Faith-Based Investing: Understanding the Impact and Approaches

For many people of faith, aligning our investments with our values isn’t just a preference — it’s an extension of living out our beliefs in every area of life.

Faith-based investing invites us to consider not only how we grow wealth but why and to what end. It challenges the notion that investing is morally neutral, offering a more integrated, purposeful view of what it means to steward resources.

Here, we’ll explore two key ideas:

1. The impact of investing.
2. Three approaches to faith-based investing — Avoid, Embrace, and Engage — with examples of each.

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The Impact of Investing

It’s easy to think of investing purely in financial terms like stocks, bonds, returns, and risks. But underneath every investment is a real-world impact. When we invest, we’re allocating capital toward businesses, industries, and innovations that shape the world we live in.

Capital fuels human creativity. It empowers companies to grow, hire, and bring products and services into the world. It also influences corporate decision-making. Companies notice who their investors are and what they care about. In this way, investors aren’t just passive participants in the market; they are active contributors to the kind of economy — and society — that is being built.

For people of faith, this perspective adds a layer of responsibility. Investing becomes not only about financial return, but multiple bottom lines based on values. It’s an opportunity to steward resources in a way that seeks both to grow financial capital and to promote human flourishing, dignity, and goodness in the marketplace.

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Three Approaches to Faith-Based Investing

Faith-based investing strategies typically fall into three broad categories: Avoid, Embrace, and Engage. Each approach reflects a different way of thinking about the relationship between faith, values, and capital.

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1. Avoid

The Avoid approach focuses on screening out investments that conflict with core faith values. This typically means excluding companies involved in industries like:
• Abortion and related products
• Pornography and adult entertainment
• Gambling
• Tobacco

This approach is often called negative screening or values-based exclusion. The logic is simple: We don’t want to profit from activities that undermine human dignity or contradict our beliefs.

Example:
An investment fund that excludes all companies generating more than 5 percent of their revenue from gambling operations.

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2. Embrace

The Embrace approach goes beyond avoiding harm and focuses on intentionally investing in companies with positive values that actively contribute to good.

This is often called positive screening or impact investing. Investors look for companies that:
• Treat employees fairly and foster a healthy corporate culture
• Create products that meet real human needs
• Promote environmental stewardship (creation care)
• Reach underserved populations
• Operate with transparency and integrity

Examples:
Investing in a healthcare company that provides life-saving treatments to low-income communities, or a technology company pioneering ethical artificial intelligence.
For investors also pursuing spiritual returns, investments in businesses that integrate evangelism or discipleship.

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3. Engage

The Engage approach involves maintaining investments in companies that may not align perfectly with faith values — but working to influence the companies for the better through shareholder advocacy, dialogue, and voting.

This strategy is sometimes called stewardship investing or active ownership. Rather than divesting at the first sign of conflict, investors stay involved and push for change, advocating for:
• Ethical labor practices
• Protection of human rights
• Corporate governance reforms
• Better environmental stewardship
• Respect for religious freedom and diversity

Example:
An investment manager that owns shares in a large multinational company and uses shareholder rights to advocate for stronger anti-human trafficking measures in the company’s supply chain.

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What Does Faith-Based Investing Mean for You?

Faith-based investing goes beyond financial returns; it’s about using our financial resources to live out our values and convictions.

Whether you are called to avoid, embrace, engage, or some combination of all three, the key is intentionality. You recognize that every investment decision is also a choice about what kind of world you are helping to create.

When we invest thoughtfully, with our faith and values integrated into the process, we turn investing into an application of stewardship, a tool for impact, and visionary action for the world we want to see.

If you’re interested in exploring faith-based investing further, let’s talk.

EverSource Wealth Advisors Knoxville
Jim Darlington
865-302-9200

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_{The information provided is for informational purposes only, is general in nature and does not take your personal circumstances into consideration. This information does not constitute an invitation, solicitation or offer that you purchase, sell, or hold any security or other investment or pursue any investment style or strategy. It is not intended to be a substitute for specific, individualized financial advice and investors should obtain tax and/or legal advice from a qualified tax professional and/or attorney.}

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