Faith and Its Role in Environmental, Social and Governance (ESG) Investing

Faith and Its Role in Environmental, Social and Governance (ESG) Investing

All across the world, faith-based investing has risen in popularity, with the past year leading many individuals to reassess what is most important in their lives. Some are looking to make meaningful change at a personal level, and many Catholic families report feeling a closer connection to God.

Simultaneously, investments flowing into environmental, social and governance (ESG) funds have skyrocketed, with CNBC reporting more than $50 billion dollars in net new capital in 2020. For those unfamiliar, ESG investing is the process of investing your money into companies that score positively in the three criteria that make up ESG. For example, ESG funds may invest in companies that produce solar power, offer a diverse C-suite or contribute a portion of their profits to charity.

In many ways, faith-based investing is similar to ESG investing. Our approach at Faith Investor Services actively seeks to invest in companies that support Catholic values, while staying away from those that do not ― for example, companies that are involved in weapons of mass destruction manufacturing, abortifacients or pornography. Often, the types of businesses that are screened out via our investment approach are also avoided by funds guided by ESG principles.

Additionally, we look for companies that actively strive to create value for investors while effecting the change we want to see in the world. If you are interested in ESG investing that also puts your faith first, below are some examples of how these two approaches can be intertwined.

Faith and the Environment 

Psalm 24:1: “The earth is the Lord’s and all that it holds.”

As Catholics, we have been taught that God provided us with the Earth and the gift of life. In doing so, He charged us with the responsibility to tend to and take care of both. While there are many ways to do so, Faith Investor Services seeks to offer investors access to companies that are taking steps to improve their environmental footprint. In all aspects of your life, striving to better the world we live in is important. That’s why we aim to help make an impact with your investment dollars by ensuring they are aligned with companies that emphasize this crucial aspect.

Faith and Social Good

Acts 20:35: “In all things I have shown you that by working hard in this way we must help the weak and remember the words of the Lord Jesus, how he himself said, ‘It is more blessed to give than to receive.’”

Throughout our daily lives, we should always seek to help others. That same principle should be applied to the companies in which we invest, and through which we grow our wealth. Investing with social good at the forefront of our strategy means focusing on companies that promote just wages and a positive workforce environment, while seeking to help others through business activities like building affordable housing.

Faith and Governance

Proverbs 29:2: “When the righteous thrive, the people rejoice; when the wicked rule, the people groan.”

As individuals of faith, we are often called upon to support those around us through charity work and donation. We achieve the change we want to see through our example and leadership. In business, we want to invest in companies that have sound, moral leadership and govern their operations in a just way. Moral leadership is critically important in Faith Investor Services’ approach, as we seek to identify companies that exemplify this guiding principle.

If you are interested in learning more about faith-based investing and how you can align your investments with your values, while supporting businesses that make the changes you want to see in the world, we encourage you to reach out to Faith Investor Services and let us show you how we can help.

Related Topics

Investing is fraught with decisions, even more so if you aim to live by specific principles. After all, if you seek to uphold Catholic values, how can you feel good about investing in products or policies that don’t align with Church teaching?

Faith Investor Services (FIS) has teamed up with Knights of Columbus Asset Advisors (KoCAA) to create a Catholic faith-based exchange-traded fund (ETF)—the FIS Knights of Columbus Global Belief ETF (ticker KOCG).

Privacy Policy

Carefully consider investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the KOCG Prospectus available by clicking here. Read all materials carefully before investing.

Fund Risks:
There is no guarantee the Fund’s investment strategy will be successful and you can lose money on your investment in the fund. Shares may trade at a premium or discount to their NAV in the secondary market. The fund is new and has limited operating history to judge.

Market Risk. The prices of securities held by the Fund may decline in response to certain events taking place around the world, including those directly involving the companies whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency, interest rate and commodity price fluctuations. Emerging Markets Securities Risk. The Fund’s investments in emerging markets securities are considered speculative and subject to heightened risks in addition to the general risks of investing in foreign securities. Unlike more established markets, emerging markets may have governments that are less stable, markets that are less liquid and economies that are less developed. Active Management Risk. The Fund is actively managed, which means that investment decisions are made based on investment views. There is no guarantee that the investment views will produce the desired results or expected returns, which may cause the Fund to fail to meet its investment objective or to underperform its benchmark index or funds with similar investment objectives and strategies. Catholic Values Investing Risk. The Fund considers the USCCB Guidelines in its investment process and may choose not to purchase, or may sell, otherwise profitable investments in companies which have been identified as being in conflict with the USCCB Guidelines. This means that the Fund may underperform other similar mutual funds that do not consider the USCCB Guidelines when making investment decisions.

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