased competition without proportional access to the resources needed to compete effectively. Industry-Specific Insights:  Industry data for Q2 2024 reveals sector-specific performance that is crucial for understanding th

  America's Racial Wealth Gap in 8 Graphs The racial wealth gap in the United States represents one of the most persistent and pressing issues of economic inequality. The latest infographic by Eric Gordon and Luke Newton, "America's Racial Wealth Gap in 8 Graphs," offers a stark visual representation of this disparity, highlighting the urgent need for targeted interventions and systemic change. Here’s a breakdown of the key findings from the infographic: Economic Cost and Opportunity The Black-white wealth gap is not just a social and moral issue—it has significant economic implications. The gap is expected to cost the US economy $1 trillion to $1.5 trillion per year by 2028. By closing this gap, US economic output (GDP) could be 4-6% higher in 2028. This potential for growth underscores the importance of addressing racial wealth disparities not only for social equity but also for economic prosperity. Industry Representation The infographic reveals that only five indu

  Data, Impact, and Accountability: Lessons from the 2024 Aid Transparency Index On July 16th, the Center for Sustainable Development at Brookings hosted “ Aid data, impact, and the Sustainable Development Goals ” to spotlight the 2024 Aid Transparency Index launch. The event featured presentations by Gary Forester , Publish What You Find CEO, and Laurel Patterson , Director for SDG Integration at the United Nations Development Programme, Global Policy Network. Brookings Senior Fellow George Ingram then moderated a panel discussion consisting of Christophe Tocco , Senior Deputy Assistant Administrator at USAID, Zacharey Carmichael , Senior Economist for Agriculture & Food Global Practice at the World Bank, and Samuel Kobina Annim , Professor of Economics and Head of the Ghana Statistical Service. Forester’s presentation focused primarily on what was revealed in the 2024 Aid Transparency Index , which surveyed over 166,000 independent aid projects. The index achieved its hig

Luke Nelson (left) and Eric Gordon (right) at the Semafor Fintech Conference Insights from Semafor’s “Banking on the Future: The Next Era of Fintech” Conference Last week, the global news organization Semafor hosted a conference featuring prominent fintech leaders discussing the industry's future amid recent technological, political, and legal developments. Fintech is fundamentally reshaping financial systems, influencing consumers' daily lives worldwide, often without their explicit recognition. At the conference, I was particularly captivated by discussions on the scale of Fintech’s adoption, the impact of Section 1033, and the implications of advancements in artificial intelligence. Witnessing industry leaders discuss their excitement about the future revealed the collaborative efforts driving technological and regulatory innovation in the Fintech sector. Fintech is here to stay: Nearly 9 out of 10 people today utilize Fintech applications, and the average person uses 3 to 4

The semi-annual Senate Banking Committee hearing was held on July 9 with the Chairman of the Federal Reserve, Jerome Powell, as witness. While the hearing may not have been particularly eventful, it served as a lesson on the link between American monetary policy and politics. It also provided insight on what's in store for the US economy.  The United States Senate Committee on Banking, Housing, and Urban Affairs is chaired by Senator Sherrod Brown (D - OH) with Tim Scott (R - SC) serving as the ranking member. Both began the hearing by thoroughly dressing down Chairman Powell for the state of the economy over the last few years. Their opening statements served as a strong display of political grandstanding with little sincerity behind their words. Chairman Brown blamed the increase in price levels and inflation on corporate greed and constantly referred to 'the good citizens of Ohio' that he represented, while Tim Scott spent his time attacking Bidenomics and fear mongering

