Investing for the Global Good

The Sisters of the Holy Cross are in the business of looking ahead. Summoned by Gospel calls and the hope they extend, the sisters recognize the greater potential of promoting justice and advancing the common good. Not surprisingly, their investment practices also hinge on this long view of building a better world through right relationships.

Over the last 20 years, the Congregation has amped up its practices of sustainable investing, which emphasizes achieving long-term financial gains with sustainable outcomes. This investment practice includes three key components: Socially Responsible Investing (SRI), Environmental, Social and Governance (ESG) investing, and impact investing.

Weaving ethical concerns and SRI practices into their investment process, the Congregation doesn’t support companies that produce tobacco products, weapons and pornography, for instance. But effective SRI requires more than just weeding out what isn’t wanted. The Catholic Church, and the United States Conference of Catholic Bishops, specifically, have shared guidelines for socially responsible investment that rest on common Catholic values, such as protecting life, promoting human dignity, and pursuing a common good.

ESG, raising the bar

These and other considerations help determine the sisters’ impact investing — that is, where and how they commit their capital to support their values-based priorities. When it comes to investing for the global good, impact investing has become increasingly important for the Holy Cross sisters and other religious communities whose intent is to generate positive social and environmental impacts. Such investments are made with the expectation of an appropriate financial return. But the company is expected to measure and report on the social and environmental performance as well. Naturally, investing for the global good “is more demanding,” says Sister Suzanne Brennan, CSC, general councilor and treasurer for the Congregation, “because it’s not just about money.”

And as most sustainable investors, the Congregation examines how companies address ESG factors in their operations and where they display risks. Evaluation areas vary by industry, but common metrics include greenhouse gas emissions, biodiversity, pollution and workplace conditions. Examples of ESG practices might include reducing emissions by implementing clean energy or creating economic opportunities for underrepresented individuals and communities.

As a measure of sound governance, an investor would expect a company’s board to reflect a diverse membership. “When we interview companies, sometimes all the representatives are men,” Sister Suzanne says. “So we’ll ask, ‘Do you have any women on the board? How many women do you employ? Because we don’t see any here.’ And so you bring that to their attention. Then I’ll ask, ‘How many of you have daughters you would want to be in this room?’” The sisters evaluate these and numerous other factors when considering where to invest. What’s more, they apply these same measures to their operations and those of their sponsored ministries.

Sustainability pays off

“For us, a good investment is a company that employs people, develops them, and helps them with needs they may have. It should also yield a reasonable return,” Sister Suzanne says. The sisters’ partnership with a company developing crop farms in Mórrope, Peru, has proven profitable for a community and the Congregation.

Not only did the company bring sustainable economic opportunity to the region, it also met other needs by building a town around the farms, opening health clinics in the area, and ensuring fair compensation for employees. And as part of the original investment agreement, Holy Cross Sisters Patricia Dieringer and Mary Josephine Delany — who minister in Peru and have experience addressing domestic violence and alcohol use disorder — provided education and pastoral care for employees and a local parish.

Accountable to national and international regulations and standards, the company shares an annual sustainability report. The report’s spotlights include how the company is aligning with the United Nations Sustainable Development Goals, managing ESG risks, and incorporating principles of sustainable agriculture. Currently, the farms utilize drip irrigation systems, renewable energy resources, pest screens instead of insecticides, and no-till farming techniques to limit carbon emissions, which are a key driver of climate change.

Investing for a voice

Another investment tactic the sisters employ is advocacy investing. That’s buying just enough stock to guarantee a voice in how a company operates. Basically, the Congregation advocates through stakeholder engagement and shareholder resolutions. This is achieved by writing letters to organizations and submitting and supporting shareholder resolutions as agenda items for organizations’ annual shareholders meetings. Often, multiple congregations and like-minded entities come together to influence company practices or policies they deem unjust or that put people and the planet at risk.

After the deadly 2009 collapse of the Rana Plaza garment factory in Savar, Dhaka, Bangladesh, the sisters demonstrated the effectiveness of investing for a global good. They and other members of the Interfaith Center on Corporate Responsibility used their investments to demand change in the garment industry. As a result of such pressure, trade unions signed and implemented the Accord on Fire and Building Safety in Bangladesh to both protect and empower garment workers.

Holy Cross collaboration

Similarly, the Holy Cross sisters pool their interests with the Holy Cross priests and brothers and other Catholic institutions, using their collective advocacy to influence change. “We discontinued investing in fossil fuels a couple of years ago,” Sister Suzanne says. “That hurt us at first, but not now. It’s helped.”

Her comment echoes recent statistics that show renewable energy investment returns were seven times higher than fossil fuels investments from 2011 to 2021. While those trends will cycle like any market, the opportunities in green energies are now much more commonplace — if not preferred. Energy companies are now also ranked on what is called the energy return on investment, or EROI. This gives an investor a way to understand how effectively their dollars are turned into usable energy — another way to assess investment opportunities.

Combined, sustainable investing practices have generated far more than monetary returns for the Congregation, though those are solid too. For the Congregation and its investment advisory team, managing this money is ministry. “It’s our responsibility to have an appropriate financial return,” says Sister Suzanne, “because that’s what allows us to encourage and promote and sustain our mission.” Ultimately, sustainable investing helps the Holy Cross sisters spread their witness of God’s love for all creation — far and beyond what they can see.