Church should boost values-based investing, report says

Key points:

• The United Methodist Church is doing as well or better than other faith communities when it comes to investing in ways that are good for the world, according to a study from FaithInvest.
• The “Good Intentions 2026” report focuses on how well church institutions follow their ideals.
• All those surveyed, including The United Methodist Church, need to do more, according to the report

For some institutions, The United Methodist Church among them, making “values-based” investments is a priority along with getting a good return.

Values-based investments avoid harming the environment (think fossil fuels) or promoting vices like gambling or drinking alcohol, then go a step further by putting money into enterprises that help society, such as building affordable housing.  

The “Good Intentions 2026: What Faiths Say about How They Invest — and How They Can Do More” report was released in April by FaithInvest, a nonprofit that studies public records of the investment policies of institutions of various faiths and judges their investing policies and how well they follow their ideals.

“There’s this belief that you can’t invest and get a good return, and (also) honor your faith, traditions, values and beliefs,” said Dave Zellner, executive chair of FaithInvest and previously the chief investment officer at The United Methodist Church’s Wespath Benefits and Investments for 27 years.

“What (FaithInvest) is trying to demonstrate is that you can do both.”

Investment policies were graded in 10 categories on a 1 to 5 scale, making 50 the highest score possible.

United Methodist entities scored 24.56 out of the possible 50. The Episcopal Church was second of the Protestant denominations at 21.12, followed by the

United Churches of Christ (21.09) and four others.

“We saw clear evidence that church teaching and values are influencing investment policies,” Zellner said. “The opportunity now is to take the next step and ensure those values are reflected consistently throughout the investment process.”

The 25 United Methodist entities surveyed, which included Wespath, did above average compared to other faith traditions FaithInvest measured.

“There is distinct room for improvement across the industry,” said Jake Barnett, managing director of Sustainable Investment Strategies at Wespath. “One of the pieces it called out is that there was a tendency for institutions that were more closely associated with larger denominational bodies to do better because they were having more resources, more guidance.”

Whether to invest in fossil fuel, a fixture in many portfolios but bad for the environment, “divides a bunch of people,” Zellner said.

“But when it comes to the sin stocks — alcohol, tobacco, gambling, adult entertainment — there’s universal acceptance that those things should be excluded.”

FaithInvest is trying to shift emphasis to moral investments that also make money.

“We want to focus on investing for positive impact, and that’s where it’s more challenging,” Zellner said. “(Some are) not yet willing to cross the line and seek investments that accomplish positive impact based upon their values.”

In Methodist history, “a lot of the earliest examples of socially responsible investing actually come from John Wesley and the early Methodist movement,” said Scott Brewer, executive director of the Great Plains Conference, which was evaluated as part of the study. “Most of those basic principles of socially responsible investing really go back to that early Wesleyan movement and the dictum: Earn all you can, save all you can, give all you can.”

For faith-based investors, it is no longer enough to make money, Zellner said.

“It is an expression of identity and mission,” he said. “Investment decisions give practical form to beliefs about stewardship, justice and care for creation and human dignity. Where these beliefs are weakly articulated, investment activity risks becoming disconnected from the values it is intended to serve.”

The investment policies of most of the United Methodist institutions surveyed include references to faith values, ethical considerations or denominational guidance, according to the study. Most also list investments to avoid.

United Methodist investments strongly reflect church teaching, said Catherine Devitt, program manager at FaithInvest and co-author of the study along with Zellner.

“The best policies do not just nod at values in a general way,” Devitt said. “They reflect Methodism’s own language: the Book of Discipline, the Social Principles and the Wesleyan call to social holiness and care for the most vulnerable.”

There are steps the United Methodist entities could take to better live out their values, according to the study. Better education and training are needed, along with written guidance for outside advisers and managers.

“Most policies say little about helping trustees, committee members and staff understand how Wesleyan values turn into real investment choices,” Devitt said. “That leaves a space between what a policy intends and how the money is actually handled.”

United Methodists could improve their “positive investing,” according to the report. Its policies do well in avoiding investments in tobacco, weapons and gambling, but more could be invested in things like affordable housing and clean energy.

“John Wesley’s foundational first principle of the three simple rules to ‘do no harm’ is well established,” Devitt said. “The habit of doing active good is still growing.”

Patterson is a UM News reporter in Nashville, Tennessee. Contact him at 615-742-5470 or newsdesk@umnews.org. To read more United Methodist news, subscribe to the free UM News Digest.