Translating Values into Policy

By Frank Sherman

As members of Seventh Generation Interfaith (SGI), we profess to “view the management of [our] investments as a powerful catalyst for social change,” but how well do we do this? Many SGI members are reviewing their overall approach to faith or mission-based investing, beyond corporate engagements.

Robert Wotypka, OFM-Cap, reported on his efforts to answer this question for his Capuchin Province during our spring member meeting. He has asked his investment committee and their financial consultant on how they are integrating ESG criteria across their entire portfolio.

The Sisters of St. Francis in Dubuque, IA recently had a workshop facilitated by Chris Cox of SGI to reflect on this question. They feel they are doing an adequate job of taking active ownership by voting their proxies, participating in corporate engagements and filing resolutions; however,they want to better incorporate their values into their investment policy and practices. Anita Green, Director, Sustainable Investment Strategies for Wespath Investment Management shared how the United Methodist Church approaches this topic. Anita described Wespath’s three strategies of Avoid (ethical exclusions), Engage(proxy voting, corporate engagements, political advocacy) and Invest (external manager benchmarking, Positive Social Purpose Lending Program, and low-carbon solutions). They take a holistic approach across all asset classes encompassing their entire portfolio.

A growing strategy of socially responsible investing is community or impact investing. Pope Francis has encouraged Catholic institutions to engage in impact investing with the Vatican hosting their third impact investing conference on this topic last summer. Wharton Business School recently interviewed John O’Shaughnessy, CEO and CFO of the Franciscan Sisters of Mercy, a Roman Catholic group based in St. Louis, MO, on this topic.  “We have carved out 15% of our overall portfolio – about $10 million – and directed that towards impact investing,”said O’Shaughnessy. He described 17 impact investments that the Sisters have made from clean energy to low-income populations worldwide including sustainable timber operations, conservation forestry and detoxing of the environment. “This can be systemic change,” he said of the potential of impact investing. “This is capitalism at its best.”

We added a new section on our “Resources” page, entitled “Incorporating ESG/ SRI Strategies” with some tools that you may find helpful. We will host a webinar next spring on SRI strategies and how our members can better manage their financial assets more holistically. I hope you will be able to join us.