According to a new report from Oxfam America, "a much larger percentage of Black Americans, particularly women in that group, now make less money than their peers nationwide. While 23% of all U.S. workers are bagging low wages as defined in a report under $17 an hour, the proportions are much higher when broken down by race and gender. Some 32% of Black workers earn less than $17 an hour, versus 21% of white workers, based on a fresh analysis by Oxfam, which describes itself a global organization fighting inequality to end poverty and injustice. And 35% of Black women earn low wages, compared to 29% of Black men, 25.9% of white women, and 17.4% of white men." William Michael Cunningham, (CEO, Creative Investment Research), declared that the lack of federal action on increasing the minimum wage and reducing income inequality led to wider gaps and more significant hardships for the communities. He voiced Black women are often doubly disadvantaged due to both racial and gender d

The Producer Price Index (PPI) for final demand increased 0.2 percent in June, following a period of stability in May and a 0.5 percent rise in April, as reported by the U.S. Bureau of Labor Statistics. Over the past 12 months, the index for final demand rose by 2.6 percent, well below the 11.7% increase in March, 2022. Breakdown of June's PPI Changes: Impact on Minority-Owned Firms Minority-owned firms, which often operate in sectors such as retail, transportation, and warehousing, can be significantly affected by fluctuations in the PPI: 1. Retail Sector: The rise in margins for trade services and retailing, including automobiles, fuels, and lubricants, could lead to higher costs for minority-owned retail businesses. This could squeeze profit margins unless these costs can be passed on to consumers. 2. Wholesale Trade: Minority firms involved in machinery, vehicle, and professional equipment wholesaling might benefit from higher margins. However, those dealing in machinery and eq

Chart of the Consumer Price Index, June 2024 . The June, 2024 Consumer Price Index for All Urban Consumers (CPI-U) declined by 0.1 percent on a seasonally adjusted basis, following no change in May. Annually, the all items index saw a 3.0 percent rise before seasonal adjustment. Key Changes in CPI Components: - Gasoline: Prices fell by 3.8 percent in June, building on a 3.6 percent decline in May, contributing significantly to the overall decrease in the index. - Energy: Overall energy costs declined by 2.0 percent for two consecutive months. - Food: There was a modest increase of 0.2 percent in June, with food away from home rising by 0.4 percent and food at home by 0.1 percent. - Other Items (Excluding Food and Energy): This category saw a 0.1 percent rise in June, down from a 0.2 percent increase in May. Increases were noted in shelter, motor vehicle insurance, household furnishings and operations, medical care, and personal care. Conversely, there were decreases in airline fares, u

The graphic above shows unemployment rates across different racial and ethnic groups from April 2023 to June 2024. The picture reviews unemployment rates for White, Black, Asian, and Hispanic or Latino populations. The data indicates fluctuations in unemployment rates between and among these groups, with disparities that warrant further examination. Trends and Observations 1. White Population: The unemployment rate for Whites has shown minor fluctuations, generally staying between 3.10% and 3.50%. The lowest recorded rate was in April 2023 (3.10%), and the highest was observed in October and December 2023, and June 2024 (3.50%). This demographic shows the least variation in unemployment rates compared to others. 2. Black Population: Blacks traditionally experience the highest volatility in unemployment rates, with a 0.2% increase in June 2024.  The rate increased from 4.80% in April 2023 to a peak of 6.40% in March 2024, before decreasing to 5.6% in April 2024. From April to June 2024,

Just five miles from downtown Washington D.C. is Amazon HQ2. Its location symbolizes the tech giant's expanding footprint in government circles, as Amazon Web Services (AWS) continues to secure public sector contracts with substantial implications for national security, data privacy, and the concentration of new technological power. AWS's role as the primary cloud service provider for the US government will increasingly shape policies, operational infrastructure, and public services, bearing great significance for the country given its dominant position in the emerging Cloud Computing-Industrial Complex . When Amazon began its search for a headquarters expansion location in September 2017, 238 cities submitted incentive proposals that included competitive tax breaks and cash grant offers, anticipating 50,000 new jobs and a local economic boost . By January 2018, only 20 finalists remained, and in November of that year, Amazon announced Long Island City in Queens, New York, an

