Worldwide Study Shows Religious Investors Can Ally Faith And Finance
Religious investors, in economic terms the third largest group to invest on the world’s stock markets, can post high placement profits and remain faithful to their religious creed. This is the message of the third biennial world report on religious investors, From Stewardship to Power. Religious Organisations and their Investment Potentials, the only report of its kind. The Academy of Business in Society funded this report to expand research in the area, in parallel to its initiatives on Practical Wisdom for Sustainable Management and Valuing non-financial performance.
If a large number of religious investors still believe that a mix of faith and finance causes a dip in return on investment, the 2014 report refutes this claim. The report’s research team argues that the real question is less how to choose between profit and faith, but more how to find the right balance between these two aspects that should be at the heart of all religious investors’ actions.
The report highlights the profile of religious investors who respect this balance and thus can have a major influence on company ethics:
- Their principles of faith can serve as a road map for investment choices;
- By nature, these investors have a long-term view which is key to the notion of responsible investment;
- They can call on the support of what is often a worldwide community;
- They have set up networks that offer the chance to work together on stakeholder actions and therefore increase their impact.
Even though a certain number of religious organisations invest responsibly and use their role as shareholder-activists to promote change this sort of profile is far from the majority. What this active minority displays is investment patterns that other religious organisations would do well to follow. The report shows that ageing of the population and other demographic changes among believers mean that financial investment offers a new tool for religious groups to spread messages such as respect for the planet, integrity and justice.
The report, From Stewardship to Power. Religious Organisations and their Investment Potentials, based on desk research and interviews with 20 representatives of religious organisations, shows that while many religious investors continue to disconnect their beliefs from their investment policies in order to generate profit there is proof that such investors can ethically invest and achieve strong results. Moreover, the report shows that faith investors have powerful features that not only generate a financial return but also contribute to their sacred mission.
This ABIS funded - report has been conducted by ESADE Institute for Social Innovation, Audencia Nantes School of Management (both of which are ABIS members) and 3ig International Interfaith Investment Group.
Please find the electronic version of the report here
Hard-copies are available upon request at 3iG. The academic article will be published in 'Business & Society Review' in July 2014.
This report was authored by three researchers: Katinka C. van Cranenburgh (3iG), Daniel Arenas (ESADE) and Céline Louche (Audencia). Their research lasted eight months and was split into three stages: research of relevant literature, cartography of religious investors, interviews (in person and/or by telephone). The qualitative sample was made up of 20 religious organisations mainly of Catholic or Jewish faith.