We get asked this question a lot. A trustee from a church or charity will come to us having already done some research, having read about ESG funds and sustainability labels and ethical screening, and they'll ask: "Is what you do just ethical investing with a Christian badge on it?"

It's a fair question. And the honest answer is: no, but we understand why it looks that way from the outside.

The terms "ethical investing" and "faith-based investing" are used interchangeably in a lot of conversations, and that conflation does a disservice to both. They share common ground, but they are built on different foundations, driven by different motivations, and they produce meaningfully different outcomes for investors who care about where their money goes.

Here's the short version: ethical investing asks "does this company cause harm?" Faith-based investing asks that question too — but it also asks "does this align with who we are, what we believe, and what we are called to steward?" That second

What Is Ethical Investing?

Ethical investing is a broad umbrella. At its core, it means considering values alongside financial returns when making investment decisions. In practice, that usually involves one or more of the following:

• Negative screening: excluding companies involved in tobacco, arms, fossil fuels, gambling, or adult entertainment
• ESG integration: assessing companies on Environmental, Social, and Governance criteria as part of the investment process
• Impact investing: directing capital towards businesses or projects that generate measurable positive outcomes
• Shareholder engagement: using ownership rights to push companies towards better behaviour

These are all legitimate and valuable tools. The FCA's sustainability disclosure labels, introduced to tackle greenwashing in the UK market, have helped bring more rigour and transparency to the space.

But here's what ethical investing, in its mainstream form, often lacks: a fixed moral anchor. The definition of "ethical" shifts with regulation, public opinion, and commercial pressure. A fund can rebrand its ESG positioning, drop a sustainability label, or quietly adjust its screening thresholds without fundamentally changing what it believes. According to Morningstar, the first quarter of 2025 alone saw $8.6 billion in net outflows from ESG funds globally, as investor confidence in the label wavered. That is not a crisis of values — it is a crisis of conviction.

When ethics are a product feature rather than a first principle, they are vulnerable to market forces.

What Is Faith-Based Investing?

Faith-based investing starts from a different place entirely. Rather than building an investment policy and then applying ethical filters to it, faith-based investors begin with a set of theological convictions and allow those convictions to shape every aspect of how they invest.

For us at Epworth Investment Management Ltd (“Epworth”), Christian ethics are a first-principle matter. That is not a marketing line. It means that our fund managers are not handed a list of excluded stocks by a separate ethics team and told to work around it. The ethical and the financial analysis happen together, by the same people, at the same time. Theology and investment returns are not in tension at Epworth — they are integrated.

What does that look like in practice?

Faith-based investing typically involves:

• Theologically grounded exclusions: not just avoiding harm, but avoiding activities that conflict with specific religious teaching — for us, that includes high-interest lending, certain forms of gambling, and activities incompatible with human dignity
• Active stewardship as a moral duty: engagement with companies is not just a governance exercise; it is an expression of the Christian concept of stewardship — the responsibility to care for what has been entrusted to us
• Accountability to a faith community: our ethical priorities are shaped in dialogue with clients, the Methodist Conference, and the Joint Advisory Committee on the Ethics of Investment (JACEI), which reports annually to the Methodist Church
• Consistency regardless of market conditions: our values do not change because ESG fell out of fashion or because a particular sector became profitable

The Church Investors Group, which represents religious organisations across the UK and Ireland managing combined assets of over £26 billion, has described this approach as "faith-consistent investing" — a framework that puts Christian ethics at the heart of how managers are assessed, selected, and monitored. That is precisely what we have been doing since the Central Finance Board

How Do the Two Approaches Compare?

The table below captures the key differences as we see them:

	Ethical Investing	Faith-Based Investing
Moral foundation	Broadly defined values; varies by fund	Fixed theological principles
Who defines "ethical"	Fund manager, regulation, market trends	Faith tradition + community accountability
Screening approach	Negative exclusions; often ESG integration	Theologically grounded exclusions + active engagement
Engagement style	Governance-focused; varies by manager	Stewardship as a duty; morally motivated
Consistency over time	Can shift with market sentiment	Anchored to unchanging beliefs
Who it suits	Any investor seeking values-aligned returns	Churches, faith-based charities, mission-led organisations

It is worth being clear: these approaches are not mutually exclusive. At Epworth, we practice both. Our ethical approach is rigorous by any mainstream standard — we apply strict exclusions and tolerances across fossil fuel production, controversial weapons, tobacco, and adult entertainment. We are members of the Church Investors Group, the Institutional Investors Group on Climate Change, and the UK Sustainable Investment and Finance Association.

But our ethical work is sustained and deepened by its faith foundation. That is the

Which Is Better?

For a church, a Christian charity, or any mission-led organisation, we believe faith-based investing is not just better — it is the more honest choice.

Here is why. When a church invests, it is not acting as a neutral financial entity. It is acting as a steward of resources that belong, in a theological sense, to something larger than itself. The question is not only "are we avoiding harm?" but "are our investments a faithful expression of what we believe and who we serve?"

A mainstream ethical fund cannot answer that second question. It was not designed to.

That said, we also work with non-faith charities and values-led organisations that are not religiously affiliated. A trade union, for instance, may choose ourWS Multi Asset Fund for Charities not because of its Christian heritage, but because our screening criteria are clear, our governance is transparent, and our engagement with companies is genuinely active. The rigour of our faith-based approach produces an ethical product that stands on its own terms for any investor who values conviction over convenience.

The practical question for trustees is this: does your investment manager's ethical approach have a foundation that will hold when markets are volatile, when ESG labels fall out of favour, or when a profitable sector conflicts with your values? Ours does. It has for decades.

Investing with Epworth

We are a wholly owned subsidiary of the Central Finance Board of the Methodist Church, managing around £1.3 billion in assets exclusively for UK churches and charities. Our ethical approach is not an overlay — it is embedded in how we research companies, how we vote at AGMs, how we engage with management, and how we report back to clients.

If you are a trustee weighing up your investment options and wondering whether the distinction between ethical and faith-based investing matters for your organisation, we think it does. And we would be glad to talk it through.

Get in touch with the Epworth team to learn more about how we invest on behalf of churches and charities.

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Disclaimer: This article is intended for general informational purposes only and does not constitute financial advice. The information provided should not be relied upon as the basis for any investment decision. Religious organisations and their trustees should seek independent financial and legal advice appropriate to their specific circumstances before making any investment decisions. Epworth Investment Management Limited is authorised and regulated by the Financial Conduct Authority.