This Week in ESG and Impact Investing

  The Personal Consumption Expenditures (PCE) price index for February 2025 increased by 0.3% from the previous month, with the core PCE index—which excludes food and energy—rising by 0.4%.  These figures suggest an uptick in inflation, which has implications for Black and minority-owned businesses. Impact on Black and Minority-Owned Businesses: 1. Increased Operational Costs: A 0.4% rise in the core PCE index indicates that the prices of goods and services, excluding food and energy, have edged higher. For minority-owned businesses, especially those operating with limited financial buffers, this can lead to increased costs for supplies, utilities, and other essential services, potentially squeezing profit margins. 2. Consumer Spending Behavior: While the overall PCE increase was 0.3%, the core inflation rate suggests that consumers might experience higher prices in various sectors. This will lead to more cautious spending behaviors, impacting revenues for businesses that rely...

Future Of CDFI Fund And MBDA, Uncertain With Their Planned Ouster: Axing the federal agencies could lessen Black businesses' ability to access capital and grow revenues. The Community Development Financial Institutions Fund (CDFI Fund) has invested over $8 billion through various monetary award programs, helping underserved people and communities. The Minority Business Development Agency (MBDA) helped wrap up $3.8 billion in contracts for minority businesses in 2023. That drive is significant as it can help those firms, including Black-owned businesses, to scale up and potentially fuel revenue growth. However, the downside now is the CDFI Fund and MBDA — deep-rooted and bipartisan supporters of Black entrepreneurs and individuals, among others — are being cut by President Donald Trump. https://www.blackenterprise.com/future-cdfi-fund-mbda-uncertain-ouster/

It’s time for investors to step back and take a hard look at where the U.S. economy is heading—and the picture is not pretty. In fact, it’s downright terrifying. Donald Trump’s return to the political stage has not only rattled the global order but pushed the U.S. economy to the edge of a fiscal cliff. With a toxic cocktail of economic incoherence, erratic policy, and raw political chaos, the U.S. stock market has become a playground for what I call financial arsonists—the so-called "chaos monkeys" who thrive in the wreckage of responsible governance. Let me be blunt: U.S. stocks are a no-go zone. Radicalism Meets Recklessness Trump is no longer just flirting with radical economic policy—he’s embracing it with both hands, slamming the accelerator on trade wars, dismantling regulatory frameworks, and attacking the institutions that once underpinned American prosperity. He has gutted traditional alliances and dismantled the foundational tenets of post-World War II economic stab...

Recent executive orders aimed at downsizing essential government agencies such as the Minority Business Development Agency (MBDA) and Community Development Financial Institutions Fund (CDFI Fund) present serious risks to non-minority-owned businesses, local economies, and national economic stability. We have completed a comprehensive economic analysis, summarized below and  urgently needed to highlight the full scope of these risks. Economic Risks to Minority-Owned Businesses Minority-owned businesses significantly contribute to the national economy by creating jobs, fostering innovation, and promoting community development. Reducing or eliminating support from critical agencies like MBDA and the CDFI Fund directly threatens these businesses, leading to: Reduced Access to Capital: Funding shortages severely limit growth and sustainability. (Estimated Loss: $450 million) Loss of Technical Assistance: Business development support, including strategic guidance and capacity building, ...

In February 2025, the Producer Price Index (PPI) for final demand remained unchanged (seasonally adjusted), according to the U.S. Bureau of Labor Statistics. While stable overall, the underlying data reveals critical developments in specific sectors significantly affecting Black and minority-owned businesses. Sector-Specific Impacts on Minority Businesses Retail and Wholesale (Black and Hispanic-Owned Businesses) Key Insight: Prices for final demand services fell 0.2% in February, driven by decreased margins in retail and wholesale trade—specifically machinery and vehicle wholesaling (-1.4%) and food and alcohol retailing. Impact: Black and Hispanic-owned businesses in auto retail, apparel, and food retailing face tighter profit margins. Lower wholesale margins can squeeze profitability, particularly for small businesses operating with already narrow margins. Strategy: Businesses should optimize inventory and seek direct relationships with suppliers to minimize intermediary costs and m...

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2% in February 2025 on a seasonally adjusted basis, following a 0.5% increase in January. Over the past 12 months, the all-items index increased 2.8% before seasonal adjustment. The index for all items less food and energy rose 0.2% in February and is up 3.1% year-over-year. Inflationary pressures continue at a higher than 2% target level rate. Cost increases in shelter, transportation, and services continue to affect minority-owned businesses across various industries. Industry Analysis: 1. Retail & Consumer Goods (Black and Hispanic-Owned) Impact: Food at home prices were unchanged, but food away from home rose 0.4%, indicating ongoing cost pressures for restaurants and hospitality. Apparel rose by 0.6%, potentially affecting profitability positively for minority-owned retail businesses specializing in clothing and personal accessories. Strategic Advice: Retailers must balance pricing strategies carefully, considerin...