Daniel Merritt, a Creative Investment Research intern and American University Washington Semester student found "a community at the Kogod School of Business, gaining valuable experience through internships, coursework, and research on sustainable business practices." Read more about his experience at  https://kogod.american.edu/news/navigating-an-action-packed-semester-in-dc As we noted, "in a pioneering move that merges environmental sustainability with financial analysis, Creative Investment Research Analyst Daniel Merritt has introduced a revolutionary set of metrics aimed at redefining equity analysis."  Read more about his groundbreaking work at  https://www.prlog.org/13015813-creative-investment-research-unveils-groundbreaking-climate-financial-metrics.html

On June 27, 2024, the Bureau of Economic Analysis (BEA) released the third estimate for Gross Domestic Product (GDP) for Q1 2024, alongside revised estimates for corporate profits and the GDP by industry. On June 28, 2024, the Personal Consumption Expenditures (PCE) index reported a year-over-year increase of 2.6% in May 2024. These indicators provide critical insights into the overall economic health and have significant implications for minority-owned businesses. GDP Growth and Minority Firms The third estimate for GDP in Q1 2024 indicates a growth rate of 1.4%. This positive growth is a good sign, suggesting that the economy is slowly expanding. For minority-owned businesses, the increase in GDP can be a double-edged sword. On one hand, higher economic growth can lead to greater availability of credit and investment opportunities, which are vital for the sustainability of minority enterprises. On the other hand, if the benefits of this growth is not equitably distributed , minority-

On Wednesday, June 26, 2024, I had the honor to attend a screening of the documentary, “Every Last Mile: The Untold Story of Connecting Rural America,” hosted by the Washington Post. The documentary showcases the recent legislative push to connect rural communities to high-speed internet access. The event also featured a Q&A session after the screening with Rural Utilities Service Administrator Andrew Berke and Virginia’s broadband office director Tamarah Holmes. The documentary focused on three crews working to connect communities in King Cove, Alaska, Lakewood Township, Minnesota, and Congress, Arizona. Be it the freezing temperatures of Alaska, the rocky soil of Minnesota, or the debilitating heat of the Arizona desert, the documentary showcased the environmental challenges these crews must overcome. Moreover, some of the most grueling projects will only be connecting very small communities, a result that doesn’t match the herculean effort required to obtain it. Existing utiliti

  William Michael Cunningham, Creative Investment Research and  Thaddaeus Dawson, Founder,  10K Minority  Appraisers Foundation The 10K Minority Appraisers Foundation (10KMA) has achieved impressive success, yet its mission to foster an equitable, modern appraisal industry is just beginning. The Department of Labor’s recent certification of the 10KMA national appraiser apprenticeship program marks a pivotal milestone in this journey. On Tuesday, June 25, 2024 at the Westin Hotel in Crystal City, VA, I had the privilege of attending a reception to celebrate this historic, first-ever certification. The excitement was palpable, as this signing represents a significant stride in fostering and empowering the next generation of appraisers, harnessing their distinctive perspectives and skills to enhance appraisal outcomes. Speeches from Foundation members and supporters, including CEO and founder Thaddaeus Dawson, emphasized the importance of diversity and the need to update outdated appraisa

Banks have a major role to play in supporting minority-owned businesses BankThink. American Bankers Newspaper. By William Michael Cunningham June 25, 2024, 10:00 a.m. EDT   The United States' economy is distinctly divided into two economies: the minority economy and the majority economy. This division is supported by empirical evidence highlighting significant economic disparities between minority groups and their white counterparts, particularly during economic downturns.   Minority populations, including Black, Hispanic and Native American communities, consistently face higher unemployment rates , lower income levels, and reduced access to capital . These disparities are further exacerbated during economic recessions. The Federal Reserve indicates that Hispanics, Blacks, Native Americans and other disadvantaged groups experience greater-than average unemployment rates over the economic cycle. For instance, during recessions, the unemployment rate for Black and Hispanic individu