Exclusions Are Not Enough: Catholic Investors Must Advocate for Good
Summit Investment Management goes beyond the simple avoidance of morally objectionable investments by promoting positive change with advocacy through impact investing. We currently have efforts underway to prevent human trafficking, forced child labor and gender discrimination, among many other initiatives.
We promote Catholic values while simultaneously providing for the investment return needs of morally conscious investors.
Unfortunately, while the concept of excluding the bad actors from your portfolio may be both admirable and self-actualizing, it has little or no impact on the behavior of the companies being excluded. Some of these companies are so large, that even withholding your life savings from investment in them would never be noticed.
This is why some authorities, such as the United States Conference of Catholic Bishops, explicitly cite active engagement of corporate management as a second, but equally important piece of their moral investment strategy in addition to exclusion. They recognize that only by reaching out and connecting with top policy makers can we begin to move a large corporation in a more positive direction. That is what impact investing is designed to accomplish.
Some of our biggest impact investing successes have been in the following areas:
Summit commits a portion of its management fees to engage in impact investment advocacy.
As a Catholic asset manager, we partner with consulting companies that specialize in not only assessing corporate activity, but also engaging in direct advocacy activities in an attempt to create a win-win for both the company and Catholic impact investors. The advocacy groups create targeted campaigns designed to get in front of top executives with clear messages and effective solutions that can provide long-term benefits to both the corporations and society.
The companies involved include a veritable “Who’s Who” of some of the largest corporations in the United States.
The way we fund these advocacy initiatives is by devoting a portion of the fees we receive for our management services. There’s no added fee for our client. Like many Registered Investment Advisors, our fees are based on the total amount of assets we manage, but we donate roughly one third off the top to Catholic advocacy. So while other investment advisors might charge 1% and keep all of it, we’d charge the same 1% but only keep 0.70%after giving 0.30% for advocacy efforts.
One interesting thing to bear in mind about how our advocacy is funded is that the more money we manage, the more advocacy gets funded. This gives us an additional reason to invest our clients’ money wisely as growing their portfolios grows the funds available for our advocacy work.
For more information about how our advocacy initiatives fit in with Catholic financial teachings, please see our page dedicated to the USCCB’s guidelines for morally responsible investing.