  Over the past three days, financial markets have been rocked by sharp declines , triggering fears of an economic slowdown and reigniting discussions on the fragility of our financial system. While traditional analysts focus on technical indicators, Federal Reserve policy, and corporate earnings reports, impact investors must look deeper. We see this moment as an opportunity to reassess how capital is allocated, who benefits, and what structural reforms are necessary to create a market that serves broader societal needs, rather than just the wealthiest stakeholders. The Root Causes: Beyond the Headlines Much of the recent decline has been attributed to geopolitical tensions. While these are significant factors, they fail to capture the broader systemic weaknesses that have been present for years: Overleveraged Growth – The market has long been propped up by artificially low interest rates and speculative investment rather than sustainable, impact-driven business models. Wealth Con...

Early: Our February 2025 Unemployment Forecast The February 2025 Employment Situation report from the Bureau of Labor Statistics (BLS) showed a total nonfarm payroll employment increase of 151,000 jobs and a stable unemployment rate of 4.1%. However, our forecast, as published on Impact Investing Online , still anticipates a worsening employment situation by March 2025. Below, we note how our early projection remains valid despite the Feb. BLS data. Survey Timing and Lagging Indicators The BLS employment survey captures data up to February 15, 2025. This means that recent economic developments, corporate layoffs, and market slowdowns that occurred in the latter half of February are not reflected in the reported numbers. Our forecast accounts for these expected deteriorations, which have yet to fully materialize in official statistics but are likely to be evident in the March report. Sectoral Employment Trends and Declining Federal Employment The February report shows job gains in healt...

The Internal Revenue Service holds a massive trove of sensitive data about American taxpayers that would be of inestimable value to a company operating in the private sector. Protecting it is a matter of national security, writes William Michael Cunningham. Banks and financial institutions should be especially alarmed by the possibility of exploitation of government financial data by the so-called Department of Government Efficiency, or DOGE, led by billionaire Tesla Founder Elon Musk. This isn't merely a regulatory or privacy issue — it strikes at the heart of the financial system that banks depend on for stability and accurate credit assessments. Reliable data is critical for risk management, lending decisions and maintaining consumer confidence. When such data is misappropriated, it can distort market signals and upend established financial practices. At the core of this crisis is a dataset of staggering value. The IRS' comprehensive historical record — encompassing income, ...

Report: Black Folks Could Make Up Almost 80K Of Employees Out of Work After February Job Cuts, Primarily In Government Sector Black workers overrepresented in the public sector are more vulnerable to job losses.  https://www.blackenterprise.com/report-black-folks-could-make-up-almost-80k-of-employees-out-of-work-after-february-job-cuts-primarily-in-government-sector/

The recent ADP National Employment Report reveals that private sector employment increased by 77,000 jobs in February 2025, marking the smallest gain since July 2024 and falling significantly short of the anticipated 140,000 jobs.  Sector-Specific Performance: • Goods-Producing Sector: Added 42,000 jobs, with construction contributing 26,000 and manufacturing 18,000.  • Service-Providing Sector: Gained 36,000 jobs. Notably: o Leisure and Hospitality: Increased by 41,000 jobs. o Professional and Business Services: Added 27,000 jobs. o Trade, Transportation, and Utilities: Decreased by 33,000 jobs. o Education and Health Services: Declined by 28,000 jobs. o Information Sector: Reduced by 14,000 jobs. Implications for Unemployment Rates: Given this slowdown, the unemployment rates for February 2025 are projected as follows: • Overall U.S. Unemployment Rate: Expected to rise from 4.0% in January to 4.2%. • Black Unemployment Rate: Projected to increase from 6.4% ...

Creative Investment Research has revised its February 2025 unemployment forecast ahead of the March 7, 2025, Bureau of Labor Statistics (BLS) report, incorporating worsening economic conditions reflected in the latest Atlanta Federal Reserve GDPNow projections. The U.S. economy is now expected to shrink by 2.8% in Q1 2025, a sharp downward revision from -1.5% just days earlier, signaling deeper-than-expected economic contraction and potentially accelerating job losses across key industries. The latest data show that personal consumption expenditures growth has fallen to 0.0%, indicating a near standstill in consumer spending, while private fixed investment growth has dropped to 0.1%, reflecting a sharp pullback in business investment. These factors are expected to have a direct impact on the labor market, leading to a more pronounced rise in unemployment than initially forecast. Revised Unemployment Forecast for February 2025 1. Overall Unemployment Rate Likely to Rise to 4.2% An inc...