Doing well while doing good with investments

February 2, 2023 by Nancy Crowe

Editor’s note: You can find a recording of the webinar, powerpoints, and other resources on our website here.

“You have a ministry with your investments,” Greg Rousos, president and CEO of the New Covenant Trust Company, told participants in a recent webinar.

Making that ministry faithful and fruitful means investing in ways that reflect our faith and pushing corporations to be better global citizens. Doing so was the focus of “Socially Responsible Investing in the PC(USA),” presented Jan. 31 by the Presbyterian Foundation and its New Covenant Trust Company (NCTC) subsidiary, along with representatives from the Committee on Mission Responsibility Through Investment of the PC(USA).

Socially responsible investment is not a new idea for Presbyterians — the 1971 goals of the General Assembly’s Committee on Mission Responsibility Through Investment (MRTI) are still being followed, said Rev. Kerri N. Allen, chair of MRTI.

Yet any question about stewardship and social responsibility is new for the one asking.

Allen, Rousos and other speakers offered information and guidance on what faith-based investment can mean in 2023.

Engaging corporations

Since 1971, MRTI has worked toward investing that promotes peace; racial, social and economic justice; environmental responsibility; and gender justice. It does so by engaging corporations in which the church holds stock.

If a company does not change harmful practices, this can mean divestment from that company, Allen said, but the goal is always to be guided by the Holy Spirit.

Recognizing the urgency of the climate crisis, the MRTI also calls for a response at every religious, social, political and economic level.

Rob Fohr, director of faith-based investing and corporate engagement for the PC(USA), agreed the goal is to encourage positive change. While the tactics for doing this include negative screening, shareholder advocacy — taking into account a corporation’s practices as well as the investor’s values and financial objectives — can’t be overlooked.

MRTI has engaged with a number of corporations on environmental and climate change issues, Fohr said, with American International Group (AIG), Dollar General and American Airlines counted among successful engagements. Those engagements include:

  • AIG last year committed to achieve net zero gas emissions across its investment portfolio by 2050 in response to a shareholder resolution filed by the PC(USA).
  • Dollar General adopted new policies on chemical restrictions.
  • American Airlines agreed to evaluate and report on how its lobbying activities align with the Paris Climate Agreement.

There were seven companies added to the MRTI’s focused engagement  list by the 2022 General Assembly. Chevron, ExxonMobil, Marathon Petroleum, Phillips 66 and Valero Energy were placed on the General Assembly Divestment/Proscription List “until their actions comply with the General Assembly’s established criteria.”

The divestment recommendations went to the boards of the Board of Pensions, the Presbyterian Foundation and the New Covenant Trust Company for action, and all three divested of those companies.

Using every tool available

Rev. Jihyun Oh, a member of the New Covenant Trust Company board, said the partnership between the MRTI and NCTC works to ensure the life, death and resurrection of Jesus Christ are reflected in investments and are truly “a way of living out our faithful stewardship.”

Rousos, NCTC’s president and CEO, said the trust corporation strives to empower churches, church institutions and church members to be good stewards of what God has entrusted to them — no matter the size of their account.

What’s more, he said, NCTC is a limited purpose national bank and has professionals whose qualifications rival any financial institution out there.

The NCTC uses “every tool available to us” to further the goal of socially responsible investing, said James Carey, director of investment and portfolio management services. ESG (environmental, social and governance) issues can be incorporated into existing investments using integration, screening and thematic approaches, he said:

  • Integration explicitly and systematically includes ESG issues in investment analysis and decisions.
  • Screening applies filters to lists of potential investments to rule companies in or out based on investor preference.
  • The thematic approach seeks to combine attractive risk return profiles with an intention to contribute to a specific environmental or social outcome; this includes impact investing.

Responsible investing can be good investing, Carey emphasized, and should stack up against any portfolio. “It should not be any sort of tradeoff.”

As with any investment, there will be variance over time. 2022 was “a miserable year” for the markets, and the NCTC recommends investors work closely with their financial professionals to determine best strategies in 2023. The NCTC and Presbyterian Foundation are ready to help as well.

“We do believe you can do well while doing good. And you should,” he said.

Nancy Crowe is a writer, editor, and animal wellness practitioner based in Fort Wayne, Indiana. She is a graduate of Louisville Presbyterian Theological Seminary. Send comments on this article to Robyn Davis Sekula, Vice President of Communications and Marketing at the Presbyterian Foundation, at robyn.sekula@presbyterianfoundation.org.