Introducing FREEIN: Social Impact Meets Financial Returns (3/3)

This post is part of a three-part series about The Decarceration Index (FREEIN), the first index to track the performance of companies engaging in fair chance hiring practices as well as managing their exposure to prison risk. To be notified about future posts, follow our LinkedIn.

In parts one and two of this series, we’ve seen how The Decarceration Index (FREEIN) empowers investors to align their portfolios with their values by tracking companies that lead in fair chance hiring. This approach supports the reintegration of justice-impacted individuals, helps reduce mass incarceration, and promotes broad economic growth. Now, in part three, we turn to the key question: How does FREEIN perform financially?

FREEIN’s Financial Performance

Over a 3-year back test, FREEIN outperformed the market by 4.8 percentage points, delivering a 39.38% return versus 34.58% for the broad-based S&P500 as of October 18, 2024. While past performance does not dictate future gains, this suggests that socially responsible investing — such as investing in companies that prioritize fair chance hiring while reducing their connections to prisons — can potentially yield competitive financial returns.

How FREEIN Works

Curious about how we identify companies that prioritize fair chance hiring? Our Decarceration Index is weighted by free-float market capitalization, further refined by each company's Criminal Justice Lenses score, and rebalanced quarterly. This ongoing adjustment ensures that we are always supporting companies that demonstrate accountability in criminal justice reform.

For institutional investors or those with commitments to equitable governance, the Index provides an opportunity to reward companies doing the right thing. It's about more than just avoiding harmful companies—it's about actively shifting capital to positive players.

Next Steps

Want to learn more about our screening process or how to leverage our data for greater transparency and values alignment in your investments? Let’s connect. We’re always open to conversations about how to use data for impactful investment strategies.