It is generally accepted that the reason people invest in the markets is to make a profit on their money greater than they can by putting it a bank and accepting the guarantees they offer. Pretty straight forward and not a real revelation. But more and more investors are comparing their investments with their values. Thus, placing a greater value on what their money is doing in and to the world than what kind of return they can get. And, those of you reading this would most likely say, well…yeah…what’s the point.
The point is this; by investing our values, do we give up profit? No.
A recent study by Shane Enete, CFA at the Inspire-Biola Research Institute for Biblically Responsible Investing (BRI) indicates that ESG – or in our case BRI investing – produces a distinct outperformance versus an unscreened portfolio; For the period between January 2012 to January 2017, for the Inspire Impact Small/Mid Cap Equal Weight Index the Inspire Impact Score security selection showed a 4.7% potential outperformance (Generating Alpha Potential with Inspire Impact Score | Special Report: Fall, 2017) So, with that in mind, is there a case to be made for an inherent blessing from God for using our assets for good versus evil? Or, is there something supporting the potential outperformance of BRI beyond the abilities of the managers of those companies that have committed to establishing a culture of excellence and blessing to their communities?
Yes, there is.
In theology, there are three concepts that describe how God communicates with man. 1) General Revelation – this is the primary way God has communicated His existence to man since the beginning. 2) Special Revelation – This is generally recognized as how God has communicated to man through His Son Jesus Christ and His Word through the scriptures. 3) Direct Revelation – Those moments where God Himself came down and spoke directly to men, such as in the case of Moses or Abraham.
Wilhelm Schmidt, SVD (1868 – 1954) was a priest, linguist, ethnologist, and historian of religions. He wrote the book “The Origin and Growth of Religion, facts and theories” over a fifty-year period in the early 20th century. His research covered all the earliest records of the first contact with indigenous people groups on every continent. He had access to the Vatican’s archives amongst other sources. His conclusions of the relationships of these peoples on every continent showed a statistically remarkable similarity across the globe with how these first peoples interacted with God the Father. He found that across the globe people believed, “The Supreme Being, thus exercising oversight on the doings of men, is likewise able to reward morally good action and punish that which is morally bad.” (Chapter XVI – The Primitive High God, page 275, The Supreme Being as Author of Moral Rewards and Punishments)
So, we see that since the beginning it has been understood – from before the revelation of Jesus Christ – that God is able to reward morally good behavior and punish morally bad behavior! And, this was recognized by all the earliest people since God put them on their lands.
But, did the birth, death, and resurrection of Jesus Christ abrogate the tenets of General Revelation. No!
Romans 1:20 still applies today; “20 For since the creation of the world God’s invisible qualities—his eternal power and divine nature—have been clearly seen, being understood from what has been made, so that people are without excuse.” Which segues nicely with Acts 17: 26 & 27; “26 From one man he made all the nations, that they should inhabit the whole earth; and he marked out their appointed times in history and the boundaries of their lands. 27 God did this so that they would seek him and perhaps reach out for him and find him, though he is not far from any one of us.” God is still in the business of reaching out to Man through all three types of Revelation; General, Special, and Direct. And, He still is able to REWARD good moral behavior and PUNISH bad moral behavior.
So, we see that there is much more to making a profit from investing our money with companies that strive to do good in our world. Throughout scripture, we see that God rewards those that sought to be a blessing to their people, community, and world. And, He has opposed those that seek to further their self-interest with unethical or evil intentions.
Thus, “what is clear is that companies that are a blessing to their customers, communities, workplace and the world have the potential to outperform their peers and that investors who are seeking to create profit and impact do not necessarily need to resign themselves to substandard returns –– indeed, it is possible that they could even experience above-average returns by including Inspire Impact Score screening in their investment strategy.” (Generating Alpha Potential with Inspire Impact Score | Special Report: Fall 2017)
History has shown that God is Faithful with His promises towards men. That’s quite an incentive to strive for good behavior and a huge argument for a Fiduciary Responsibility towards Biblically Responsible Investing.