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Mercy Investment Services' approach to ethical investing

Mercy Investment Services shares its approach to socially responsible investing

Mercy Investment Services, the investment management programme of the Sisters of Merc of the Americas and its ministries, recognises the moral imperative to work for a just and sustainable world and embraces socially responsible investing as a means of pro

Smallholder woman farmer supported by One Acre Fund
One of the one million smallholder farmers supported by One Acre Fund, supported Mercy Investment Services

Promoting systemic change to respond to the critical needs of the time.

We continue the legacy of Catherine McAuley, founder of the Sisters of Mercy, who devoted her life and financial resources to serving the poor, the sick and those in need, with a particular focus on women and children. She was a tireless advocate for those marginalised by society, and she collaborated with others to remedy the injustices of her day.

Serve the common good

As Catholic investors, we are called to heed Pope Francis’ plea to 'serve the common good' by using our financial resources for the benefit of all. While many investors only use a small portion of their investment assets to support their mission, Mercy Investment Services activates its entire investment portfolio to address the Critical Concerns of the Sisters of Mercy: non-violence, racism, immigration, care for Earth, and fullness of life for women.

Mercy Investment Services’ investment strategy goes beyond negative portfolio screens and also:

  1. seeks companies with positive environmental, social and governance records;

  2. actively engages corporations and votes its proxy at companies; and

  3. invests to achieve environmental and social impacts.

Our comprehensive impact programme, rooted in the Gospel, aligns our financial resources with the mission and values of the Sisters of Mercy. We invite you to watch this video and learn more about how we use our investments to care for our common home and address the Sisters of Mercy’s concern for Earth.

Shareholder Advocacy

Mercy Investment Services actively promotes changes in corporate practices to achieve social and economic justice, a sustainable Earth and the common good, as Laudato Si’ exhorts all to do.

Through a comprehensive corporate engagement programme and collaboration with others who share our commitment to human dignity, mercy and justice, Mercy Investment Services files shareholder resolutions, participates in company dialogues, educates on issues of concern, and votes proxies of companies owned in the investment portfolio.

Annually, Mercy Investment Services engages approximately 150 companies covering 200 engagements. Highlights of our shareholder engagements include:

  1. As an active participant in the Climate Action 100+ investor initiative, Mercy, along with other investors, led efforts that have compelled 109 of the world’s highest-emitting companies to create goals for net-zero emissions by 2050 or earlier.

  2. Mercy Investment Services co-founded the Investors for Opioid Accountability, a coalition of 58 investors representing $4.3 trillion in assets under management. The IOA filed 50 resolutions on board oversight of opioid risks at pharmaceutical manufacturers, distributors and retailers.

  3. Utility companies such as AES and Southern have committed to retiring existing coal plants and reducing their emissions. AES has become an industry leader in renewable energy and battery storage, bringing the world’s largest solar-plus-storage system online.

  4. Through engagements with hotel chains, airlines and trucking companies, more than 250,000 airline staff, 730,000 truck drivers and 700,000 hotel employees have been trained to identify human trafficking victims. Hotel chains have also refused to house detainees being transported to detention facilities.

  5. An engagement with Dick’s Sporting Goods led the company to end sales of assault-style weapons and high-capacity magazines and to stop selling to anyone under the age of 21. Companies’ roles in the gun violence epidemic continues to be raised with gun manufacturers and other retailers.

  6. Companies with significant water use such as Coca-Cola and Campbell’s Soup have reduced their water use and worked to return water used in production to the communities in which they operate.

In addition, Mercy Investment Services votes its proxies for all US and global company annual meetings to address environmental, social and governance concerns. In the 2021 proxy year, Mercy Investments voted approximately 26,700 ballot initiatives on 2,200 US and global proxies.

Impact Investing

Mercy Partnership Fund

Mercy Partnership Fund, the global community investing programme of Mercy Investment Services, continues the Sisters of Mercy’s long history of investing in organisations that work to advance social and environmental justice.

