Faith-based investing has gained ground as more religious institutions and investors embrace impact investing as a way to align their values and their portfolios. That can mean anything from eschewing companies profiting from products deemed harmful to the planet and its people to filing shareholder resolutions at annual corporate meetings.
While much of this activity has happened in silos, interfaith collaboration could be a way to bolster these investors’ efforts, as the work of a few pioneering groups has already shown.
The Benefits of Interfaith Collaboration
Despite their differences, many religions share similar values such as the beliefs in justice, the alleviation of poverty, and stewardship of the earth. Many also share the desire to ensure that their investments do not conflict with their convictions.
At the same time, impact investors tend to benefit from network-building. For example, collaboration can facilitate the sharing of information and strategies, especially important in a still-developing field. Investors can also hone their efficiencies by avoiding duplication of effort and sharing costs and responsibilities. A coordinated effort can also boost organizations’ impact. The bigger the alliance, the more influence it is likely to have when engaging with companies to drive change.
Consider the Principles for Responsible Investing, an initiative that partners with the United Nations Environmental Programme Finance Initiative and the UN Global Compact to support its over 2,300 signatories in integrating environmental, social, and governance (ESG) issues into investment decisions. For example, 36 institutional investors representing approximately $2.9 trillion in assets under management recently asked 41 portfolio companies for improved tax transparency disclosure. As a result, among the 33 companies that responded, the number of global tax policies published increased from seven in 2017 to 23 in 2019.
Interfaith Collaboration in Action
Though the emphasis among faith-based investors has largely been on uncoordinated activities, a few noteworthy instances of interfaith collaboration point to its wider promise. Perhaps the prime example of such efforts in the US is the Interfaith Center on Corporate Responsibility (ICCR). Founded in 1971, the coalition of over 300 global institutional investors represents more than $500 billion in managed assets. Its mission: “Through the lens of faith, ICCR builds a more just and sustainable world by integrating social values into corporate and investor actions.” Activities include conducting approximately 300 dialogues a year with more than 200 companies, filing shareholder resolutions (over 300 in 2017), hosting industry gatherings, and participating in policy advocacy.
Founded just a few years after the ICCR, Seventh Generation Interfaith Coalition for Responsible Investment is another coalition of faith- and values-driven institutional investors. Its 40 members, which include faith-based institutions and asset management companies in the Midwest, lead corporate dialogues, submit shareholder proposals, and vote proxies, among other activities.
A more recently initiated example of interfaith collaboration is the Jubilee Assembly, an umbrella forum for faith-based investing founded by Calvert Impact Capital. It brings together holders of Calvert’s Community Investment Notes, which invest in a portfolio of financial intermediaries, projects, and funds supporting high-impact organizations, as well as providing an avenue for promoting impact and low-income community investing. According to Calvert, “These investors represent various faiths and practices, but all share a common purpose: to create economic opportunity for disadvantaged people all over the world and to protect the planet.”