1) Tell us about Church Investment Group’s (CIG) mission.
With a focus on both strong returns and impact, Church Investment Group (CIG) enables Episcopal investors to seek financial performance while acting as stewards and advocates for our most precious resources: the environment and our communities.
CIG, a 501(c)(3) nonprofit, partners with Episcopal endowments with the objective to achieve an integrated set of goals: profitable and growing endowment returns and capital preservation through the use of an Outsourced Chief Investment Officer, adherence to ethical investment considerations, and advocacy to promote the highest standards in corporate behavior. CIG’s stewardship activities include being a Principles for Responsible Investment (PRI) signatory, a member of the Interfaith Center on Corporate Responsibility (ICCR) and the Intentional Endowments Network (IEN).
2) CIG has a strong focus on sustainable investing. How have you approached aligning your investing with your values?
Our investment approach is to use active management to know what we own so that we can understand the characteristics of the companies in which we invest and engage with them as active shareholders. CIG uses a three-pronged approach: proactive securities selection, advocacy and exclusion. We implement this framework through environmental, social and governance (ESG) investment guidelines, proxy voting and corporate engagement, and exclusion of investments due to ethical considerations or excessive sustainability-related financial risks.
CIG has found that integrating ESG analysis in the selection process for portfolio holdings provides additional insight into a company’s long-term competitive edge and forward planning and helps highlight risks and opportunities that might not be identified by solely relying on traditional financial analyses.
3) How would you advise other endowments and foundations as they strive to incorporate ESG into their efforts? What do you see as your mission?
CIG’s investment approach is framed by the Episcopal Church’s Pillars of Love, Care of Creation and Social Justice.
Once you have decided to step onto the sustainable pathway, IEN has a great free seven- step roadmap to help you decide how to include ESG in your investments: (1) Learn, (2) Build Consensus, (3) Establish Investment Policy, (4-6) Assess, Align and Monitor, and (7) Communicate.
In the investment policy and implementation phase, there are two primary approaches to integrating ESG into portfolios: comprehensive ESG integration and thematic investing. Comprehensive ESG integration is defined by the type of equities that you are looking to own long term. CIG’s Episcopal endowments are seeking to generate performance by investing in high-quality businesses with strong future growth and competitive positioning. We examine the companies’ characteristics in terms of how they approach resource usage, worker and community relations and governance to determine which companies to invest in.
Thematic investing includes choosing to invest in specific sectors that provide solutions to the challenges posed by climate transition or other societal issues, such as renewable energy solutions and regenerative agriculture. Endowments and foundations may also focus on thematic investing that aligns with their defined missions. An example would be a healthcare-focused foundation that chooses to invest in both public and private equities that emphasize innovative health solutions or delivery methods.
4) How do you measure the impact of your investments?
CIG’s goal is not to just decarbonize our portfolios, but to have broad real-world impact. We seek to assess companies’ positive contributions while working to avoid investing in environmentally and socially harmful activities. We started by determining our carbon footprint through Task Force on Climate-Related Financial Disclosures (TCFD) and Transition Pathway Initiative analyses. On the positive side of the ledger, CIG compares the carbon, waste and water efficiency of our company holdings in comparison to the relevant benchmark. Within each assessment category, like carbon efficiency, we review which companies have the strongest profiles and which have improvements to make. We factor in issues like board independence and executive pay. We seek out companies that have no or limited revenues from environmentally and socially negative activities.
5) What advice would you give your younger self?
As an Episcopalian, my faith has been the cornerstone of my life. Advice that I would give my younger self would be to value the mystical, the ineffable and the transcendent – and embrace it. Follow your spiritual curiosity and allow it to flourish within a world that emphasizes a materialist, secular mindset. I would also like to share career advice that I was given as a young woman and took to heart: Take calculated career risks, and don’t feel that you have to have fully mastered a task before taking it on. I left an investment banking role at Lazard Freres to be one of the founding partners of an investment advisory firm that grew to manage over $1 billion in assets. As I saw the growing climate and cultural challenges in the world, I joined CIG with the goal of helping faith-based, institutional investors invest their endowments in ways that can be both profitable and impactful.
