FAITH-BASED investors could be doing more to align their financial investments with their values, a study published by FaithInvest suggests.

The organisation’s Good Intentions 2023 report says that just 55 per cent of the studied faith-based asset-owners had clearly stated the part played by faith in their investment policies and guidelines. Even among those who did, there was a wide range in the extent to which these principles were pursued. Of the 87 organisations assessed, 36 per cent were involved in “impact investing”, in which the intention was to generate positive social and environmental benefits, alongside a financial return.

At a meeting of investors in FaithInvest, a group that supports faith groups in investint in accordance with their beliefs, the chief executive, Dr Lorna Gold, said that faith-based asset-holders had a vital part to play in using their investments for good, considering the billions of pounds that they had under management.

“We are on the cusp of a great change, but the question in all of this is where is the moral leadership, as well as the financial leadership, coming from,” she said. “In all our investment decisions, there’s a moral risk, there’s an economic risk, and there’s an environmental risk.”

The influence that faith-based investors have is two-fold. Combined, they control billions of dollars’ worth of investment, and have been described as the “third largest economic power on earth” by Iyad Abumoghli, of the UN Environment Programme. “This economic power puts a responsibility on the shoulders of such organisations to be sustainable in their investments and their financial transactions,” he said.

But, second, as institutions seen as moral actors, what they choose to invest and disinvest in carries influence beyond their specific financial holding. It is why church groups have been urged by scientists and campaigners to disinvest from fossil-fuel companies that cause climate change, because the financial backing of churches has been used by oil and gas giants to build social respectability and wield political influence.

At the meeting last month, Mike Sturgess, who chairs the Truro diocesan board of finance, said that making such decisions could feel challenging when capacity is limited. His committee, which oversees a £39-million investment fund, is made up of six volunteers. But, he said, “We believe we need to actually back what we think, and put our money where our mouth is. We have incorporated Kingdom values into our investment policy. First, do no harm, and then do some good. The first was disinvest in fossil fuels, the second, invest in renewables.”

David Marett, the finance director (Europe) of the Society of the Holy Child Jesus, a congregation of Roman Catholic Sisters, said: “One of the frustrations that I had as finance director was that, although we wanted to talk to our investment managers about achieving social impact, nothing was written down in our investment policy. And you realise, if you don’t have things written down, you can’t hold people accountable.”