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Biblically Responsible Investing

By Dr. Gerald House

MON AUG 30, 2021


Biblically Responsible Investing (BRI) takes Environmental, Social, and Corporate Governance (ESG), to a whole new level. Not only does BRI hold corporations to ethical standards but also ensures they are adhering to Christian values. According to BRI standards, investors cannot just leave the wealth management to professional money managers without regard to the types of companies they are investing in on your behalf. BRI involves a deeper dive into the company’s products and activities. If a company produces abortion drugs, donates to Planned Parenthood, or supports the LGBT movement, then they are violating the moral principles followed by Christians (Netzly, 2018). Today, there are screening tools that can easily discover if a company is observing Christian values.

Therefore, whether you eat or drink, or whatever you do, do it all to the glory of God.

(1 Corinthians 10:31 NKJV)

The Biblically Responsible Investing Institute (BRII) has identified over 70 parameters that should concern Christians, 12 which are worrisome such as abortion, tobacco, alcohol, biotech (especially using stem cells from an aborted child), anti-family activities, contraceptives, gambling, human rights violations, pornography, low-income financial services, non-married lifestyle, and homosexual activities (The Biblically Responsible Investing Institute (2021). Brune, Files (2019), in their implementation of the student-managed investment fund of Ouachita Baptist University, discovered the difficulties, even using stock screens provided by BRII, in selecting stocks best suited for their fund that mirrored their faith and beliefs. Stock screens provide us with a great tool to begin the stock selection process; however, it is important to employ a Christian financial planner—not just a planner who is a Christian, to help align your faith and stewardship responsibilities.

Identifying a client’s investment needs is probably one of the most difficult aspects of the entire financial planning process—especially when applying God’s plan for your financial well-being. God wants us to live prosperously, but we must use his playbook, the Bible if we want to receive his blessings. Not only do we need to screen our investments for ethical and moral principles using Biblical standards, but the investments should also complement a client’s risk tolerance and adhere to the adopted financial plan. An investment plan should also identify when enough money is accumulated for our needs and when to distribute excess to charity.

Responsible investing means accepting responsibility for the way you invest your money. Only invest in good companies that mirror your values. You should be proud of your investments. Do not chase the hot stock hoping to gain a few cents and compromise your moral turpitude. Additionally, you must feel comfortable with your investments. Know your risk factors and what acceptable investments to add to your stock portfolio.

Several stock screenings tools are available that will filter out companies who do not share your values. The process of screening stocks in this manner is more time-consuming but investors should feel a moral obligation to honor their values and forgo investing in companies that will not complement their investment portfolio—even if it means giving up a few pennies in yield. For Christian investors following the principle of stewardship, this additional due diligence is obligatory. God calls us to be good stewards of our time, talents, and treasures.

For where your treasure is, there your heart will be also (Mathew 6:21, Luke 12:34)

Therefore, do not let money drive your investment decisions, honor God with your treasures by omitting investment opportunities that run contrary to his wishes. Do not invest money in companies that exploit people by enslaving them to work for the government or by paying a menial wage less than basic subsistence. Additionally, omit companies that donate to Planned Parenthood in support of pro-choice initiatives. A good Christian financial planner can easily screen these stocks on your behalf and only recommend investments that complement your values.

Most people have no clue what stocks they are invested in through their company’s 401k program, or for that matter, their IRAs. Many popular companies donate thousands of dollars each year to planned parenthood and the ordinary investor has no idea of this activity. If you would not donate personally to planned parenthood, why would you allow your money to be invested in companies that do? Unfortunately, many advisors select stocks and investment mutual funds for their clients based on previous experience with the products or their recent performance. Screening stocks for ESG or BRI is not common practice. However, when investors are informed of the activities of their chosen stocks or funds, they are surprised that their advisor placed their money in these companies. Truthfully, it is the investor’s responsibility to inform the advisor of their personal preferences, which often does not happen.

Christians are specifically affected by investing in what is called sin stocks. These are companies that do not hold the same beliefs as Christians—their practices may involve selling abortive medicine or slave labor standards in foreign countries. By using ethical screening programs, we can eliminate many of these sin stocks from our portfolio. However, what if an investor is heavily invested in mutual funds that invest and divest in many stock companies throughout the year? These mutual fund managers may be ethical one year and unethical the next. It is only through continued monitoring that investors will uncover these behaviors. This is a time-consuming event. Conversely, investors could stick with individual stocks but how many investors have the time or knowledge to sift through the maze of stocks and properly diversify their portfolio? A good Christian financial advisor can be a source of great comfort in this area by constantly monitoring your investment portfolio to ensure proper alignment with your preferences.

References

Brune, C., Files, J. (2019). Biblical Screens and the Stock Selection Process: Applications for a Student-Managed Fund, CBAR, 87-90. Retrieved from https://cbfa-cbar.org/

Netzly, R. (2018). Biblically responsible investing. Hollister, CA: Inspire Press.

The Biblically Responsible Investing Institute (2021). Retrieved April 10, 2021, from https://www.briinstitute.com/

The Holy Bible: NKJV New King James Version. (2016). Nashville, Tennessee: Holman Bible.

Investment and advisory services offered through Herrington Financial Services, Inc., a Registered Investment Advisory (RIA) firm. The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. This site is for educational purposes only.