People are aligning their values with their finances through faith-based investing, and, according to one expert, that strategy is rivaling ESG.
One Christian financial services company spokesperson explained why investors are flocking to that strategy on “The Big Money Show,” Wednesday.
“With the growth of ESG, we’ve seen similar growth in investors taking account of their values as it relates to their faith,” GuideStone’s Will Lofland pointed out. “Within the last three years, it’s where we’ve seen the most critical growth.”
The GuideStone Head of Investments Distribution explained that there’s been a counter to the growth of ESG [Environmental, Social, and Governance] — and, though his firm has been around since the 1970s, he’s noticed a recent spike in faith-based investments.
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“Honestly, during the COVID period of time, people, I think, started living their life more intentionally and discovered that things like this exist that are more in line with what they’re thinking about, than something that was maybe the product du jour like ESG.”
He remarked how, through GuideStone, faith-based investing is being brought to people who want to invest through their Christian values.
As far as countering ESG policies, Lofland laid out how the capital management company strives to encourage other companies to focus on their core business areas.
“There are Christian principles that we want to adhere to,” he said. “But we want to try to bring those to businesses that are secular entities and help them understand those to be business principles, whether it’s how they treat their employees, the products and goods that they bring to the marketplace, and honestly, that they are enacting policies that don’t run as an affront to their consumers or to the employees.”
Lofland also highlighted observations about investor ages when it came to faith-based strategy.
“Statistically speaking, the people that were the early adopters of this, the people that are beginning to adopt it more now, tend to be a younger generation,” he remarked. “But we’re now seeing more emergence within the baby boomers, the people that do historically hold more wealth in embracing concepts like this.”
He explained that the strategies “depend on areas of spectrum,” noting that the older demographics trend to restricting companies versus that of the younger generations who have been more accepting of companies whose products benefit society.
The GuideStone head also weighed in on concerns that many companies don’t pursue policies that resonate with consumers and investors.
“That really is honestly what we’re trying to advance to companies is help them understand that there might be a voice on the other side of the issue,” Lofland said. “It’s a very material voice, and it’s a large voice and get them to come back to just understanding that.”
He reiterated how businesses should approach policies and focus on principles.
“If you want to be a retailer, be the best retailer that you can possibly be, bring goods and services to your customers at a reasonable price, and the types of goods they want to purchase.” Lofland continued, suggesting that companies should “not enact social change” but focus on its purpose.
“That’s what we want companies to get back to,” he concluded.
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