For many charities and churches, the question of how to invest their reserves is not purely financial. It is a question of integrity. If your organisation exists to relieve poverty, protect the environment, or advance the Gospel, does it make sense to hold funds in companies that undermine those very goals?
Values-based investing is the answer to that question. It is an approach to managing money that places your organisation's beliefs, mission, and ethical commitments at the heart of every investment decision, without sacrificing the financial returns your charity depends on.
This guide explains what values-based investing means in practice, how it differs from conventional investing and generic ESG, and how Epworth Investment Management Ltd (“Epworth”) puts it to work for hundreds of UK churches and charities.
Key takeaway: The Charity Commission currently oversees more than 170,000 registered charities managing £102 billion in income. Across this sector, the expectation that investments should reflect an organisation's stated values is growing rapidly.
What Is Values-Based Investing?
Values-based investing (sometimes called faith-consistent investing or mission-aligned investing) is the practice of constructing an investment portfolio that reflects the moral, ethical, or theological principles of the investor. Rather than selecting investments purely on the basis of financial return, the investor applies a set of values-driven criteria to determine which companies, sectors, and assets are acceptable to hold.
For charities and churches, this means ensuring that the money you invest does not contradict the mission your organisation exists to fulfil.
Values-based investing is not the same as ESG. Environmental, Social, and Governance (ESG) scoring is a data-driven framework used by mainstream fund managers to assess corporate risk. It is a useful tool, but it is designed for general institutional investors, not for organisations with a specific theological or charitable mission. A company can score highly on an ESG index and still derive significant revenue from gambling, tobacco, or weapons manufacturing.
Values-based investing goes further. It starts from a set of convictions, whether Christian, Catholic, Islamic, or broadly ethical, and applies those convictions consistently across every investment decision.
The Three Core Components
| Component | What It Means in Practice |
| Negative screening | Excluding sectors or companies whose activities conflict with your values (e.g. fossil fuels, gambling, weapons) |
| Positive screening | Actively seeking companies whose activities align with your values (e.g. sustainable housing, healthcare, ethical supply chains) |
| Active engagement | Using shareholder voting rights and direct dialogue to influence company behaviour on ethical issues |
Most values-based investment managers use all three components, though the balance and emphasis will vary depending on the investor's specific principles.
Why It Matters for Charities and Churches
Trustees and treasurers operate under a dual obligation. You are legally required to manage your charity's assets prudently and in the best interests of your beneficiaries. You are also morally accountable to your donors, congregation, and the communities you serve.
These two obligations are not in conflict. In fact, the Charity Commission's guidance on investment makes clear that trustees may take ethical considerations into account when making investment decisions, provided doing so does not result in significant financial detriment.
The reputational risk of misalignment is real. Public trust in charities remains high: research published by the Charity Commission in 2025 found that 57% of people have high trust in charities, with 66% believing they operate to high ethical standards. That trust is hard-won and easily damaged. Holding investments in sectors that contradict your charitable objects is one of the fastest ways to erode it.
The Specific Case for Faith-Based Organisations
For churches, religious orders, and faith-based charities, the argument for values-based investing is even more direct. Scripture and Christian tradition are clear that stewardship of resources is itself a moral act.
"Where your treasure is, there your heart will be also." (Matthew 6:21)
The Church Investors Group, which represents faith-based institutional investors across denominations, has consistently argued that church investors have a responsibility to bring "grace and understanding" to their ethical investment practice. Values, as their 2024 annual report noted, matter "whether in or out of fashion."
For Catholic organisations, the Mensuram Bonam framework, issued by the Holy See's Dicastery for Promoting Integral Human Development, provides specific guidance on faith-consistent investing, covering human dignity, care for creation, and the common good.
- Churches must ensure their investments do not contradict their witness in the community
- Christian charities need to demonstrate alignment between their fundraising message and their financial management
- Religious orders carry a particular responsibility to model the values they profess
- Denominational bodies are often accountable to thousands of individual congregations and members
The bottom line is straightforward: if your organisation would not publicly endorse a company's activities, it should not be quietly profiting from them.
