Aligning Portfolios with Christian and Other Religious Values
We understand the challenges of finding investments that align with the religious values of faith-based investors. These challenges become even more profound when organizations seek to create balanced portfolios and find investors that understand and can adhere to religious guidelines. At Riverwater, we’re on a mission to bridge that gap and make it easier to honor your faith while driving purposeful financial growth.
The Intersection of Faith and Finance
Faith-driven investing combines the principles of ethical investment with the values rooted in religious teachings, a practice that resonates with the 67% of global asset owners who see responsible investing factors as increasingly material to their strategies. For many investors, aligning their financial decisions with their faith is not just important—it’s essential. This growing demand for values-based investing reflects a broader trend of integrating ethical principles into financial decision-making.
— Stephen Grabill, Acton Institute
Why Faith-Driven Investing Matters
According to the Morningstar Voice of the Asset Owner Survey, every surveyed asset owner allocates at least a portion of their assets to values-focused strategies, showcasing the mainstream adoption of values-based investing. Whether it's the Catholic mandate emphasizing human dignity and care for creation, or other faiths advocating ethical stewardship and fairness, faith-driven investing provides a way to ensure your money works in alignment with your beliefs. Beyond avoiding harm, faith-based investors also aim to promote positive change, supporting companies that reflect principles of compassion, justice, and sustainability.
The Catholic Mandate in Investing
For clients adhering to the Catholic Mandate, Riverwater Partners follows the principles outlined in the U.S. Conference of Catholic Bishops (USCCB) Investment Guidelines, ensuring that investment strategies adhere to Catholic moral teachings. These principles emphasize that revenue should not be gained through unjust means, at the expense of human life, or in ways that degrade human dignity or the environment. Key strategies include avoiding investments in industries such as tobacco and pornography. We also actively engage with corporate leadership to promote ethical practices, and invest in companies that align with Catholic values of human dignity, environmental stewardship, and social responsibility.
Riverwater’s Approach to Faith-Driven Investing
Riverwater’s investment process begins with understanding each client’s unique priorities, whether rooted in Christian social teaching or other faith-based mandates. Our proprietary responsible investment scoring system evaluates companies on ethical, environmental, and social criteria, allowing us to select investments that reflect our clients’ beliefs.
Case Studies: Faith in Action
Examples of how Riverwater investee companies' actions align with faith-based values include:
Environmental Stewardship and Innovation – Ciena (CIEN)
Ciena’s photonics technology provides the lowest cost, lowest power, and lowest latency solution for moving data in networks. Over the past decade, while increasing fiber capacity by 35X, Ciena’s equipment has achieved a 25-30% annualized cost and power/bit reduction and avoided over 5.5 million tons of CO2 emissions.
Teachings on Care for Creation – ICF International (ICF)
ICF International’s CO2SIGHT tool helps electric utilities explore decarbonization scenarios to achieve climate and clean energy goals. ICF has modeled a path for the United States to eliminate more than 40% of greenhouse gas emissions by 2030 and nearly 90% by 2050 relative to 2005 levels.
Values of Human Dignity and Care for Community – Farmer Mac (AGM)
Farmer Mac has funded loans to over 86,000 rural borrowers across all 50 states, providing more than $90 billion in investments in rural America. This includes loans for land purchases, working capital, clean energy installations, and broadband access—all aimed at driving resilience in American farmers, their families, and their communities. Supporting sustainable rural development directly reflects Catholic values of human dignity and care for the community.
These case studies demonstrate how Riverwater's approach to faith-driven investing can have a positive impact on the environment and communities, in line with Catholic principles of environmental stewardship and care for the common good.
The Broader Impact of Faith-Based Investing
Faith-driven investing doesn’t just reflect individual values; it creates a ripple effect of positive change. By directing capital toward companies that prioritize social good, faith-based investors contribute to sustainable development, stronger communities, and a more just world. This aligns seamlessly with Riverwater’s theme of leading with purpose, empowering clients to make meaningful change while achieving their financial goals. This approach is increasingly supported by performance data as well.
The S&P 500 Catholic Values Index has performed generally in line with the broader S&P 500 annually over the past 10 years (S&P Dow Jones Indices, 2024). Additionally, according to Morningstar data, the 15 largest faith-based funds typically show strong performance records, with most earning Morningstar Ratings of 3 stars or higher, which suggests a favorable risk/reward profile within their categories.
This performance contradicts the outdated belief that values-based investing necessarily means sacrificing returns. Instead, the data suggests that companies operating in alignment with religious values often demonstrate stronger risk management and long-term resilience.
A Call to Faithful Stewardship
At the integration of faith and finance, investors have the opportunity to ensure their portfolios reflect their deepest values. At Riverwater Partners, we believe that financial stewardship is a sacred responsibility that can honor one’s faith while building a more just and sustainable world for future generations.
