For Catholic organisations in the UK, investment has never been purely a financial question. Whether you are a diocese managing endowment funds, a religious order stewarding donated assets, or a charity working to advance the common good, how you invest carries moral weight. The question is not simply "what return will this generate?" but "does this investment reflect who we are and what we stand for?"

Catholic investment — sometimes called faith-consistent investing or Catholic responsible investment — is the practice of aligning an organisation's financial assets with the teachings and values of the Catholic Church. It goes beyond simply avoiding harmful companies. At its best, it actively directs capital toward outcomes that promote human dignity, care for creation, and the common good.

The scale of this matters. The Church Investors Group, which represents religious organisations across the UK and Ireland, estimates combined investment assets among its members at over £26 billion. The decisions made by Catholic trustees and finance officers have real-world consequences, both for financial returns and for the kind of world those returns help to build.

This guide explains what Catholic investment is, how it works in practice, and what Catholic organisations should look for when choosing an investment manager.

The Foundations: Catholic Social Teaching and Investment

Catholic investment is not a modern invention. Faith-based investors have considered the social and moral implications of their financial decisions for well over a century. What has changed is the depth of formal guidance available, and the growing expectation that Catholic organisations will act on it.

The intellectual and moral foundation for Catholic investment is Catholic Social Teaching (CST): a body of Church teaching that addresses the relationship between faith, economics, justice, and the care of creation. CST does not prescribe a rigid investment formula. Instead, it provides a set of principles that investors are called to apply with discernment.

Core Principles of Catholic Social Teaching Relevant to Investment

Principle	What It Means for Investors
Human dignity	Avoid companies that exploit workers, produce harmful products, or undermine the sanctity of life
The common good	Prioritise investments that benefit society broadly, not just shareholders
Care for creation	Engage with or exclude companies causing significant environmental harm
Preferential option for the poor	Scrutinise investments that profit from poverty, predatory lending, or economic exploitation
Solidarity	Consider the global impact of investment decisions, not just domestic outcomes

In 2022, the Vatican's Pontifical Academy of Social Sciences published Mensuram Bonam: a landmark document specifically designed to guide Catholic institutions and individuals in faith-consistent investing. It frames investment as a moral responsibility, not merely a financial one, stating that Catholic organisations have "a moral duty that, to the best of their ability, they use the tenets of faith and Catholic social teaching to align their investment and management practices with God's great plan."

This is a significant statement. It means that for Catholic organisations, investing in a way that contradicts Church teaching is not simply a reputational risk — it is a failure of stewardship.

Catholic Investment vs ESG: An Important Distinction

A common misconception is that Catholic investment and ESG (Environmental, Social and Governance) investing are the same thing. They are not, and the distinction matters enormously for trustees and finance officers making investment decisions.

ESG is a risk-management framework. It evaluates companies based on how well they manage environmental, social, and governance risks, and assigns scores accordingly. A fund manager using ESG criteria may avoid a company with poor labour practices — but only because those practices represent a financial liability, not because they violate a moral principle. The alignment between ESG outcomes and Catholic values is, as one Catholic investment commentator put it, "coincidental."

The Vatican's Mensuram Bonam is explicit on this point: "ESG is not a synonym for CST." A company can score highly on ESG metrics while producing or marketing products that are fundamentally incompatible with Catholic teaching.

Catholic investment, by contrast, is values-driven from the outset. It uses CST as its primary framework, with ESG considerations layered in where relevant. The intentionality is different. The question is not "does this company manage its risks well?" but "does this company's activity align with the dignity of the human person and the common good?"

Where the Approaches Diverge

• Life issues: Catholic investment applies specific exclusions around the sanctity of life that have no equivalent in standard ESG frameworks.
• Engagement with purpose: Catholic investors engage with companies not just to reduce risk, but to promote values-aligned behaviour — a subtly but meaningfully different motivation.
• Moral authority: Catholic investment draws on authoritative Church teaching, giving trustees a clear, stable framework rather than the shifting consensus of ESG ratings agencies.
• Scope: CST encompasses dimensions of human interconnectedness — what Mensuram Bonam calls "the sacramental quality of our human interconnectedness" — that no ESG score can capture.

For Catholic organisations, this distinction has practical consequences. Selecting a fund on the basis of its ESG rating alone is not sufficient. The fund's underlying values framework must be examined.

How Catholic Investment Works in Practice

Catholic investment is not a single product or strategy. It is an approach that can be applied across asset classes and portfolio types. In practice, it typically involves three interconnected activities.

1. Exclusionary Screening

The most visible element of Catholic investment is what it avoids. Exclusionary screening removes companies from the investment universe whose activities clearly contradict Catholic teaching. Common exclusions include:

• Producers or distributors of pornography
• Tobacco manufacturers
• Gambling operators
• Companies involved in high-interest-rate or predatory lending
• Weapons manufacturers, particularly those producing anti-personnel landmines or nuclear weapons
• Companies whose activities cause significant damage to the environment
• Businesses that violate the sanctity of human life

These exclusions are not arbitrary. They flow directly from CST principles and are consistent with guidance issued by bodies including the Catholic Bishops' Conference of England and Wales.

2. Positive Screening and Impact Investing

Exclusionary screening tells you what to avoid. Positive screening tells you what to seek out. Catholic investment increasingly incorporates a deliberate tilt toward companies and sectors that actively advance the common good: businesses promoting affordable housing, clean energy, access to healthcare, or fair labour standards.

