Why Impact Investing is a Natural Fit for Faith-Based Investors

This article was originally published here by Financial Advisor.

In 1758, at their yearly meeting in London, all Quakers were called to “to avoid being in any way concerned, in reaping the unrighteous Profits” from what they called the “iniquitous practice” of slavery. Members of the same faith would later be among the loudest to call for divestment from the apartheid regime in South Africa.

In 1891, Pope Leo XIII issued the Rerum Novarum encyclical that called all members of society to contribute to its betterment and outlined the relationship between labor and capital in a Christian society. Today it lends its name to a fund supporting Catholic businesses and philanthropy.

And as of 2016, 126 faith-based organizations of “diverse religions and creeds,” such as Islam, Buddhism, Judaism and Christianity, and with a collective $24 billion in assets, had committed to divesting from fossil fuels, with many feeling a moral imperative to provide clean energy to the world’s poor.

There are similar examples from all faiths—from Judaism to Sikhism to Buddhism—around the world. Faith-based investors have long recognized the importance of ensuring their money is not out of step with their convictions.

So, while the increased attention that values-based investing has received may be new, many faith-based investors have been doing this type of investing for generations.

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