FaithInvest has been working with the Church of Scotland to support the establishment of an ethical investment committee between the Church and The Church of Scotland Investors Trust (COSIT). The committee will be made up of members of COSIT and the Church of Scotland and act as advisory body to COSIT.
Most of the Church of Scotland's investments are looked after by COSIT, which was set up by an Act of Parliament and is therefore not bound by the Church of Scotland's highest decision-making body, the General Assembly. Instead, COSIT is bound by Trust law which means it is responsible for the Trust's assets. 'Normally that means an investment is there to provide good financial returns but can do so in keeping with the Trust's aims and values,' explained Valerie Brown, head of Christian Aid Scotland and chair of the Special Committee set up to work on this project.
For some time now, Church of Scotland General Assembly members have been asking how they could work more closely with COSIT to enable the Church's concerns around ethical issues to be taken into account in its investment decisions. The decision to set up the ethical investment committee as an advisory body to COSIT is the result of two years of deliberations, and was formally approved at the Church's recent 2023 General Assembly meeting.
Rev Sally Foster-Fulton, Moderator of the General Assembly, 2023-24
A poisoned chalice?
The decision to establish an ethical investment committee, formally the Ethical Oversight Committee (EOC), was carefully considered by the Church. Speaking at the General Assembly, Valerie Brown said: ‘When the five of us that comprised the Special Committee were tasked with this role two years ago, I think we all felt that we'd taken on something of a poisoned chalice!
'The task seemed so enormous and we could very easily have spent the two years just trying to come up with a working definition of the term 'ethical' – and we're still working on that. We threw ourselves into learning as much as we could about investment practices, ethical investment's successes and limitations, what the Church is doing, and what other churches are doing.'
The committee members also felt it important to hear from people who wanted the Church to be cautious and not risk income, and from those who felt the Church 'should be prophetic and take a lead in making sure that our money is as 'clean' as possible, clean being another word that we're still working on the definition of,' she said.
'What we do with our money is not a peripheral issue, it is a deeply spiritual issue because at its heart it portrays our values and priorities. How we acquire our money and what we do with it is, in many ways, central to our faith' – Committee Chair Valerie Brown
A lengthy process of discernment
As part of this process, the Church turned to FaithInvest for guidance. Mathew Jensen, FaithInvest's Director of Investment Solutions, said of the experience: ‘We were thrilled by the opportunity when we initially began working with the Special Committee and COSIT 18 months ago.' After undergoing a very thorough vetting process, ‘we jumped in to explore the faith-based rationale for formalising the integration of faith-consistent investing, and then to map the practical steps needed to help make that vision a reality,’ he said.
A significant issue among faith-based investors – and, in fact, of values-driven investors of any kind – are the implications of making investment decisions based on values considerations. What happens to investment returns? Can this be done in a responsible way from a fiduciary standpoint?
As Ms Brown recounted; ‘When we met with FaithInvest, we had a bit of a lightbulb moment. They were proposing a structure that other churches had used, and as soon as we met with them, I approached COSIT, and told them I thought we might just have cracked a way to work through this together in a way that moved the conversation forward without impinging on their role as trustees.'
'When we spoke to people about ethical investment [there] was a broad assumption that if we were to be more ethical, we would lose money... We didn't come across of any evidence of that being the case. We didn't speak to any church body that had lost income in order to be more ethical.' – Committee Chair Valerie Brown
The Ethical Oversight Committee
The Ethical Oversight Committee (EOC) is an advisory group that will help COSIT:
to focus on the theological and ethical background of what the Church should be investing in
to consider the complexities of the investment options
be a space for intelligent conversations that can support the Investors Trust to provide the investment managers with very specific briefs, in line with the Church's values.
The full report submitted to the General Assembly can be found here.
‘We applaud the dedication of the Church in its pursuit of faith-consistent investing and are delighted to have been selected to continue working with the EOC to help guide the integration of the Church's faith values to its investments.’ – Mathew Jensen, FaithInvest
Assembly conveners raise their voices in song
Looking ahead, Mathew Jensen said: ‘We applaud the dedication of the Church in their pursuit of faith-consistent investing and are delighted to have been selected to continue working with the EOC to help guide the integration of their faith values to their investments.’
Ms. Brown expressed gratitude to the Investors Trust for its willingness to work with the Special Committee on developing this process, and going forward with the Ethical Oversight Committee.