{"id":29256,"date":"2025-06-25T10:25:00","date_gmt":"2025-06-25T15:25:00","guid":{"rendered":"https:\/\/cbisonline.com\/us\/?p=29256"},"modified":"2025-09-11T10:56:12","modified_gmt":"2025-09-11T15:56:12","slug":"theres-no-c-in-esg","status":"publish","type":"post","link":"https:\/\/cbisonline.com\/us\/theres-no-c-in-esg\/","title":{"rendered":"There’s No “C” in “ESG”"},"content":{"rendered":"\n

View the paper<\/a><\/p>\n\n\n\n

There’s More to Catholic Responsible Investments Than Environmental, Social, and Governance Scoring<\/h2>\n\n\n\n

A half century ago, Milton Friedman posited the idea that the primary responsibility of a business is returning value to shareholders. It\u2019s been said that his \u201cGreed is Good\u201d suggestion was responsible for much of the corporate world\u2019s subsequent focus on \u201ccreating\u201d shareholder value.<\/p>\n\n\n\n

But in his work, the great economist spoke to more than a singular commitment to maximizing profits. Indeed, the Friedman Doctrine in full context proposed that a company\u2019s highest calling was to not only make money, but to do so, \u201cwhile conforming to the basic rules of society, both those embodied in law and those embodied in ethical custom.\u201d<\/p>\n\n\n\n

It\u2019s easy to see how society\u2019s definition of ethical custom has evolved over the last 50 years. Today, there are companies embracing socially responsible principles as a normal part of business while society as a whole has come to be very concerned with a corporation\u2019s various impacts.<\/p>\n\n\n\n

A Push in Product<\/h2>\n\n\n\n

As part of this evolution, Wall Street product manufacturers have responded with an abundance of so called \u201cethical\u201d investments, including socially responsible investing (SRI) funds and environment, social, and governance (ESG) strategies.<\/p>\n\n\n\n

Based on the increasing demand for sustainable investing funds and ETFs, reports indicate that ESG assets alone may account for a third of global AUM by 2025.<\/p>\n\n\n\n

As professional investors, we believe the growth in responsible investments is mostly a good thing. As a Catholic money manager, however, we can say that those looking to align their investments with Church values will not get there through an ESG fund. Here\u2019s why.<\/p>\n\n\n\n

Valuation Versus Values<\/h2>\n\n\n\n

Beyond Friedman\u2019s notion of maximizing return on investment to benefit shareholders, the ESG framework also evaluates companies based on environmental, social, and governance metrics. The typical process ranks companies based on an assessment of certain non-financial risks and assigns each business an ESG score. The ESG fund manager then employs this \u201cvaluation\u201d in his or her buying and selling decisions. ESG practices may also entail screening out companies or sectors that have shown poor performance with regard to management of ESG risks and opportunities.<\/p>\n\n\n\n

No one will argue that ESG issues can pose serious risks to a company\u2019s operations and profits. Or that companies actively working to address these risks should see fewer business disruptions and potentially produce more reliable financial results over time.<\/p>\n\n\n\n

We might even suggest that good fundamental analysts have always incorporated most of these factors into their investment decision-making. In the end, though, any alignment between the ESG process and an investor’s values is coincidental.<\/p>\n\n\n\n

Catholic Responsible Investing (CRI<\/a>), on the other hand, is based on values. The strategy combines a high-conviction investment process with a comprehensive approach to screening and active engagement with portfolio companies. Investors may earn competitive financial returns while confidently remaining in alignment with the teachings of the Catholic Church. In practice, CRI includes<\/p>\n\n\n\n

1) Screening to help Catholic investors<\/a> avoid exposure to company activities that violate Church teachings<\/p>\n\n\n\n

2) Active Ownership<\/a> to work on behalf of investors towards transforming portfolio companies\u2019 policies and practices to build strong communities and protect the environment. We will also work with select companies we view as having potential for improvement.<\/p>\n\n\n\n

There is an intentionality around CRI that simply does not exist in ESG.<\/p>\n\n\n\n

Bottom Line<\/h2>\n\n\n\n

While there\u2019s bound to be overlap among ESG and CRI strategies, there are significant and important differences in their outcomes. We believe, for devoted Catholics looking to incorporate their faith into their investments, the CRI approach is positioned to meet their financial need<\/a>s in a uniquely Catholic way.<\/p>\n\n\n\n

Important Information<\/h3>\n\n\n\n

All material of opinion reflects the judgement of Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services.<\/p>\n\n\n\n

Catholic Responsible Investment (CRI) is an investment strategy designed specifically to help investors seek sound financial returns while remaining faithful to the teaching of the Roman Catholic Church. The Fund considers the Adviser\u2019s CRI criteria in its investment process and may choose not to purchase, or may sell, including at inopportune times which would result in losses to the Fund, otherwise profitable investment in companies which have been identified as being in conflict with the Adviser\u2019s CRI criteria. Funds may underperform other similar funds that do not consider CRI guidelines when making decision.<\/p>\n\n\n\n

View the paper<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

View the paper There’s More to Catholic Responsible Investments Than Environmental, Social, and Governance Scoring A half century ago, Milton Friedman posited the idea that the primary responsibility of a business is returning value to shareholders. It\u2019s been said that his \u201cGreed is Good\u201d suggestion was responsible for much of the corporate world\u2019s subsequent focus […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[92],"tags":[],"class_list":["post-29256","post","type-post","status-publish","format-standard","hentry","category-insights"],"acf":[],"yoast_head":"\nThere's No "C" in "ESG" | CBIS | Catholic Socially Responsible Investment Solutions<\/title>\n<meta name=\"description\" content=\"There's more to Catholic Responsible Investments than environmental, social, and governance scoring.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cbisonline.com\/us\/theres-no-c-in-esg\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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