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What is Faith-Based Investing? The definition and examples.
Below are resources defining faith-based investing. Also included are reports from leading faith-based organizations in the industry.
DefinitionImpact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets, and target a range of returns from below market to market rate, depending on investors' strategic goals.
The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education.
For many faith-based investors, values play a critical role in guiding their investment choices. Impact investing offers a vehicle for investors to move beyond screens and directly translate their values into measurable positive and intentional impacts while still pursuing their financial objectives.
Strategies and approaches by religion
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FIIND Impact Foundation – Faith Impact Project
Faith Values
These papers explore five of the world’s major religions in consultation with leading faith-based organizations (FBOs) to identify the overarching values of Buddhism, Catholicism, Islam, Judaism, and Protestantism. This research looks at how faith values can be contextualized against modern-day social and environmental challenges, and what role these values can play for faith-based investors who wish to address those challenges. FIIND Impact Foundation has aligned the values with SDGs, targets, indicators as well as exclusions.
A selection of FBI Hub Participants’ strategies and approaches
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Year of Impact 2020
The 2019/20 financial year has been a challenging but successful year for Christian Super. The Fund continued to perform strongly, with top quartile member growth and positive cash inflows. Christian Super’s investment team continues to work diligently to ensure its portfolio is optimized and well-positioned to navigate ongoing market volatility, and also opportunities in the current economic environment.
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Real World Impact: Creating a framework to target, manage and measure the social environmental impact of our investments
The fiduciary case for impact investing is clear: investing for financial returns and investing for positive social and environmental impact are not only compatible but mutually supportive. The Church Commissioners for England, motivated by moral principles of the Anglican faith, dedicated the resources to analyze the outcomes delivered by their £8.7 billion portfolio.
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Socially Responsible Investing
The Church Pension Fund’s Socially Responsible Investment (SRI) strategy remains focused on working with external investment managers who possess expertise in identifying investment opportunities that offer fully competitive risk-adjusted returns while providing a positive social impact. Importantly, the primary objective of the SRI approach is to earn returns that are sufficient to ensure that the benefits promised to current and future members are available when needed.
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Annual Accountability Reports
Since 2017, Mercy Investment Services has published an annual accountability report, highlighting its work for the fiscal year.
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Real Impact 2020 Report
Praxis Mutual Funds® has released Praxis Real Impact 2020, a report that seeks to communicate the many ways Praxis’ unique Stewardship Investing philosophy delivers real-world change through a range of impact strategies. The impact report is the first report of its kind for Praxis Mutual Funds and describes the firm’s longstanding commitment to impact investing. While the report mainly focuses on the impact generated in 2019, it laid the foundation for Praxis to respond to the unprecedented social and environmental challenges of 2020.
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Sustainable Investment Report
Wespath implements sustainable investment strategies for investment funds made available through it and its subsidiaries. Sustainable investment is the foundation of Wespath’s work to serve The United Methodist Church community. Sustainable investment activities strengthen the potential to consistently provide strong, long-term financial returns, helping stakeholders reach their investment objectives. This report highlights Wespath’s sustainable investment activities throughout 2019 and 2020.
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Why does it matter? The business and impact case.
These resources help make the business and impact case for investing in alignment with faith-based values.
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Advancing Faith Values Through Impact Investing
This overview guide is written for faith institutions and their investment professionals—internal finance staff and investment committees, as well as external advisors and consultants—as an introduction to impact investing and the opportunity it presents for their portfolios.
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Faith in Finance
This groundbreaking 84-page paper, published in 2016 by the Alliance of Religions and Conservation was commissioned by OECD and UNDP to explore the role of faiths as investors in the future, particularly in connection to the Sustainable Development Goals.
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Investing in the Future as a way of Repairing the Past
This article on Luther Seminary's Faith+Lead blog describes how many Christian churches in the United States have large amounts of "hidden" wealth in invested assets and property that can be used to address injustice.
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Reaching Impact through Islamic Investing
Since the 1970s modern financial institutions have introduced and strengthened the position of Islamic investing in the global economy. This article looks at the basics of Islamic Finance and how it creates opportunities for Impact Investing.
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Why Impact Investing is a Natural Fit for Faith-Based Investors
In this op-ed for Financial Advisor, Amit Bouri reflects on faith-based investors’ alignment with impact investing, tracing the history of their position at the “heart [of] values-based investing.” Bouri states that impact investing allows investors to “deepen the ties between their capital and their faith,” and encourages more institutions to join the practice due to the “momentum and appetite for faith-based investors to work with existing impact investors and organizations to design an impact approach that reflects both their faith and their financial requirements.”
