Mission and Money: Ensuring Morally Responsible Investments

Twelve Wicker Baskets

Responsible for faith-based and secular non-profit markets at Innovest, Sarah brings to bear her rich experience of non-profit development, marketing, and business development along with her faith and sense of stewardship in managing clients’ investment portfolios. In this episode, Sarah explores how building a morally conscious investment portfolio is more than avoiding “sin stocks,” but requires a deeper due diligence to ensure funds are not applied to causes antithetical to the Gospel and the Church’s teaching on faith and morals. Maintaining value alignment is important so that support is not given to causes that harm authentic Christian discipleship or true communion.

“Our clients are always at the center of every decision we make,” Sarah explains, emphasizing that in managing clients’ investments, establishing client mission over shareholder interest is essential to maintain value alignment. Making investment decisions based on shareholder returns can be “a big problem and conflict of interest” in a fiduciary relationship. As a secular firm with Catholic values, Innovest manages $45 billion for retirement plans, for non-profit foundations, endowments, operating reserves, and retirement plans, and for high net-worth individuals. Sarah said that, in keeping with the vision of Innovest’s founders, “we believe that we are stewards of everyone we come in contact with, whether that’s clients, people in the community, even our employees…we very much have a stewardship culture.” In addition to stewarding clients’ investments, Innovest seeks to be stewards of its own resources by providing educational opportunities for the underserved, monthly volunteer opportunities for employees, and by donating 1% of revenue back to their clients to help their missions.

In Catholic investing, the USCCB’s investment guidelines serve as a starting point for morally responsible investing. Dioceses have an Investment Policy Statement (IPS) which includes language on how the IPS adheres to the USCCB guidelines and in what asset parameters investments can be made. Sarah stresses the importance of having a “Catholic ecosystem of resources” to help Catholic entities manage and invest funds in a manner truly harmonious with the Church’s mission. Vendors, banks, investment companies, development professionals, asset managers, etc. must all embrace the mission of the gospel. This ecosystem helps ensure morally responsible investments. For example, companies earn ESG (environmental, social and governance) scores depending on how well they fulfill their responsibility to the community in these sectors. A high ESG score gains more investors. But a secular perspective on ESG causes does not prescind from Catholic anthropology, which in turn means that companies’ ESG initiatives often do not advance authentic human flourishing, thereby compromising value alignment. A Catholic ecosystem will help mitigate poor investment decisions and help guide Catholic entities to make the best return on investment, advance the gospel, and bring authentic human freedom, joy, peace and flourishing to the world.
Guest: Sarah Newman
Title: Vice President, Innovest

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