ESG and Impact Investing Introduction from the Financial Resources Ministry

• Posted on October 25, 2022
• by Sarah Marino
• in Environment, Giving, Latest News, Ministries/Task Force News, Outreach, Racial Justice
• Comments Off on ESG and Impact Investing Introduction from the Financial Resources Ministry

Hello, FCCW Community! We are blessed to be back together with you again as we begin the new program year. The Financial Resources Ministry is looking to make sure you receive updates and emails from us that do more than just ask for money (😊) so here it goes:

The Financial Resources Ministry has a few key responsibilities beyond leading the annual stewardship drive (COMING SOON!) – a close second is providing oversight over the material assets of the church including the church’s endowment. Examining the alignment between the ideals of the church and the investments we make with the church’s financial assets has always been a goal, but there are new ways for our church to specify where we invest and whom we invest in via ESG or impact investments (definitions below). The prior blessings bestowed on our church act as a great ballast for our community and there are so many reasons to make sure we review financial tools that align with our values while at the same time grow the endowment.

Definitions:

Impact investing – 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.

ESG Investing – the consideration of Environmental, Social and Governance factors alongside financial factors in the investment decision-making process. ESG investing assumes that there are certain environmental, social and corporate governance factors that impact a company’s overall performance. By considering ESG factors, investors get a more holistic view of the companies they back, which can help mitigate risk and identify opportunities. For instance,

• Environment. What kind of impact does a company have on the environment? This can include a company’s carbon footprint, toxic chemicals involved in its manufacturing processes and sustainability efforts that make up its supply chain.
• Social. How does the company improve its social impact, both within the company and in the broader community? Social factors include everything from LGBTQ+ equality, racial diversity in both the executive suite and staff overall, and inclusion programs and hiring practices. It even looks at how a company advocates for social good in the wider world, beyond its limited sphere of business.
• Governance. How does the company’s board and management drive positive change? Governance includes everything from issues surrounding executive pay to diversity in leadership as well as how well that leadership responds to and interacts with shareholders.

Many ESG-related topics are often in the news these days and discussed regularly within our sanctuary, therefore the Financial Resources Ministry thought it was important that we think about how our endowment is invested. Our unwavering commitment to social justice, how we address sustainability locally and globally, and the offering of steady prayers for world leaders to govern soundly are all real examples of our church’s core values and we can now lean in or “tilt” towards ESG investing opportunities fairly easily. We of course, are still committed to the financial growth of the endowment and are only proposing here ESG and impact investing opportunities that have expected market rate returns.

Initial feedback on the church utilizing these financial tools as part of our investment portfolio is very positive but we want to walk before we run and listen first before formalizing “an ask.” We would like to offer up some educational material here. We also plan to follow up soon with an in-person opportunity to discuss ESG and impact investing with you in more depth. We hope you can join us for an in-person or virtual event this fall and help us shape how, when, and how much we pursue ESG-principled investments with the church’s current endowment. Please join us whether you are a novice or veteran in the topic.

With blessings and appreciation,

Ben Keeler and Jennifer Murtie