Faith-Based Investing | April 6, 2023

Church of England adds to the growing pool of faith-based assets invested for impact

Dennis Price
ImpactAlpha Editor

Dennis Price

ImpactAlpha, Apr. 6 – This week’s convergence of Ramadan, Passover and Easter brings to mind another overlap among religions: a rising appetite for impact investing.

A portion of the £100 million ($125 million) the Church of England set aside in January to address “past wrongs” for its involvement in the transatlantic slave trade will flow to impact investment funds targeting communities affected by slavery’s legacy. The Church Commissioners, the investment arm of the church, manages a £10.1 billion investment fund and the £3 billion Church Pension Fund.

“We increasingly believe, as a faith-based investor, that you should look at impact and look to effect change with any investments,” Tom Joy, the Church Commissioners’ chief investment officer, told the Financial Times. “What we’re really focusing on with that is how we can be catalytic, providing the sort of vital seed capital to impact-focused managers . . . and attract further investment.”

Impact creation

The new commitment adds to the growing pool of Islamic, Dharmic, Christian and Jewish assets flowing into impact investing.

Roughly 3%, or $150 billion, of about $5 trillion in faith-aligned assets are now committed to creating impact, socially responsible investing or ESG, according to the Oxford Faith-Aligned Impact Finance Project.

More than 40 Catholic-based institutions have signed the Catholic Impact Investing Pledge to integrate impact investments into their portfolios, John O’Shaughnessy, founder of the Catholic Impact Investing Collaborative, tells ImpactAlpha.

Growing pains

At least one challenge to the expansion of faith-based impact investing is the fragmentation of faith-based asset pools. Many organizations pursuing “faith-consistent” investing have less than $100 million in assets under management, according to U.K.-based FaithInvest.

Networks like Catholic Impact Investing Collaborative and JLens Investors Network help smaller organizations coordinate activity and leverage resources. Pricier outsourced chief investment officer services like those from Wespath Institutional Investments and eCIO provide institutional-quality and tailored support for smaller religious organizations.