July 24th, 2020 by Andrea Bertoli
No, that’s not a title from The Onion – good news like this is REAL!
A United States-based group of Dominican nuns have partnered with Morgan Stanley to create an impact fund that allows the nuns to invest $110 million (other sources cite $130 million) and change the scope of how sustainable and positive investment is done.
How the Sisters Built a Fund Focused on Impact
According to the press release, the fund, created under Morgan Stanley’s Alternative Investment Partners Private Markets, is a globally diversified fund to address critical climate issues including global warming and pollution, depleting resources and eco-diversity, and will focus on helping lower-income and marginalized communities that are disproportionately impacted by global warming. AIP Private Markets launched its impact investing platform in 2014 in partnership with the Morgan Stanley Institute for Sustainable Investing.
As I’ve written about extensively here on CleanTechnica, finding truly sustainable investments can be pretty difficult, made more difficult if one also has concerns about social justice, gender equity, and of course, not destroying the planet or our people.
The 16 congregations of Dominican nuns began organizing in 2018 and built up $46 million; they wanted to focus on funds that addressed the UN Sustainable Development Goals, but couldn’t find a specific fund that aligned with their goals — so they created their own!
“Many Dominican congregations in the U.S. consider social justice a central tenet of practicing their faith, and [this fund] will bring social justice to the forefront of the church’s investing efforts,” writes Angely Mercado on Grist.
The nuns’ new fund will seek out investments that feature a holistic approach to climate solutions that also address other social and economic issues. As Mercado writes on Grist, this could include “early stage investments in energy efficiency software” as well as “more mature opportunities like fruit producers with water-saving hydroponic irrigation systems.”
Perhaps most interesting about the fund is that the funds are focused specifically on impact investment — not just screening. Quoted in Grist, Angelo Collins, a member of the leadership council for the Sinsinawa Dominican Sisters in Wisconsin, says, “This fund is engaged in impact investing rather than screening. The fund advisors and managers are looking to support and provide investments in corporations that are doing positive good.”
The difference is that screening simply screens out companies based on ESG concerns — many traditional ESG screens would filter out fossil fuels, tobacco, arms and other nefarious activities, but not necessarily focus on making positive changes – and this difference is crucial. In my research, I’ve found that many funds that are supposedly screened still have companies that are doing very little to improve our planet.
In contract, impact investments focus on actively doing good in the world, not just doing no harm. Specifically, according the Global Impact Investing Network (GIIN), “impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.” Note: Thanks to Amberjae Freeman, CEO of ETHO Capital, for enlightening me on the specifics of this distinction; I’m grateful for her guidance).
Living Your Faith by Fighting for Climate Action
The Pope has made some (perhaps late) strong statements about climate change, and inspired Catholic communities to rally behind climate stewardship in the name of God. As recently as June 2020, the Vatican has encouraged Catholics to divest from fossil fuels and arms – a great start in connecting the divisions between the often-juxtaposed religious communities vs. climate community.
This is not the first time global Sisters have been active in this conversation. In December 2019, BlackRock faced heat from an investment fund representing 9,000 nuns from The Sisters of Mercy of the Americas, declaring (correctly, of course) that BlackRock was failing its investors and the planet by refusing to be more active in divestment of fossil fuels from its holdings.
In recent years, many faith-based organizations across denominations have made bold statements about climate justice being a key component of their faith and stewardship of Earth and her people. Bill McKibben, a long-time environmentalist has always known of the connections between faith and environmental stewardship — even though these are often seen as opposing forces. In September 2019 he was quoted in The Washington Post: “The gospel call to love one’s neighbor is, in our time and place, most fully a call to do something about climate change,” he said, “because at the moment, we’re drowning our neighbors, sickening our neighbors, making it impossible for our neighbors to grow food.”
Whether you’re a person of faith or not, there’s never been a better time to be more engaged in climate action. Take a lesson from the Sisters: you have the power to create the sustainable future you wish to see for yourself and your neighbors.
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