Impact investing takes this further, directing capital into projects with measurable social or environmental outcomes alongside financial returns. Mensuram Bonam explicitly endorses this approach, noting that "impact investing can be interpreted in a way more consistent with Catholic social teaching."

3. Active Ownership and Stewardship

Perhaps the most powerful but least understood tool available to Catholic investors is active ownership. As shareholders, Catholic organisations have the right to engage directly with company management, vote at annual general meetings, and file or support shareholder resolutions.

This is not a passive role. It is an opportunity to use financial influence to encourage companies to improve their practices on issues ranging from climate action to executive pay to human rights in supply chains. For Catholic investors, engagement is an expression of solidarity — a recognition that withdrawal alone is not always the most effective response to harmful corporate behaviour.

Key takeaway: Catholic investment is not just about saying no. It is about using every tool available — exclusion, positive selection, and active ownership — to ensure that assets work in service of the values an organisation holds.

Does Faith-Consistent Investing Affect Financial Returns?

This is the question that trustees most often ask, and it deserves a direct answer: the evidence does not support the assumption that ethical constraints reduce long-term investment performance.

The idea that values-based investing requires a financial sacrifice has been increasingly debunked. Research consistently shows that companies with strong governance, responsible environmental practices, and fair treatment of workers tend to be more resilient over the long term. Avoiding companies with significant exposure to regulatory, reputational, or ethical risk is simply prudent portfolio management.

There is also a structural argument. Catholic investment frameworks exclude sectors — such as tobacco, gambling, and certain weapons manufacturers — that face growing regulatory pressure and shrinking social licence. An investment manager who avoids these sectors on ethical grounds may, over time, also be avoiding concentrated long-term risk.

That said, it is worth being honest about what faith-consistent investing involves. There will be periods where excluded sectors outperform the broader market. A Catholic investment portfolio will not always track a mainstream benchmark. The question for trustees is not whether performance will be identical to an unconstrained fund, but whether a well-managed, diversified, values-aligned portfolio can deliver the returns needed to sustain the organisation's mission over time. The answer, based on the evidence available, is yes.

For further context, Investopedia's overview of socially responsible investing provides a useful summary of the performance research in this area.

What Catholic Organisations Should Look for in an Investment Manager

Choosing an investment manager is one of the most consequential decisions a Catholic organisation's trustees will make. The right manager does more than generate returns — they become a long-term partner in the stewardship of assets held in trust for the Church's mission.

Here are the questions that matter most in that selection process.

Does the manager understand Catholic values specifically?

Faith-consistent investing is a specialist discipline. A manager who offers a generic ethical fund or a standard ESG strategy is not the same as one who has built their investment process around Catholic Social Teaching. Ask specifically: how does the manager apply CST principles? Who provides guidance on faith-consistency? Is there an advisory or oversight committee with relevant theological expertise?

How robust is the screening process?

Screening criteria should be clearly documented, consistently applied, and regularly reviewed. Ask to see the investment policy. Understand what is excluded and on what basis. Understand how the manager handles borderline cases — companies with some harmful activities alongside otherwise positive operations.

What does active ownership look like in practice?

Any credible Catholic investment manager should be able to demonstrate a track record of meaningful engagement with companies on issues relevant to Catholic values. This includes voting records at annual general meetings, evidence of direct dialogue with company management, and participation in collaborative investor initiatives on issues such as climate change and human rights.

Is the manager transparent about performance and values alignment?

Trustees have a fiduciary duty to both financial performance and the organisation's mission. A good investment manager will report clearly on both dimensions, not just financial returns. Look for regular reporting on stewardship activity, screening decisions, and any changes to the investment policy.

Does the manager have experience with charities and religious organisations?

The regulatory and governance context for charities and religious bodies in the UK is specific. The Charity Commission and the Charities (Protection and Social Investment) Act 2016 both have implications for how charity trustees can approach ethical investment. A manager experienced in this space will understand these obligations and help trustees navigate them confidently.

How Epworth Can Help

At Epworth Investment Management Ltd (“Epworth”), ethical and faith-consistent investing is not a product add-on. It is the reason we exist.

As part of the Methodist Church's Central Finance Board, we have managed assets for churches, charities, and faith-based organisations for decades. We understand the specific responsibilities that come with holding assets in trust for a faith community. We understand that trustees are accountable not just to financial beneficiaries, but to a broader mission and set of values.

While our roots are Methodist, our approach to ethical investment is grounded in the same broad Christian tradition that underpins Catholic Social Teaching: the dignity of every person, the responsibility to care for creation, the call to work for the common good. These are not abstract principles for us. They shape every investment decision we make.

We currently manage approximately £1.3 billion in assets, with a rigorous ethical screening process applied across all our funds. Our investment team combines deep financial expertise with a genuine commitment to values-aligned stewardship. We offer:

• Discretionary portfolio management for organisations that want a fully managed, faith-consistent investment solution
• Multi-asset funds designed to deliver long-term real returns within an ethical framework
• Cash plus funds for organisations with shorter-term liquidity needs who still want their cash working in alignment with their values

If you are a Catholic diocese, religious order, charity, or institution reviewing how your assets are invested, we would welcome the opportunity to talk. The conversation does not need to start with a mandate. It can start with a question: are your investments truly reflecting the values your organisation stands for?

To speak with our team about faith-consistent investment, please get in touch with Epworth.

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.