The Hindu Business Line : Faith groups to invest in social capital

IN business, a good investment is usually one that makes more money. But in April this year, 27 organisations representing seven world religions and an assortment of banks, financial advisory companies, private foundations, and charities came together to redefine `good investment'.

According to this group, a good investment is one that helps create a better world while still generating high, long-term financial returns.

And to put this definition into practice, the 27 organisations have become founding members of the world's first International Interfaith Investment Group (3iG).

The purpose is to help faith-based organisations that own assets move into socially responsible investing (SRI) that brings in high returns, both socially and financially.

Rabbi Mark Goldsmith, Member of the Executive of 3iG and Chairperson of Rabbinic Conference of Liberal Judaism, said: "We hope that in time every faith-based organisation which holds assets, be they equities or land holdings, will steward them in accord with the socially and environmentally responsible principles of their faith."

What makes 3iG special is that it is interfaith, international, and based on investment.

"It is connecting our faith life with our working life and the world of finance and recognising that business can have a greater role in people's lives than Government," he said.

The organisation already has members representing the Buddhist, Christian, Taoist, Hindu, Jewish, Muslim and Sikh faiths.

An Indian organisation called Vedic Sanatana Dharma is one of 3iG's founding members.

"We hope for as many faith-based organisations as possible in India to join us," said Rabbi Goldsmith.

The group is already in discussions with the trustees of the Parsee community in India.

3iG is also looking to its Indian members for information on issues within the country that Western faith-based organisations should know of as they determine which companies are doing business in a socially and environmentally responsible manner, he added.

The idea of 3iG was first mooted in 2000 by the Alliance of Religions and Conservation in the run-up to a major international meeting of various faith-based organisations.

The concept, which was discussed at the meeting, led to the realisation that the world's religions between them constitute one of the major investment forces of the global economy.

This power and influence, it was suggested, could be more effective if it were exercised in collaboration rather than by each faith-group acting independently.

With three levels of membership, including a category for non-faith institutions committed to SRI, 3iG offers members a range of research and advisory services on SRI.

It will also offer shareholder advocacy programmes, education and outreach services and faith-consistent investment products, according to Rabbi Goldsmith.

Perhaps the most important aspect of 3iG's operations will be the issue-based `cluster' programmes it will offer.

In the cluster approach, different members, irrespective of faith, will combine forces to invest in areas and on projects that are especially important to them.

No member of 3iG will be required to join a cluster if it is not in its own interest.

Four areas - forestry, water issues, micro finance and dignity of labour - have currently been identified for cluster initiatives.

Other themes such as alternative energy, sustainable housing, and healthcare are being considered.

Another belief at the core of 3iG's philosophy is what it calls the `cascade effect'.

According to this tenet, faith-based organisations that are members of 3iG are expected to spread the message of faith-consistent investing to their grassroots members.

This, the organisation hopes, will create a `cascade effect' by encouraging millions of people across the world to "value their investments in terms of social and environmental effects as well as raw financial return," said Rabbi Goldsmith.

In keeping with this philosophy, the organisation plans to develop guides to faith-consistent investing for grassroots members of different faiths, he added.

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