Recent investments include funding to improve water services for communities in El Salvador and Honduras; providing low-cost loans to fund solar energy in underserved communities; investing in women’s economic independence through clean cookstoves in Eritrea and Ethiopia; and funding sanitation projects in Africa, Asia and Latin America.

The Sisters of Mercy and Mercy Partnership Fund have often been early investors or the first faith-based investor in organisations. Current investees include:

  1. Mercy Housing and Mercy Community Capital – Provides affordable housing and supportive services for low-income families, seniors, and people with special needs throughout the United States.

  2. International Rescue Committee‘s Center for Economic Opportunity (CEO) – Promotes economic mobility for low-income refugee and immigrant families by offering small-dollar consumer and business financing.

  3. Azure Source Capital – Works to improve water and sanitation services for underserved communities in El Salvador and Honduras.

  4. One Acre Fund – Provides seeds, fertilizer, education and post-harvest support to smallholder farmers across Africa – many of whom live on less than $1 per day – to help them grow their way out of poverty.

  5. Oweesta Corporation – Provides investment capital, training and technical assistance to Native community development financial institutions.

  6. Solar and Energy Loan Fund – Offers energy expertise and low-cost loans to homeowners and small businesses in underserved communities to finance sustainable, energy-efficient property improvements.

In 2021, Mercy Partnership Fund’s community investments benefitted individuals in 63 countries and in all 50 states.

Environmental Solutions Fund

Recognising that addressing climate change is the greatest moral imperative of our time, in 2015, Mercy Investment Services launched the Environmental Solutions Fund, which invests in renewable energy, energy and water efficiency, materials recycling and sustainable agriculture projects.

Mercy has grown the Environmental Solutions Fund by making new commitments to companies involved in global wind and solar power; electric vehicles and charging stations; organic waste collection and composting; carbon capture; recycling and compostable packaging; wastewater treatment; greenhouses; sustainable fishing; and residential energy management. Current investments include:

  1. Berkeley Energy – Accelerates social, economic and environmental sustainability through the development, construction and operation of small hydro, wind, geothermal, solar and biomass renewable energy facilities in the Philippines, Indonesia & India.

  2. Starsight – Provides clean, reliable, affordable energy in Nigeria through the installation of solar-diesel-battery hybrid systems to store green energy and offers its customers significant power cost savings, while reducing CO2 emissions from existing diesel generators and greenhouse gases.

  3. sPower – Funded wind and solar renewable energy projects in the southwest United States; put four million solar panels in operation that generate 1.3 gigawatts of clean power per year.

  4. Source Global – Installs hydropanels that convert water vapor to clean water in more than 50 countries around the world, namely in areas that lack reliable access to clean water

  5. AeroFarms and Living Green Farms – Vertical farming operations that use 95% less water, no pesticides or herbicides, and fewer nutrients than traditional farming. The US-based farms reduce the carbon footprint of vegetables by growing fresh produce in areas that typically require long-haul transport to receive the product.

  6. Volta – National network of electric vehicle charging stations. Volta uses advertising on more than 2,500 charging stations in high-traffic areas and partnerships with the location owners to keep the charging stations free for vehicle owners.

Environmental Solutions Fund projects across 14 countries and 23 states created 6.5 gigawatts of clean energy capacity and avoided 9.8 million tons of carbon dioxide in 2020.

Our Collaborative Efforts

Mercy Investment Services, from its beginning, has sought to collaborate with other organisations to develop strategies and directions to achieve a common goal. Partnerships with the Interfaith Center on Corporate Responsibility and other global, national and local coalitions, which bring together like-minded shareholders for collaboration, and participation in the Opportunity Finance Network, Mission Investors Exchange and Catholic Impact Investing Collaborative, which provide forums for building and sharing experiences about impact investing, have been instrumental in the creation and growth of our programme.

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