by Henry Netherland, founder of Faithful Financial LLC.
As battle lines are drawn in the Socially Responsible Investing arena, the penultimate decision is where to draw the lines. While most people, in general, would like to ensure that Good prevails, it often becomes a question of what is Good and what is Evil. Investors, whose primary goal is usually to grow investments, are increasingly following their morals and ethics to help choose proper investments, often willing to sacrifice returns to advance their belief systems.
So where are lines being drawn and why?
Socially Responsible Investing (SRI) has almost exclusively chosen the Environmental, Social & Governance (ESG) model. Environmental factors include carbon emissions, pollution, deforestation and similar initiatives. Social aspects include employee gender diversity, sexual harassment policies, data security, fair labor practices and human rights. Governances involves political contributions, executive pay, internal corruption, lobbying and lawsuits. To many investors, investing in companies that support such ideals not only supports their beliefs but also contributes to their fight for Good over Evil.
ESG is our world’s response to aligning our investments to our moral center. The Good versus Evil fight defined by the current political environment and social issues. ESG is where mankind attempts to shine a light into the darkness.
As Christian investors, do we buy into this methodology? Does ESG satisfy our desire to “Seek first the Kingdom of God and his righteousness?” Do we base our Faith and investments on worldly things? We know that we are required, as stewards of God’s provision, to manage our affairs and money in ways that honor God. Certainly, there are aspects of ESG investing that are appealing, but are the lines ESG draw the right lines?
ESG fails as an investment methodology because it is built on shifting sand.
Christians have a better source of truth than that defined by man. We have the Bible and its rich teachings on Good versus Evil, of light that darkness cannot overcome. Why don’t we look there for inspiration and investing methodologies?
Luckily, there is a road less travelled, a path that allows us to align our finances to our faith.
Biblically Responsible Investing (BRI)
While not as popular as its ESG counterpart, BRI focuses on biblical principles and is growing at a phenomenal rate. Pioneers in BRI have developed methods to avoid investments that support activities contrary to scripture like abortion and pornography. Faith-based investing can include negative screens (avoiding bad actors), positive screens (seeking organizations doing good) or a combination of both.
The lines BRI draw are consistent with doctrine and help Christians use their investments to support biblical truth, which is always Good.
As the world drifts into darkness, let’s use what God has entrusted to us to further his kingdom while also seeking to grow that provision. It’s one way we can effectively reflect God’s Light and impact the world in which we live. It’s how we can join the battle!
“Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is–his good, and pleasing and perfect will.” (Romans 12:2)