• Over the past few years, the public has become more aware of the widening gap in economic opportunities that rural Americans have experienced versus their urban counterparts. Obstacles to growth facing rural America include lack of access to capital to create jobs and poor infrastructure such as a lack of broadband Internet, quality healthcare, and local banking services. These challenges are exacerbated by the opioid epidemic.
• This economic divide could weigh on the U.S. economy and exacerbate divisions within American society.
• To analyze this issue, we have researched economic, government and academic reports on the topic and had relevant discussions with managers of rural foundations, CDFIs and asset management firms which invest in rural America.
• In this report, we highlight approaches to rural revitalization that have proven effective, particularly asset-based community development, which often involves a combination of philanthropic, public and private capital. We also highlight investment strategies that support this theme, as shown below.

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In recent years that has been a widespread increase in the general public’s awareness about structural racism and the many ways people of color have been systematically denied access to social and economic opportunity in the United States.

• The COVID-19 pandemic has exposed alarming weaknesses in the systems we depend on upon in everyday life in the U.S. – healthcare, education, and economic systems, to name just a few. It has cast a harsh light on the disproportionate impacts of these weaknesses on people of color. Moreover, there has been a dramatic growth in awareness of how the financial system has functionally been closed off to people of color.
• Investors can contribute to the narrowing of economic disparities by investing in communities of color. In this report, we update the findings of our original work in 2018. We also offer fresh insights into how investors are pressing companies to be more transparent and accountable regarding their policies, practices and cultures. We have added a section as well regarding support for diverse asset managers with strong track records who are often overlooked. Lastly, we are pleased to note that over the past two years there has been an increase in investment solutions that seek to address racial and ethnic economic disparities.

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We are pleased to present the 2020 Annual Impact Report. This report offers an annual analysis of the environmental, social and governance (“ESG”) space and discusses how Pathstone helps clients deliver positive impact across their portfolios. In addition, it provides an overview of how Pathstone continues to innovate and assimilate new technology into our process, as well as other initiatives related to impact investing.