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I Should Not Have to Check My Jewish Values At The Synagogue Door
This article explores the question, why does a synagogue community go to great lengths to ensure its kitchen’s kashruth, but allow its endowment to prosper from companies whose environmental, labor and community practices are at odds with Jewish values?
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Nun Funds: The Original Impact Investors
Decades before the community development sector began creating strategies to attract the assets of individuals for social causes, numerous congregations of Catholic nuns across the U.S. also called Women Religious, were doing just that—with little fanfare or recognition.
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Unleashing the Potential of Faith-Based Investors for Positive Impact and Sustainable Development
Due to the wealth, influence, values, and history of this group, faith-based investors have had a central role in driving the sustainable and responsible investment (SRI) movement. With their ingrained inclination for value-based investing and wealth management, it is no surprise that secular investors with an interest in sustainability have a lot to learn from faith-based actors.
Case Studies:
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Impact stories
Through conversation with eight asset owners and six fiduciary intermediaries, who can be placed across the various parts of the Spectrum of Capital and who are at different stages in the journey towards impact investing, FIIND Impact Foundation has developed individual case studies. These Impact Stories explore the nature of their organization as well as their values and their approach to faith-based investing, responsible investment, ESG, and impact. The objective of the impact stories is not to provide recommended advice, but simply to share their experience with peers.
Asset owners: Church Commissioners for England, De Protestantse Kerk, Missionary Sisters of the Sacred Heart of Jesus, Franciscan Missionaries of the Divine Motherhood, Nathan Cummings Foundation, Jewish Community Foundation of San Diego, Christian Super and Crescent Wealth, The English Sangha Trust, and International Waqf Fund.
Fiduciary Intermediaries: Protocolom, Oikocredit, The Central Finance Board of the Methodist Church (CFB) and Epworth Investment Management, Mercer/Pavilion, Ministry of Finance of the Republic of Indonesia, and The Oblate International Pastoral (OIP) Investment Trust/Missionary Oblates of Mary Immaculate.
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Faith Investor Profiles: Impact Investing Pioneers
Calvert Impact Capital’s Faith Investor Profiles series seeks to showcase these impact investing journeys, glean insights from leaders across faith communities, and inspire other faith investors to engage in impact investing.
Feature profiles of the following faith organizations:
Adrian Dominican Sisters – Portfolio Advisory Board, American Home Baptist Mission Societies, CommonSpirit Health, Everence Financial and Praxis Mutual Funds, Jewish Community Foundation of San Diego, Mercy Investment Services, Inc. and Mercy Partnership Fund, Missionary Sisters of the Sacred Heart of Jesus, Oblate International Pastoral Investment Trust, United Church of Christ (UCC) Church Building & Loan Fund
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Catholic Impact Profiles
The stories of Catholic Impact page is designed to help readers better understand how to implement Catholic Impact Investment in their own portfolio by learning from those institutions or individuals that are that have committed to exploring, implementing, or are actively deploying Catholic Impact Investments. The series also features relevant stories and updates that give insight to the broader field of Catholic Impact Investment.”
Franciscan Sisters of Mary, Catholic Relief Services, Ascension, The Congregation of Christian Brothers, School Sisters of Notre Dame, Bon Secours Health System, Society of Jesus, Catherine Donnelly Foundation, Mercy Investment Services, Franciscan Missionaries of the Divine Motherhood, Catholic Community Foundation of Minnesota, Adrian Dominican Sisters, Sisters of St. Joseph of Peace, Dominican Sisters
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Additional Catholic Case Studies & Interviews
These include a collection of case studies and interviews to provide insights, guidance and inspiration on faith-based investing.
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How do I do it? Guidance and Guidelines.
These select resources offer guidance on how to incorporate faith values into an investment strategy as well as a list of general rules, principles, or pieces of advice as they relate to faith and impact investing.
Guidance
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Faith and Impact Investing - Video
More and more people are trying to align their investing and gift-giving with their personal values, and for many, those values are rooted in faith. This webcast, explains the meaning and purpose of impact investing and how it can be used to better serve communities and clients of faith.
