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How to align your values through faith-consistent investing

Faith-consistent investing and smaller organisations

No act of faith is ever too small to make a difference. This is true even when faiths are dealing with large financial decisions around a topic as broad as investment. It is also the subject of an exciting new paper ‘Faith-consistent investing and Smaller Organisations’ from FaithInvest, the founding organisation of the Faith Plans framework.

The paper outlines the challenges – and offers some solutions – for smaller faith organisations seeking to reflect their values in their investments. But, first, it's important to understand the background to how we arrived to this point.

The importance of faith in finance

In 2017, at the ‘Faith in Finance’ meeting of faith groups in Zug, Switzerland, faiths discussed the need to align their finances with their beliefs and values. For the first time, dozens of traditions from eight of the world's major faiths – Buddhism, Christianity, Daoism, Hinduism, Islam, Judaism, Sikhism and Shintoism – published their investment priorities in the Zug Guidelines. The Zug Guidelines focus on how faiths can use their investments to support environmental and sustainable development for a better world. Now, more than 40 such guidelines exist, drafted by the faiths themselves, as faiths take a closer look at how their insurances, banking and investments stack up.

Nearly six years later, in 2023, groups are continuing to question whether their financial dealings are in alignment with their beliefs and values. However, many smaller organisations feel that they did not have the requisite knowledge, or the financial clout, to identify or rectify any misalignment. For example, how can faiths manage the inevitable trade-offs that are made between investment efficacy and customisation for faith-driven priorities?

To address this, FaithInvest —the founding organisation of Faith Plans—has published its 'Faith-consistent investing and Smaller Organisations' paper outlining how smaller faith groups can find solutions to these challenges.

Faith groups are already key stakeholders in the arena of global finance.

As Mathew Jensen, FaithInvest's Director of Investment Solutions, points out: "Together, faith groups hold billions of dollars of investments in the global stock markets, and growing numbers of faith groups are looking at whether those investments are truly aligned with their values. But, as our paper outlines, there are very significant challenges facing smaller groups in particular.'

"Together, faith groups hold billions of dollars of investments in the global stock markets, and growing numbers of faith groups are looking at whether those investments are truly aligned with their values." – Mathew Jensen, FaithInvest

Mike Even, a Co-founder of FaithInvest and lead writer on the paper, adds: "Operationalising faith values in an investment programme requires adding a new level of complexity to the already demanding job of managing risk and return. But many faith assets are not held in large, centralised investment pools, instead they are often relatively small, with limited resources, and this presents challenges."

Six Challenges

The executive summary of the paper identifies six distinct challenges faced by smaller faith organisations:

1. The greater oversight requirements of faith-consistent investing (FCI).

2. The need for customised versus off-the-shelf solutions to address unique faith values.

3. The uniformity of commingled pools of investments.

4. The need to apply FCI across multiple asset classes, including impact investments.

5. The resources required for engagement activities.

6. The education and support required for greater FCI participation by the lay faithful.

Three solutions

The paper goes on to highlight three potential solutions in particular:

1. Outsourced chief investment officer (OCIO) platforms;

2. Consultants with specialised knowledge; and

3. Networks of like-minded faith affinity groups.

Faith groups who have already taken action

Several faith groups have already tackled these issues, and the paper includes a number of helpful examples:

  • A single-faith-focused investment management and OCIO provider (Methodist and multi-denominational)

  • A single-faith network organisation (Jewish)

  • A faith-based investment management and OCIO provider (multi-faith, Catholic Social Teaching based)

  • A single-faith Impact Investing support network (Catholic)

  • A non-profit-focused OCIO services provider (multi-faith)

These demonstrate that it’s possible to address these issues, even if you had never even considered the topic before.

Getting started with faith-consistent investing

If your faith group identifies with the challenges listed above and is keen to start exploring the concept of managing your finances in alignment with your faith values, there are a number of things you can do:

When you’re ready to take the next step and delve deeper into this topic, please contact us here at Faith Plans and we will connect you with a person in FaithInvest who can help.


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