Christian investing is a type of ESG (environment, social, governance) investing that aims to select investments that align with the values and beliefs of the Christian religion. Like all investors, Christian investors seek to generate competitive returns. But they also want to avoid putting their money into companies and industries that follow or promote practices that violate their beliefs. In addition, they want to reward companies that do things seen as beneficial to Christianity, Christians and the values they espouse.
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Christian Investing Background
Christian investing is a type of ESG (environmental, social and governance) investing and up to a point its principles closely resemble those of secular ESG investors. Christian investing adds guidelines drawn from religious sources. Halal investing, which is guided by Islamic principles, is another faith-based investment theme.
For Christian investing practitioners, the Bible is the ultimate guide. In fact, Christian investing is also called Biblically Responsible Investing. In a typical brief explanation of the theme, Christian investment firm Inspire Investing summarizes its approach as “Inspiring transformation for God’s glory by empowering Christian investors through biblically responsible investing excellence and innovation.”
Beyond agreeing that the Bible is the ultimate authority, Christian investment philosophies may diverge widely. That is to be expected given that, according to the Center for Global Christianity, there are some 46,400 separate Christian denominations, each basing its unique belief system on the Bible. It’s natural that considerable variety exists in Christian investing principles as well.
Some Christian investing principles are scarcely distinguishable from secular guidance. For example, eChristian Finance says Christian investing requires seeking diversification, investing only in businesses you understand, avoiding speculation, curbing greed, being patient, being wary of leverage, putting money into an emergency fund first and remembering that bull markets are always followed by bear markets. The main difference between this list and one that might have been suggested by Warren Buffett is the frequent use of Biblical quotations to lend the principles authority.
Details of Christian Investing
Christian investing principles can get much more detailed, however. Inspire, for instance, uses a screen for its investments that includes a list of specific positive attributes to be sought after and negative features to avoid. Positive screens include:
- A business model that benefits rather than exploits customers,
- Products and services that create rather than extract value,
- Governance that addresses issues such as executive compensation and ethics,
- Equitable employee management policies,
- Positive social impact on communities including through supply chain practices,
- Attention to environmental impact and
- Sustainable energy use.
Thus far, Inspire’s investment framework resembles those directing secular socially responsible investing practices. When it comes to negative screens, the difference becomes more apparent. Those include prohibitions against investing in businesses engaged in:
- Manufacture, sale or distribution of pornography,
- Manufacture or sale of alcoholic beverages,
- Manufacture or sale of tobacco products,
- Ownership or operation of physical or online gambling facilities,
- Abortion, including manufacturing abortifacient drugs, doing embryonic stem cell research or providing philanthropic support
- Human rights violations such as employing children, slave labor, human trafficking and discrimination,
- LGBT activism and
- Cannabis cultivation or processing.
A more fine-grained look at Christian investing principles comes from the Biblically Responsible Investing Institute (BRII). This organization maintains a database of thousands of public companies and specifically notes their involvement in 13 broad categories including:
- Abortion,
- Alcohol,
- Anti-family activity like violence, sex and homosexuality in media and advertising,
- Bioethics, chiefly relating to embryonic stem cells,
- Contraceptives,
- Gaming,
- Human rights violations,
- Low-income financial services such as payday lenders,
- Marijuana,
- Non-married lifestyles, essentially, LGBT themes,
- Pornography,
- Positive activity, like having a corporate chaplain or Christian employees’ group, and
- Tobacco.
Under these headings are a total of 77 specific activities and businesses of concern. For instance, under low-income financial services, they include auto title lenders, used car dealers that finance purchases with high-interest loans, money transfer operations, check cashing services, pawn shops, payday lenders, tax refund anticipation lenders, rent-to-own companies and any other business engaged in discriminatory or exploitative lending or serving such companies.
BRII’s largest category, with 16 sub-categories, concerns endorsements or accommodations of LGBTQ lifestyles. This includes companies that use gay or lesbian themes in ads, purchase mainstream ads in gay or lesbian magazines, receive awards from LGBT organizations, extend medical coverage to employees’ domestic partners or include gay and lesbian firms in supplier diversity programs.
Some of the LGBTQ concerns BRII tracks will likely apply to a sizable number of major companies, such as the one proscribing investments in firms that include gender identity in non-discrimination policy statements. A 2022 research study of Biblically responsible investing published in the Christian Business Review found that most companies that violate a screen do so in a single category, usually one relating to LGBTQ concerns.
LGBTQ investors with Christian and other religious beliefs, as well as pro choice investors and those with other ethical concerns, will want to discuss their investing criteria before engaging in services with a financial advisor. Faith-based investors have also broadened Christian investing to include climate change, trafficked labor, sustainability, gender equality, racial diversity and gun control, among other social and political priorities when investing.
Bottom Line
Christian investing principles dovetail with many other investing themes around secular environmental, social and governance-type concerns, but only up to a point. Where they differ is that Christian investing principles seek to draw support exclusively from the Bible, rather than worldly sources. What makes Christian investing principles most clearly stand out appears chiefly in the details of the businesses and industries that they encourage investors avoid.
Tips for Investing
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