Cutting Through the Jargon
In today’s investment landscape, phrases like “ethical,” “responsible,” and “sustainable” are everywhere. But what does ethical investment actually mean—especially for trustees of churches, charities, and religious organisations?
At Epworth Investment Management, we define ethical investment not as a marketing label, but as a principled commitment to align capital with values. For us—and for our clients—it’s a matter of integrity, stewardship, and faithfulness.
Ethical Investment vs ESG: What’s the Difference?
Many investment managers now promote ESG (Environmental, Social and Governance) strategies. These approaches assess how companies manage risks related to things like pollution, labour conditions, or board diversity.
But there’s a critical distinction:
- ESG is a risk lens—a way of evaluating companies' exposure to non-financial factors.
- Ethical investment is a values lens—a way of aligning investments with moral and spiritual convictions.
In other words, ESG asks how well a company behaves; ethical investment asks whether a company’s core activity is morally acceptable.
For example: An arms manufacturer with a diverse board and net-zero plan might score highly on ESG—yet it would be excluded from an ethical portfolio based on Christian principles.
Core Components of Ethical Investment
Ethical investment typically includes three overlapping tools:
1. Exclusions – Avoiding harm
The first step is to screen out industries and companies whose activities conflict with moral and theological values. Common exclusions include:
- Fossil fuel extraction
- Tobacco and adult entertainment
- High-interest lending (e.g. payday loans)
- Gambling and alcohol
- Weapons, especially those with indiscriminate effect
- Human rights violations and exploitative labour
At Epworth, our exclusions are based on clear theological principles and are reviewed regularly in partnership with Christian stakeholders.
2. Positive Alignment – Seeking the good
Ethical investing isn’t just about what you avoid—it’s about what you support. That includes companies that:
- Promote human rights and decent work
- Lead on climate change and biodiversity
- Provide access to health, nutrition, and housing
- Uphold transparency, fairness, and integrity
We favour companies aligned with standards like the Science-Based Targets initiative and the Access to Nutrition Index, and we apply a Christian lens to determine their social contribution.
3. Engagement – Using your voice
Ethical investors should not be passive. Through active ownership, you can:
- Vote at AGMs based on moral principles
- Engage company leadership on issues like climate, human rights, and inequality
- Join faith-based coalitions to increase influence
- Escalate if progress is not made—including filing resolutions or divesting
This is especially important for faith-based charities, who have a duty to ensure their capital is stewarded with integrity.
Learn more about how Epworth engages companies on behalf of Christian investors here.
Why Ethical Investment Matters for Charities and Churches
Charity trustees, treasurers, and denominational boards are increasingly asking:
Are our investments consistent with our mission?
Ethical investment provides a clear framework to answer that question. It allows churches and charities to:
- Honour their values
- Avoid reputational risk
- Strengthen donor and stakeholder trust
- Align with regulatory expectations
- Contribute to a more just and sustainable economy
It’s not just about doing less harm—it’s about using capital for good.
Isn’t Ethical Investing Lower-Performing?
That’s a common myth—but not supported by the data.
Well-governed, ethically screened portfolios can deliver competitive long-term returns while avoiding exposure to regulatory, environmental, or reputational risks. In fact, ethical investors are often better positioned for the transition to a low-carbon, high-accountability economy.
At Epworth, we don’t believe you have to choose between financial prudence and moral purpose. You can—and should—have both.
What Makes Ethical Investing Christian?
For us, the Christian tradition provides a rich foundation for ethical investment. It’s grounded in:
- Stewardship of creation (Genesis 2:15)
- Respect for human dignity (Micah 6:8, Luke 4:18)
- Justice for the poor and marginalised (Proverbs 31:8–9)
- Transparency and truth in action (2 Corinthians 8:21)
This is not an overlay—it’s the core of what we do. Our ethical policies are shaped by documents like Mensuram Bonam (Catholic), JACEI guidance (Methodist), and broader Christian social teaching.
Conclusion: Invest with Clarity, Not Confusion
In a world full of vague claims and shifting ESG standards, ethical investment offers something different: moral clarity, governance integrity, and alignment with purpose.
Whether you are a local church, a national charity, or a religious order, you have the opportunity to make your capital reflect your values.
Talk to us about how to implement an ethical investment approach rooted in Christian faith and financial responsibility.