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Calculating Zakah on Modern Financial Assets - Video
Zakah refers to the act of purifying one’s wealth by giving a portion of it to those in need. When calculating zakah, many questions can arise. This presentation offers a brief introduction to the methodology for calculating zakah on modern financial assets
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Building an Impactful Faith Portfolio: A Foundational Guide to Impact Investing for Faith Institutions
This guide is written for faith institutions and their financial decision-makers—chief investment officers, finance staff, investment committee members, and financial professionals – seeking to incorporate impact investments into their portfolios. Calvert Impact Capital highlights the key steps and considerations, which include establishing an Impact Strategy and integrating it into investment policies and due diligence/sourcing questions. The guide includes many resources and examples from fellow faith investors and impact experts.
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Beginning Your Impact Journey: A Rough Road Map
A two-page primer, which identifies steps that successful investors often take in their impact journey.
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Catholic Social Justice Principles and Thought Leadership in Impact Investment
CIIC Steering Committee member Jason Dudek’s article explores what inspiration we might draw from our faith in the search for substance and spirit-led action in Impact Investment.
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Faithful Investing – Linking Faith and Finances - Video
The Church Pension Group (CPG) takes an intentional, strategic approach to socially responsible investing, but without the expertise and resources of a pension fund at their disposal, how do individual congregations and other smaller groups invest for their future while focusing on their values?
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Investing in a Livable Future: Bold Action Grounded in Catholic Social Teaching
Looking at the question “What would bold action in impact investing look like if we use Catholic Social Teaching as our starting point?,” this report provides a basic overview of the workshop for a broader audience and invites your collaboration to develop Catholic Social Teaching as a new ecumenical framework for bold action in the investment world.
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Faith-Driven Investing - Walk the Talk - Video
The 4th International Faith-Based Investment Conference, Faith-Driven Investing: Walk the Talk Africa-Europe Focus shares experiences of successful and challenging investment projects, strengthening impactful cooperation between faith partners and investors, and presenting tools to make projects investable.
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From Faith Values to Investment
All faith organizations document what they value in terms of social principles and environmental beliefs, but not all have integrated those values into their investing. From Faith Values to Investment provides a guide for ensuring that an organization’s faith values are reflected in its investments.
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Investing in a Better World
This report, published by the UK Government in September 2019, is the most comprehensive study of the UK public’s demand for sustainable investment opportunities. Most people said financial institutions should avoid investing in companies that harm people or the planet.
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The Journey to Impact Investing for Faith-Based Organizations
A step-by-step journey through the process of impact investing — from exploration and strategy through monitoring and optimization. This document can also support fiduciary intermediaries in how to best support faith-based organizations on their journey into impact investing.
The process of moving into impact requires time and varies per organization. Experience tells us that the full journey to an optimized impact investment portfolio can take between 6 months and 10 years, depending on your starting point, the complexity and size of your portfolio, and how thoroughly you follow each phase.
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Engaging Faith-Based Investors in Impact Investing: Insights on Financial Performance
Engaging Faith-Based Investors in Impact Investing outlines key insights from interactions with the faith-based investing community along with proposed engagement strategies that could be assumed by field-building organizations—like the GIIN and others—to support faith-based investors on their impact investing journey.
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Investment Insights for the Jewish Community to Further the UN Sustainable Development Goals
The goals in writing this report are twofold: (1) Highlight the alignment between the SDGs and Jewish teachings, and (2) Spark a conversation among Jewish communal leaders about the SDGs as a framework for embracing impact investing more broadly.
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Higher risk, higher principles: A simple investment thesis for Christian impact investors
Christian impact investors can help lead the way by taking on greater risk positions in blended deals. Blended finance enables the faith-based investment manager to take a higher risk approach and be willing to invest in enterprises that are at an earlier stage of development, or which are more innovative and use technology to benefit low-income populations.
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Accelerating Impact-Linked Finance
Impact-Linked Finance (ILF) refers to linking financial rewards for market-based organizations to the achievements of positive social outcomes. It is a highly effective way of aligning positive impact with the economic viability and lies at the intersection between Blended Finance, Impact Investing, and Results-Based Finance.
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Islamic Finance and Impact Investing
This report attempts to provide a brief and indicative overview of both universes: conventional impact investing and Islamic financing. The areas in this report focus on the relevant topics to provide context for recommendations for ways in which the IICPSD is well-suited to act as a leader and are not meant to be exhaustive.
