Investment and mission can go hand in hand, says analyst

Ethical investment need not be just about avoiding bad investments. It can also help the church achieve its mission aims, says Ecclesiastical Insurance’s senior SRI analyst.

Speaking at a conference hosted by Barings last week, Neville White said there many new opportunities opening up in the area of SRI - socially responsible investment or ‘impact investing’ – which could allow faith investors to go beyond the conventional model of avoiding certain investments and financial activities, to proactively investing in a way that correlates their wider mission with the investment process.

He said: “Investment is changing and it should no longer be seen as a ‘vanilla’ common investment fund process – one size fits all. Sustainability is now a buzzword among boardrooms and asset managers.

“We’ve very definitely moved from applying an avoidance model to something truly complex and exciting.

“There is no better time than now to invest in an investment model whose time has come and where the ability to deliver real social benefits is only limited by the speed at which new products and services can come to market.”

Acknowledging that many churches avoid investing because they believe it is illegal or will not make any difference, Mr White sought to assure that SRI was theologically defensible because it puts the social return before the economic one. While traditional investment models seek an economic return, impact investing is about deploying capital in funds that generate social or environmental good as a definition of return, rather than a by-product.

SRI, White maintained, was another way in which the church could demonstrate good stewardship of the Earth’s resources, stand alongside humanity, and seek to change the world for the better from within.

“In exercising stewardship we want to be sure that the companies we invest in are responsible corporate citizens so engagement with business by shareholder owners is not only legitimate but essential for faith investors who, by raising their concerns, can help to change business for the better,” he said.

He pointed to micro-finance institutions in Africa that offer short-term loans to the poor, who are unable to access traditional banking services, and investment funds helping to develop housing for Mexico’s urban poor.

“It is very possible to achieve linking faith, money and mission ethically and responsibly, adding value to the investment mix as a contribution to your overall mission,” he said.

“To do this, though, will be a challenge. You will need to look at your service providers and fund managers. Will they have the zeal to help you to achieve that? It’s your right to challenge your managers to help you achieve your aims.”