Ethical and Spiritual Considerations (ESG) in Investment Decisions for the Swedenborgian Church of North America (SCNA)
By Paul Martin and Holly Gottschalk
What is ESG?
ESG refers to a wide variety of criteria that is used by socially responsible investors to look at environmental, social, and governance practices in the companies in which they invest. Environmental concerns would include how the company impacts the environment, for instance whether it contributes to climate change. Social concerns would include, among other things, how they treat their employees, for instance whether they have a diverse work force with fair wages and safe working conditions. It could also include what they produce and how that impacts society, such as armaments, alcohol, tobacco, unhealthy foods, for-profit prisons, or gambling opportunities. Governance would include things like whether their governing board is diverse with respect to racial, gender, and other criteria. Governance also tracks whether a company prioritizes that its operations are meeting ethical, legal, and regulatory standards.
ESG is often referred to as what you do with the other 95% of your assets because organizations typically spend about 5% of their assets each year and invest the other 95%. It doesn’t make sense to spend 5% trying to make the world a better place while investing 95% in companies that are damaging the world.
ESG and the Common Fund
For the past two years, the Common Fund Investment Committee has looked at whether ESG should be taken into consideration in investment decisions. More investors, especially religious organizations and non-profit organizations, are taking ESG into account in their decision making, and we wanted to know whether we should as well.
Since the Common Fund has many investing partners—primarily Swedenborgian Societies, Associations, and the Theological School—our first step was taking a survey of our investors to see what their desires were. A vast majority of our investing bodies reported that they did think it was appropriate to take ESG into consideration when making investment decisions. Our survey indicated that many of our investors would even be willing to risk a little less in return in order to take these factors into consideration.
We also asked our investing partners which ESG factors were most important to them. The survey showed the highest priorities were: Environment, specifically climate change, Governance, specifically the ethics of the company, and Social, specifically offering fair wages and safe working conditions.
We then looked at how investments that do take ESG into account perform in relation to those that do not. There appeared to be little, if any, difference in expected return. In fact, there may be reason to believe that companies that are socially responsible should perform better in the future, as more people want to support such companies.
After careful study and deliberation, the Investment Committee voted at a special meeting in January 2024, to include ESG in our updated Investment Policy Statement (IPS). That same month, we invested 3.4% of our assets with ESG friendly funds. In the short life of our holding these funds, we find that they are performing similarly to their benchmarks. This is a trial period, and we intend to continue to consider and monitor ESG investments in our future investment decisions.
Rev. Paul Martin and Holly Gottschalk are appointed members serving a term on the Investment Committee of the Swedenborgian Church of North America.
Read the full issue of the Winter 2025 Messenger
Holly Gottschalk is a former professional dancer and choreographer who flipped the sides of her brain in retirement and is now a part-time bookkeeper, including Hillside, the Garden Church and Feed and be Fed among her clients. She lives in San Rafael, California, with her husband Peter. Holly enjoys attending services at the Hillside Sanctuary, moonlights as a Venue Coordinator for weddings at the San Francisco Swedenborgian Church, and serves on the Investment Committee.
Rev. Paul Martin is the former pastor of the Swedenborgian Spiritual Community of the Puget Sound, and founder and manager of the Mosswood Hollow Retreat Center.