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Impact Investing Resources for Churches
This collection of resources was first developed by a lay leader at a church in Madison, WI to help his congregation understand and consider impact investing with their church endowment. This seventeen page guide offers a starting point to learn more about how to put investment money to work to make more good in the world.
Guidelines
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Sharia’ah Standards
The standards, widely accepted in Islamic Finance are built on the basic pillars of Islamic Faith: the perseverance towards, the preservation of the well-being of people, and solid establishment of markets, trade, finance, and to distance all of which from prohibitions sanctioned in the Qur'an and the Sunnah.
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Zug Guidelines
The Zug Guidelines to Faith-consistent Investing, published in October 2017, outline for the first time the investment priorities for dozens of traditions from eight of the world's major faiths – including Buddhism, Christianity, Daoism, Hinduism, Islam, Judaism, Sikhism, and Shintoism – as well as the ethical rationale that lies behind them.
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Guideline for Ethically Sustainable Investment in the German Protestant Church
How to invest money safely and economically without violating ethical standards in doing so? In an increasingly non-transparent financial system investors feel a great need for guidance. Church investors recognize their responsibility of not only investing their funds economically but based upon Christian values also socially compatible, ecologically, and intergenerationally just. This fourth edition has been updated with new criteria for companies as well as chapters on climate strategies and the Sustainable Development Goals (SDGs) among other things.
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Making Ethically-Sustainable Investments: A Guide for Persons in Financially Responsible Positions in Catholic Institutions in Germany
This guide aims to support the persons in financially-responsible positions in doing so. At the same time, it seeks to motivate a discussion on ethical aspects of financial investment and draw attention to the processes of weighing up which need to be repeatedly carried out.
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Ethical Investment Guidelines of the Austrian Bishops’ Conference and the Religious Orders of Austria
This guideline sees itself as a continuation of the tradition of Catholic religious orders, which since the 1970s have been arguing the case for ethical investment and have contributed substantially to the emergence of this investment format, and as a further development of the previously released guidelines and guidance documents by FinAnKo.
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Socially Responsible Investment Guidelines
The U.S. Conference of Catholic Bishops (USCCB) convened their November General Assembly in Baltimore. During their meeting, one of the action items voted on and approved by the bishops was the formal statement, “Socially Responsible Investment Guidelines.” It provides a three-pronged investment strategy based on the defense and promotion of life: avoid doing harm, actively work for change, and promote the common good.
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How do I measure it? Impact Measurement and Management.
This set of resources provides guidance on how to measure the impact of a faith-based investment strategy.
Impact measurement and management includes identifying and considering the positive and negative effects one’s business actions have on people and the planet and then figuring out ways to mitigate the negative and maximize the positive in alignment with one’s goals. Impact measurement & management is iterative by nature.
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Impact Measurement & Management Primer for Faith Investors
This primer is designed for institutional faith investors who not only want to incorporate impact into their portfolios but also want to learn best practices for how to integrate impact measurement and management (IMM) into their processes. The primer breaks IMM down into easily accessible language and actionable steps offers practical impact examples and IMM tools and includes a downloadable impact report template.
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IRIS+ Demo for Faith-based Investors
The Demo provided a brief introduction to Impact Measurement and Management (IMM) and an opportunity to learn how to use IRIS+, the generally accepted system for measuring, managing, and optimizing impact.
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IRIS+ Use Case: Calvert Impact Capital
This document features how Calvert Impact Capital, a non-profit investment firm, uses IRIS+ to support its impact measurement and management practice. Specific topics addressed include adherence to the Core Characteristics of Impact Investing and use of IRIS+ to inform decision-making across the investment life cycle, including a specific example of how Calvert Impact Capital aligns to IRIS+ Core Metrics Sets across the renewable energy portion of its portfolio.
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More Than Measurement: A Practitioner’s Journey to Impact Management
This document describes the development of an impact management approach, which is defined as the management of assets in order to meet explicit impact goals (alongside financial goals). It is primarily intended for existing or prospective impact investors – although the logic can also be relevant for other practitioners engaged in philanthropy and sustainability, in the interests of coordinating the various approaches to creating societal impact.
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Who else is doing it? The ecosystem.
This document represents a snapshot of the current landscape of actors, resources, and services available to faith-based impact investors. To further expand on our illustrative map, we list organizations that fall under each category listed on the map. We seek to update this list as necessary. Please submit suggestions here.