How Epworth Investment Management Approaches Values-Based Investing
Epworth Investment Management was founded in 1996 and is wholly owned by the Central Finance Board of the Methodist Church, which was itself established by an Act of Parliament in 1960. That heritage matters: Epworth is not a mainstream asset manager that has added an ethical overlay to attract a niche market. It was built from the ground up to serve churches and charities, and it works exclusively with those organisations.
Managing around £1.3 billion in assets, Epworth applies a Christian ethical investment framework that goes considerably deeper than a standard ESG screen.
Step 1: Theological and Ethical Foundations
Epworth's screening criteria are shaped by established theological and denominational frameworks, not invented by a compliance team. These include:
- The Methodist Joint Advisory Committee on the Ethics of Investment (JACEI)
- The principles of Catholic Social Teaching, including Mensuram Bonam and Laudato Si'
- An internal Ethical Advisory Committee that includes external theological and sector experts
- Ongoing collaboration with Christian networks, mission bodies, and partner denominations
This means the ethical framework is not static. It is a living, theologically informed process that evolves as the Church's understanding of justice, stewardship, and creation care develops.
Step 2: Clear Ethical Exclusions
Epworth applies firm exclusions to companies whose core activities conflict with Christian values. These are governed by published revenue thresholds (typically 0%, 5%, or 10% of a company's income), providing transparency and consistency.
Sectors excluded from Epworth portfolios include:
- Fossil fuel extraction and thermal coal
- Tobacco and adult entertainment
- High-interest or predatory lending (including payday loans)
- Gambling
- Weapons manufacturing, particularly indiscriminate or nuclear systems
- Companies with severe human rights violations or exploitative supply chains
- Sovereign bonds from oppressive regimes
As Epworth explains in its ethical screening overview, screening is "not an afterthought or marketing overlay. It is integrated into every stage of our investment process, from initial research to portfolio construction and ongoing monitoring."
Step 3: Positive and Cautionary Screening
Beyond exclusions, Epworth actively seeks companies with positive ethical characteristics. These include firms with:
- Science-based climate targets and strong environmental performance
- Transparent and fair supply chains
- Robust governance and responsible executive pay
- Business models that contribute to health, education, or sustainable housing
- Strong records on worker rights and gender equality
Some companies pass the basic exclusion test but still raise concerns. In such cases, they may be held under close review, flagged for engagement, or excluded on a discretionary basis. This cautionary layer is what distinguishes a genuinely values-based approach from a simple tick-box screen.
Step 4: Active Shareholder Engagement
Epworth takes the view that Christian investors have an obligation to speak out, not merely to avoid. Through its active engagement programme, Epworth:
- Votes at company AGMs in line with Christian principles
- Challenges corporate behaviour on climate change, conflict, and executive pay
- Joins investor coalitions to increase collective pressure for change
- Engages directly with company leadership and policy bodies
Where engagement fails to produce change, divestment is considered as a last resort. This approach reflects the conviction that remaining in the room, and using that position, is often more powerful than walking away.
Practical Examples: Epworth's Investment Solutions
Values-based investing is not a single product. It is a framework that can be applied across a range of investment structures, from a small local church managing a few thousand pounds in reserves to a large denominational body overseeing millions. Epworth offers three core solutions, each designed to apply the same ethical principles at different levels of complexity and scale.
The WS Epworth Multi Asset Fund
The Multi Asset Fund is Epworth's flagship pooled investment solution for charities of all sizes. It invests in a diversified portfolio of ethically screened equities, bonds, property, cash, and alternative assets, seeking to deliver both income and long-term capital growth.
Key features:
- Minimum investment of just £1,000, making it accessible to smaller churches and charities
- Fully ethically screened across all asset classes, using Epworth's Christian criteria
- Designed to provide a balanced portfolio without requiring trustees to manage individual investments
- Suitable for organisations looking for a straightforward, all-in-one ethical investment solution
A practical example: a major Christian denomination uses Epworth's Multi Asset Fund to manage reserves on behalf of local congregations, creating sub-accounts within the fund structure. This gives individual churches professional oversight and ethical alignment, within a single, consolidated relationship with Epworth.
