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The Role of Ethics Committees for Faith and Values Investors

We recently covered research and findings on the use of Ethics Committees by faith-based asset owners (often appearing under many names – responsible investment committee, principals or values committee and more) for a faith organization exploring the topic. We’ll have much more to say on Ethics Committees in an paper to be published later this year, but it reminded me of research Unleashing the Potential of Faith-Based Investors for Positive Impact and Sustainable Development, from the University of Zurich, which answers the question some of you may be asking – what is an Ethics Committee, and why, according to these authors, is it 'unique to faith-based investors'?


First, from our IP&G database, which we rely on for our ongoing 'Good Intentions' research, we can only identify a handful – just six with meaningful definitions, of the nearly 100 present – referencing an Ethics Committee or equivalently named group. So while possibly 'unique', they’re apparently not widely employed by faiths, or at least named and defined in investment governance documents.


Nevertheless, the University of Zurich authors surveyed 14 faith-based asset owners – admittedly a small sample set of potentially larger organizations – and found the following commonalities among them on Ethics Committees:

  • 'The committee is assigned the task of exploring set topics from an ethical and theological perspective, and is therefore responsible for providing guidelines and investment policies.'

  • 'In practice, the committee is usually in charge of setting exclusion policies on a higher level'.

  • 'When the investment team is undecided on the operationalization of certain investment policies, the ethics committee is consulted on the subject matter on an individual basis'.

  • '…it can also play a much larger role, such as leading engagement activities or developing thought leadership on certain topics'.

  • 'The members mostly have a theological and ethics background, especially when highly independent'.

The Ethics Committee typically resides in the 'decision-making process' in relationship to an established investment committee, as the University of Zurich authors mapped:


We have caveats and adjustments to most of the above from experience with a broader set of faith-based asset owners, where context is very important (organization and legal considerations, state of FCI integration, resources, etc.), and we generally disagree with their last observation about the 'backgrounds' of members on Ethics Committees.


We'll cover more at our December 7th FCI Interest Group Forum!

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