New research carried out by the International Interfaith Investment Group 3iG, along with ESADE business school in Spain and Vlerick Leuven Gent management School in Belgium in shows that religious institutions find it difficult to invest responsibly whilst maintaining a strategy that fits in with their beliefs.
Despite the fact that faith institutions are widely considered to be the pioneers of They make up the third largest demographic of investors globally, but it appears that the stock market presents difficulties when it comes to aligning the needs of the faith with a responsible investment strategy.
Katinka van Cranenburgh who carried out the research along with Professor Celine Louche from Vlerick and Professor Daniel Arenas of ESADE, says that religious investors are more driven by the impact they can have on company behaviour or society than by the financial returns. They tend to have a preference for investing in projects or companies that do good, rather than simply adopting “best in class approaches”.
However, this approach is made more difficult by the fact that banks often cannot provide the services required to be consistent with faith
The current investment market is not capable of providing all the tools and services that are required by religious investors” says Louche, “The great majority of religious institutions surveyed said that their religious beliefs are reflected in their investment practices, but 51% say they would invest more if there were reliable tools to do so in accordance with their beliefs.”
The research did conclude a possible solution for this; customised religious investment products.
Arenas says that, “most faith institutions require a less complex investment market so this need could be met by customised religious investment products. Customisation and simplification would attract more religious money into the global responsible investment market, to the benefit of both parties.”
Louche adds, “This kind of research has not been done before as faith institutions are generally quite difficult to speak to – especially when the questions are about money. However, having spoken extensively to focus groups from the institutions and conducted a global survey it is clear that this isa big problem for them. The whole idea of the research was to enter into a more open dialogue with these faith institutions and try to understand the problems they face.”
For a full copy of the report or to arrange an interview, please contact
+34 655 1313 25 or at
‐
