Church investments under the microscope
It was no coincidence that responsible investment was the topic of one of the special interest workshops that followed the ordination service at Methodist Conference 2008.
The executive director of the Responsible Investment Association of Australasia (RIAA) Louise O’Halloran was invited to lead the workshop by the Church’s Investment Advisory Board executive secretary Greg Wright. The Investment Advisory Board is reviewing the Church’s investment policies in light of the latest criteria for responsible investment.
Louise explained that the basis for ethical or values-based investing is ‘ESG’. This means in addition to normal financial concerns, it considers the company’s performance in regard to the environment, social issues, and governance.
Some of the ways that large investors such as superannuation funds are using to decide how to invest responsibly include negative and positive screening and sustainability analysis.
Negative screening avoids investing in industries that cause harm such as tobacco, armaments, alcohol or gambling. Positive screening seeks out companies that have a positive impact on society, such as renewable energy, healthcare, or other companies that have above average environmental or ethical practices. Sustainability analysis is the quantitative and qualitative study of all companies on the stock market to determine their ESG performance.
Greg Wright says the Methodist Church is the first New Zealand religious organisation to be admitted into membership of RIAA.
In September he and then Methodist president Rev Brian Turner went to a RIAA conference in Melbourne to learn about ESG investing and the latest United Nation guidelines on responsible investments.
"The Methodist Church of NZ’s socially responsible investment guidelines were last reviewed in the 1980s. Today investment guidelines give stronger direction to the type of investment that is considered ethical," Greg says.
"We are interested in the ESG guidelines because they overlay neatly with the Church’s beliefs and teachings."
In the process of reviewing the Church’s investment guidelines, the Advisory Board will consult with the newly formed Public Questions Network, which has the responsibility to research and communicate social justice issues to the Church and government.
Greg says like other investors, the Church faces considerable uncertainty in the current economic climate but it is confident it will maintain stability and security.