The Discretionary Service for Charities (DSC)
For larger organisations with more complex requirements, Epworth's Discretionary Service for Charities (DSC) provides a bespoke investment management service. Portfolios are constructed to meet each organisation's specific objectives, risk tolerance, and ethical requirements.
Key features:
- Bespoke portfolio construction across five investment strategies
- Active management by Epworth's investment team on behalf of trustees
- Full application of Epworth's Christian ethical criteria, with the flexibility to incorporate additional denominational requirements
- Suitable for larger charities, religious orders, schools, and denominational bodies
For Catholic organisations, for example, Epworth can align the discretionary portfolio with the principles set out in Mensuram Bonam, ensuring the investment approach reflects Catholic Social Teaching on human dignity, care for creation, and the common good. More detail on this approach is available on Epworth's Catholic organisations page.
The Epworth Cash Plus Fund
Not every investment decision is about long-term growth. Many charities hold significant cash reserves for operational purposes, capital projects, or short-term needs, and those funds also need to be managed in a way that reflects the organisation's values.
The Epworth Cash Plus Fund provides same-day access to deposits while aiming to deliver a competitive interest rate. The fund pools charities' cash across approximately 40 high-quality banking counterparties, all rated A or higher and within the top 75 global banks.
Key features:
- Same-day access via BACS or CHAPS
- Competitive interest rate (currently 4.02% A.E.R. as at November 2025)
- Minimum investment of £1,000 with no maximum
- Accounts can typically be opened within five days
- The fund has never experienced a capital loss in its history since launching in 2006
The Cash Plus Fund currently holds approximately £740 million from around 4,500 Methodist churches alone, with a further £430 million from Methodist-related deposits. The average Epworth client holds around £660,000 in the fund.
A note on scale: Epworth also maintains more than 6,000 cash deposit accounts for charities across its group, demonstrating the breadth of its reach across the UK faith and charitable sector.
Comparing the Three Solutions
| Solution | Best For | Minimum Investment | Ethical Approach |
| Multi Asset Fund | Charities seeking growth and income | £1,000 | Fully screened, pooled |
| Discretionary Service | Larger charities needing bespoke management | Varies | Tailored to organisation's values |
| Cash Plus Fund | Short-term reserves and operational cash | £1,000 | Ethically managed banking panel |
All three solutions are governed by the same underlying Christian ethical framework. The difference is in structure, scale, and the degree of customisation available.
Does Values-Based Investing Affect Financial Returns?
This is the question most trustees ask first, and it deserves a direct answer: the evidence does not support the assumption that ethical investing means lower returns.
The concern is understandable. Excluding entire sectors, particularly fossil fuels and tobacco, might appear to reduce the investment universe and therefore limit performance. In practice, the relationship is more nuanced.
Several factors work in favour of values-based portfolios:
- Companies with strong ethical and governance standards tend to carry lower regulatory and reputational risk
- Sectors excluded by faith-based screens (fossil fuels, tobacco) have faced significant structural headwinds and increased regulatory pressure in recent years
- Positive screening towards sustainable business models can identify companies with stronger long-term growth prospects
- Active engagement can improve corporate behaviour, which in turn supports long-term value
As Investopedia notes, socially responsible investing has a track record that increasingly demonstrates competitive performance against conventional benchmarks, particularly over longer time horizons.
Epworth's own position is clear: "Many ethical funds match or exceed the long-term performance of their conventional peers. We believe you don't have to choose between values and value."
The Trustee Duty Question
Some trustees worry that prioritising ethics over returns could constitute a breach of their fiduciary duty. This concern has been substantially addressed by legal and regulatory developments in the UK.
The Charity Commission's guidance (CC14) confirms that trustees can adopt an ethical investment policy provided:
- The policy does not cause significant financial detriment compared to a conventional approach
- The policy is consistent with the charity's objects and purposes
- The decision is properly documented and reviewed periodically
For faith-based charities, there is an additional consideration: investing in sectors that contradict your charitable objects could itself be a governance failure. A church charity that profits from gambling or predatory lending is arguably not acting in the best interests of its beneficiaries, regardless of the financial return.
