Andreessen Horowitz-Funded OpenInvest Updates ESG Cause to Expose Companies Supporting Prison Labor and Immigrant Detention Facilities While Highlighting Those Committed to Hiring Formerly Incarcerated People

OpenInvest, a leading values-based financial technology, today launched a newly updated Divest from the Prison Industrial Complex (PIC) Cause that helps investors divest from companies that profit from prison labor or are involved with immigrant detention facilities and invest in companies committed to hiring formerly incarcerated people.  

The United States has the world’s highest prison rate, and it’s fueled by a burgeoning prison industry, with more than 4,100 companies that capitalize on mass incarceration including those using inexpensive prison labor. At the same time, however, some companies are working to reduce recidivism through fair chance hiring. 

OpenInvest’s Prison Industrial Complex Cause Investment and Divestment Lists

The PIC Cause helps investors dynamically build portfolios by overweighting companies that are committed to employing formerly incarcerated job seekers by signing the Obama administration’s Fair Chance Business Pledge. It also underweights corporations that use prison labor directly or in its supply chain involved with immigrant detention facilities, engage in pro-incarceration lobbying, or financially support the sector.

Invested Companies 

The PIC Cause investment list includes 21 companies that signed the Fair Chance Business Pledge and spans several industries, including:

• Food, beverage and personal products: Coca Cola, Hershey, Kellogg, Pepsi, Starbucks, Unilever

• Financials: Prudential Financial 

• Retail: Best Buy, Gap, Kroger, Target, Under Armour (both tickers UA and UAA)

• Technology: Dropbox, Facebook, Intel, and Xerox

• Transportation: American Airlines, Lyft, and Uber

• Healthcare: CVS Health Corp

• Professional services: TrueBlue Inc

Divested Companies

OpenInvest added more than 120 companies to its divestment list, including Barclays, Allstate and Canon. The list includes several companies such as Google parent Alphabet, Amazon, AT&T, and Aramark, that are involved with immigrant detention facilities. Amazon in particular has given cities across the country access to its facial recognition software and offered it to the U.S. Immigration and Customs Enforcement. 

The Cause also moved several companies previously on its investment list to its divestment list. One example is Walmart, which had declared it would not tolerate forced labor or prison labor in its supply chain but later acknowledged that some of its U.S. suppliers use prison labor. 

Industry Trends

IT and Industrials ranked worst among sectors due to their significant participation with immigration detention centers, including Microsoft and Lockheed Martin. Additionally, OpenInvest analysts found the Industrials and Materials sectors make up nearly half (47%) of the companies that benefit from prison labor, including Sherwin-Williams, 3M, and FedEx.

Several big banks improved their scores after announcing they would no longer provide financing to the private detention sector. Those banks include JPMorgan Chase, Wells Fargo, Bank of America, SunTrust, BNP Paribas, Fifth Third Bancorp, Barclays and PNC Financial Services, representing an estimated $2.35 billion, or more than 87% of the financing behind the two largest private prison companies, CoreCivic and GEO Group. However, these banks remain on the divestment list because their declarations refer to future loans only, not their existing financial agreements that reach maturity in 2023-2024 and their failure to address past involvement by providing banking and financial services to prisons. Several of these banks also have business dealings with immigration detention facilities.

“In the U.S., tens of billions of dollars are poured into the prison industry through contracts with vendors including health care providers, food suppliers and commissary merchants every year,” said Josh Levin, co-founder and Chief Strategy Officer of OpenInvest. “Our newly updated Divest from the Prison Industrial Complex Cause allows advisors to create bespoke investment strategies for their clients that reject the exploitation of incarcerated people, repudiate the market for prison labor, and easily divest from the companies capitalizing on mass incarceration.”

Behind the Data

Initially launched in 2019 and updated this week, the PIC Cause includes 220 companies in total marked for investment or divestment. OpenInvest sourced these companies and built the Cause using an analysis of indicator-level data points, including public disclosures, proprietary metrics, and insights from five leading databases:

• The Obama Administration’s Fair Chance Business Pledge signatories

• Companies noted on the American Legislative Exchange Council’s (ALEC) Private Advisory Council

• The American Friends Service Committee Prison Divestment List

• In The Public Interest’s report on banks financing private prisons 

• Worth Rises’ Mapping Private Sector Players report 

For more information on the OpenInvest PIC Cause and to see how OpenInvest can help your clients align their portfolios with their values, visit here. 

*References to any particular entity should not be considered as a recommendation by OpenInvest

About OpenInvest

OpenInvest is a values-based financial services company that helps advisors engage their clients and grow their business. We offer environmental, social, governance (ESG) investment management products and impact reporting services. Our investment management solutions use proprietary technology to seamlessly create low-cost investment portfolios tailored to our clients’ values while tracking market indices. Our sophisticated impact reports reflect the tangible impact our clients’ portfolios have on the world. Funded by YC and Andreessen Horowitz, OpenInvest is one of the only VC-backed Public Benefit Corporations. Learn more at openinvest.com.

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