Love Your Neighbor with Your Investments

Above photo by Sean Pollock

Over the past few years, a growing number of investors have started leaning into their faith to guide their investment choices. Morningstar found that more faith-based products launched between 2019 and 2022 than during any other stretch since 2010 and predicts faith-based investing will grow even more popular with the surge of customized investing.

The driver behind this growth in faith-based investing is, in my view, a response to the pain and suffering seen in the world and the desire of many investors to combat it by investing in good. Faith-driven values have long been a reliable framework to accomplish this goal.

Faith-driven investing communicates the ethical desires of shareholders to companies, seeking to shape corporate behavior and encouraging decisions that contribute to the human flourishing of stakeholders. At Eventide, our faith-driven investment model is anchored in biblical principles and is the foundation of everything we do.

In 2008, Eventide was founded with the desire to honor God and create compelling value for the global common good. We believe in investing that makes the world rejoice! The founding members and I saw a unique opportunity to connect our faith to our investments. We set out to invest in companies that we could be proud of and that align with our Christian values: companies that didn’t just create strong returns but also served their stakeholders well.

To effectively do this, it is important to have an understanding of both the love we are trying to achieve and the neighbor we are seeking to love. In what is often considered one of the greatest commandments in the Bible, Galatians 5:14 says to love our neighbors as ourselves. I take this to mean that we should consider the well-being of others in the same way we would want to be considered. Not only is this kind of love possible through investing, but it is a powerful agent of change.          

Businesses have two sets of neighbors: internal and external. At Eventide, we define these with the acronym “CES2”. Internally, a business’s neighbors are its Customers, Employees, and Supply chain. Externally, it’s the business’s Communities, Environment, and Society. These neighbors, or stakeholders, are at the forefront of our minds while investing, not only as a way to leave the world better than we found it but also as a long-term investment strategy of investing in “good” companies.

A study by McKinsey found that companies with an emphasis on their people and the company’s performance displayed more economic resiliency than companies solely focused on performance. Amid the COVID-19 pandemic, companies that dedicated resources to enhancing their employees’ skills and optimizing their work environment saw their revenue grow at a rate twice as fast as those that did not make such investments.

To effectively love our neighbors through the vehicle of investing, Eventide uses the framework of avoid, embrace, and engage. This includes avoiding companies that are siphoning value instead of creating it for others, embracing companies that are contributing to the human flourishing of their stakeholders, and, even further, engaging with companies to help them better serve the world’s needs. We believe this framework helps us allocate our investments towards companies that are creating meaningful value for their stakeholders.

Investing with values has reminded me of how God invites us into His redemptive work in the world. In Revelation 21:5, God says that He will make all things new. We all can join Him in this good work regardless of personal background, occupation, or circumstance. When this faith-based perspective comes together with a performance and stakeholder-oriented approach to investing – the possibilities for doing good and bringing hope are immense.

One powerful example is Reverend Leon Sullivan’s “Sullivan Principles” in response to apartheid in South Africa. In 1977, Baptist minister and GM board member Leon Sullivan put forth a set of six principles designed to guide U.S. investments and business activities in South Africa. These principles encompassed the eradication of workplace discrimination, the promotion of pay equality, support for education, and the sponsorship of social programs and community investment.

 As a result, 160 of the 244 American companies with investments in South Africa adopted the principles, serving to shape the American corporate response to apartheid and joining in the domino effect towards the eventual end of the oppressive system.

Today, Eventide is looking to drive this kind of change towards the oppression of the Uyghur people who are in forced labor camps in the Xinjiang region of China. Their forced labor is contributing to the solar panel supply chain. We are seeking to eradicate this by divesting from companies with any connection to forced labor and, instead, embracing and engaging with those that are forced-labor-free. The goal is that one day, the solar supply chain will be completely free of forced labor. As the Sullivan Principles contributed to the end of apartheid, our hope and goal is that by refusing to support any company that uses the forced labor of the Uyghur people — and bringing broad awareness to the issue — their oppression will eventually end.

As more money is allocated towards value-creating companies and less towards value-destructing companies, a message is sent to the marketplace about what investors will and will not tolerate.

Faith-driven investing is a powerful way for investors to pursue performance and drive positive change in the world. The opportunities are vast, whether supporting companies that treat their employees fairly, contributing to their communities, or even taking steps to eliminate injustice in their supply chains. Investors can engage with a values-aligned financial advisor to ensure their investments are allocated towards companies that love their stakeholders well. Together, we can send a resounding message about the types of business practices we will and will not stand for, shaping corporate behavior and contributing to human flourishing around the world.

Article by Robin John who serves as a Founding Member and Chief Executive Officer of Eventide.

 Disclosure

This article is provided for informational purposes only and expresses the views of Eventide Asset Management, LLC (“Eventide”), an investment adviser. This does not constitute investment advice nor is it a recommendation or offer to purchase or sell or a solicitation to deal in any security or financial product. Eventide does not provide tax, accounting, or legal advice. Eventide’s values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide uses the trademark (“Investing that makes the world rejoice®”) in a figurative manner to help explain its focus on serving investors by helping them improve the world.  Third-party sources have not been independently verified, nor is Eventide affiliated with any third-parties referenced.