Key point: The question for trustees is not "can we afford to invest ethically?" It is "can we afford not to?"
How to Get Started with Values-Based Investing
For trustees and treasurers taking the first steps towards values-based investing, the process does not need to be complicated. The following steps provide a practical framework.
1. Review Your Current Investments
If your charity already holds investments, the first step is to understand what you own. Are your current holdings consistent with your charitable objects and the values your organisation publicly espouses? Epworth offers an ethical audit of existing portfolios for organisations considering a move to values-aligned management.
2. Draft or Update Your Investment Policy Statement (IPS)
An Investment Policy Statement sets out your charity's investment objectives, risk tolerance, and ethical requirements in a single, governing document. It is the foundation of good investment governance and is increasingly expected by auditors and regulators.
A well-crafted IPS should address:
- Your organisation's financial objectives (income, growth, capital preservation)
- Your ethical requirements and the principles that underpin them
- The sectors and activities you wish to exclude
- Your approach to engagement and voting
- How you will review and update the policy over time
Epworth can assist trustees in drafting or updating an IPS that reflects both their regulatory responsibilities and their faith-based values.
3. Choose the Right Investment Structure
As the comparison table above shows, the right structure depends on your organisation's size, objectives, and the complexity of your requirements. For most smaller churches and charities, the Multi Asset Fund provides a straightforward, fully managed solution from as little as £1,000. Larger organisations with bespoke needs may benefit from the Discretionary Service.
4. Engage Your Board and Congregation
Values-based investing is a governance decision, not just a financial one. Bringing your board, synod, or congregation into the conversation builds shared ownership of the approach and strengthens accountability.
Questions worth raising at board level:
- Does our current investment approach reflect our mission and values?
- Are we comfortable explaining our investment holdings to our donors and beneficiaries?
- Do we have a documented investment policy that our trustees have formally approved?
- When did we last review our investment arrangements?
5. Review Regularly
The ethical landscape changes. Companies change their business models, new controversies emerge, and theological thinking evolves. A values-based investment approach requires periodic review to ensure it remains aligned with your organisation's current understanding of its responsibilities.
Epworth's ongoing monitoring process, supported by independent third-party data providers and its internal Ethical Advisory Committee, means that portfolio holdings are continuously assessed for new developments, not just screened at the point of purchase.
For a comprehensive overview of Epworth's full range of services, visit the services overview page.
Investing With Integrity: The Epworth Difference
Values-based investing is not a compromise between ethics and finance. For charities and churches, it is the natural expression of who you are and what you stand for. The money you invest is not separate from your mission; it is part of it.
What distinguishes Epworth from generalist asset managers offering an ethical overlay is the depth of its commitment and the exclusivity of its focus. Epworth works only with UK churches and charities. Its ethical framework is theologically grounded, independently overseen, and applied consistently across every investment it makes. And with a minimum investment of £1,000, values-based investing is accessible to organisations of every size, from a small rural congregation to a large national charity.
The practical case is clear:
- Align your investments with your charitable objects and avoid reputational risk
- Fulfil your trustee duties under Charity Commission guidance
- Access professional investment management without sacrificing your values
- Report transparently to your board, auditors, donors, and congregation
If you are ready to explore whether your current investment arrangements reflect your organisation's values, or if you are starting from scratch and need guidance on where to begin, Epworth's team is available to help.
Get in touch with Epworth Investment Management to discuss your organisation's investment needs.
Epworth Investment Management Limited (“Epworth”) is authorised and regulated by the Financial Conduct Authority (FCA Registered Number 175451). It is incorporated in England and Wales (Registered Number 3052894), with a registered office at Methodist Church House, 25 Tavistock Place, London WC1H 9SF and is wholly owned by the Central Finance Board of the Methodist Church. Epworth-managed funds are designed for long term investors. The value of units in funds can fall as well as rise and past performance is not a guide to future returns. The level of income is also variable and investing in Epworth
funds will not be suitable for you if you cannot accept the possibility of capital losses or reduced income. Any estimates of future capital or income returns or details of past performance are for information purposes and are not to be relied on as a guide to future performance.