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How do I look at impact thematically? Thematic Lenses.
These resources help investors target their investing to have an impact in specific areas or themes.
Faith & Climate
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Effective Climate Solutions
This report builds on Project Drawdown’s Solutions Framework by highlighting 9 sectors or climate solutions that are investable. The research aims to help institutional investors navigate the universe of effective, investable solutions to climate change.
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How to Invest in Climate
A growing number of investors understand the risks and challenges climate change poses to their portfolios. Indeed, many have started to incorporate a climate lens in their portfolio, engaging with their investees to promote better environmental practices, and even divesting from companies that represent the highest polluters or emitters. Many investors also see climate change as an opportunity, to both earn returns by investing in companies and technologies that will benefit from a transition to a more sustainable economy and to create positive change with their capital. This research aims to help institutional investors navigate the universe of effective, investable solutions to climate.
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Climate Change
The Policy of The National Investing Bodies of The Church Of England and The Advisory Paper of The Ethical Investment Advisory Group of The Church of England.
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Many Heavens One Earth in Action
In 2012, Christian, Muslim and Hindu communities in sub-Saharan Africa launched action plans on the environment. Many Heavens One Earth in Action, tells the inspiring stories of the many initiatives that sprang from their plans – from tree planting to sustainable agriculture and more.
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Many Heavens Guide
This guidebook to creating a faith long-term plan on the environment was created by ARC ahead of the launch of 32 faith commitments from around the world in 2009. It outlines the seven key areas for action as well as key questions to consider.
Faith & Racial Equity
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Investing in Economically Disadvantaged Communities - Video
The prevalence of social injustice was one of the defining themes of 2020. Racial and economic disparities have deepened over the past several months, and many of us feel called to address them. Learn about investment strategies that advance socioeconomic equity, and hear what institutions are doing to enhance diversity in the investment industry.
FAITH & REAL ASSETS
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Lasting Impact: The Need for Responsible Exits
This 2018 report denotes why and how investors attempt to safeguard the continuity of their investments’ impact beyond exit. The report draws on insights from interviews with over 30 investors and entrepreneurs and outlines practical approaches to achieving responsible exits. Four case studies provide in-depth examples of responsible exits from impact investments.
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A Guide to Transformative Land Use
This toolkit provides information and guidance about how communities of faith can use their land. Topics include assessing their land holdings, operating their own farming and gardening project, leasing it to farmers and farming groups, selling, donating or returning land, and partnering with other organizations to advance shared ecological, social and economic justice values. FaithLands is a growing national movement to connect and inspire faith communities to use their land in new ways that promote ecological and human health, support local food and farming, enact reparative justice, and strengthen communities.
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Land Justice Futures course
Through their intergenerational, spiritual community dedicated to care, contemplation, and courageous action in service of life and liberation, Nuns & Nones has shared their recordings, discussion guides, and other materials connected to the Land Justice Futures course.
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Imagining Land Justice
This series of three interactive publications include case studies, scenarios, and further reading on themes like land reparations, regeneration, common ownership, and the Landback movement.
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Additional Faith-Based Catalogue of Resources
Published Books:
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Faithful Investing: The Power of Decisive Action and Incremental Change
Congregations and religious institutions are asking how to invest in their future and grow their endowed and invested funds, while also focusing on their values. This book will help religious leaders better understand all of the many issues and opportunities involved in making their investment choices reflect their faith-in-action. A unique collaboration of voices from multiple Christian denominations share their experiences, perspectives, and resources, making this book an invaluable guide for church leaders who want to feel more informed and empowered.
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We Aren't Broke: Uncovering Hidden Resources for Mission and Ministry
This book explores how Christian faith-based organizations can use their extensive invested assets for greater social good through impact investing, encouraging churches and other faith-based organizations to seek not just financial return, but social return on their investment. Elsdon describes some of the barriers faith-based organizations may experience engaging in impact investing and provides practical guidance about how to leverage investment assets for greater social impact. The book includes a glossary of financial and investment terms written for a faith-based audience as well as a study guide for group discussion.
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Indigenomics: Taking a Seat at the Economic Table
It is time. It is time to increase the visibility, role, and responsibility of the emerging modern Indigenous economy and the people involved. This is the foundation for economic reconciliation. This is Indigenomics. This book lays out the tenets of the emerging Indigenous economy, built around relationships, multigenerational stewardship of resources, and care for all.
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