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Major new alliance of religious investment funds creating a better and fairer world

Friday, 01 Dec 2017

Tags: faith investing esg investing

 

 

Major new alliance of religious investment funds creating a better and fairer world

November 2, 2017:
Launch of the Zug Guidelines to Faith-consistent Investing. Photo ARC: Mike Shackleton

ZUG, SWITZERLAND: November 2, 2017: A global movement aimed at shifting billions of dollars of faith-based investments into initiatives supporting sustainable development and the environment has been launched following a unique three-day meeting of faith leaders and financial investors in Zug, Switzerland. 

By unanimous agreement among participants at the Zug Faith in Finance meeting, an alliance will be created to spearhead this movement and develop faith-consistent investment goals. Participants included more than 30 different faith traditions from eight religions, representing over 500 faith investment groups and trillions of dollars in assets, as well as senior United Nations figures and leading impact investment funds. 

“It will enable faith groups to share information, experience, knowledge, research and resources to ensure they put their investments and assets into initiatives to help create a better world for all. This initiative is backed by the UN and by many traditions within the religions,” said Martin Palmer, Secretary General of the Alliance of Religions and Conservation (ARC), which organised the meeting. 

“The new alliance – so new it hasn’t even got a name yet – will develop a faith response to the challenge of the UN’s Sustainable Development Goals,” he said. 

The alliance marks a huge shift from the tradition of religion saying, for ethical reasons, what they won’t invest in (for example, tobacco, weapons, pornography, fossil fuels) to a proactive policy of ensuring faith assets and investments will have a positive “faith-consistent” impact – making money work for good, while still bringing in the returns that faiths need to fund their activities. 

 
The Faith in Finance meeting launched the Zug Guidelines to Faith-Consistent Investing with a dramatic procession through the medieval city of Zug, and in partnership with the Swiss Impact Investment Association. 

This, the first collection of guidelines by eight major faiths, gives an unprecedented overview of where religious investment is placed now. It highlights what principles each tradition calls upon when it decides its investment priorities, and in many cases makes a statement that a good proportion of the money should where possible be invested in environmental and sustainable development. 

Palmer said: “The long-term impact will be to empower faith groups – and the billions of people who make up their congregations – to decide how to use their investments, their pension funds and their assets to create a better world, one that as Cardinal Turkson says, responds to two cries, the cry of the poor and the cry of creation.” 

Cardinal Peter Turkson , who was recently asked by the Pope to head up a powerful new agency in the Vatican with the task of “promoting integral human development”, flew from Rome to attend the meeting. 

 
He said that when in 1993 he was appointed Archbishop of Cape Coast in Ghana he looked at how many of the churches were funded – by donations and grants, which were not only decreasing, as missionary organisations decreased, but which was also a very unequal model. 

He realised then there had to be a new form of access to capital for churches to support their own activities, and he set about campaigning and acting to bring this about. 

“I brought that experience in Ghana then to what I do in the Vatican now,” he said. “And I believe very much in education of people in how to invest money, and in how to make informed choices so what you invest in is something good.” 

There are many trillions of dollars of investment funds owned by the faiths around the world. In 2016 a Georgetown University study suggested that the value of religious goods and services in the US was around 1.2 trillion and that the household incomes of religiously affiliated Americans was around $4.8 trillion. The global figure will be many times greater. 

“We have known for some time what the faiths were against in their investments,” Palmer said. “But now we – and they – have a much better idea of what they are for.” 

The new alliance has been welcomed by the United Nations. Opening the Faith in Finance meeting, Elliott Harris, UN Assistant Secretary-General, UN Environment Programme, said: “The governments have made a public political commitment to the sustainable development goals and we now have to hold them accountable to that. But we realize that this agenda is far too complicated to leave up to the governments. They cannot do it alone. 

“Your Zug Guidelines to Faith-Consistent Investing set out what the faith-based organisations are for, as contrasted with what they are against, how your values translate into value-based investment decisions. I encourage you all to work with us and we with you to make this sustainable agenda a reality. That, I think will be one of the great achievements of this generation.” 

No sooner were the guidelines launched on October 31 than several key faith groups from Europe and Asia requested that they join the movement and create their own investment guidelines.

LINKS

More background, presentations and talks as well as the pdf version of the Zug Guidelines are available from the Zug event page

Link to photographs from the event

Background

Much of the good works (schools, hospitals, care centres, poverty alleviation programmes etc) of any religion is funded by the faith’s investment programme. 

There has always been a level of negative screening – many religions are clear what they will not invest in, which sometimes includes alcohol, weapons, tobacco, and more recently fossil fuels: faiths won’t invest in “bad” industries. Every year for the past 20 years this movement has been gaining momentum, and religious organisations have also used their role as shareholders to push for and publicise change. 

But now, many religious investment departments are taking a further path. Instead of just saying what they are against, dozens of faith finance groups are now saying what they WILL invest in, in order to make the world a better place and align their money with their values. 

The meeting was held in collaboration with the Swiss Impact Investment Association (SIIA) annual summit. SIIA have already asked to join the alliance and offered to host an annual faith in finance programme at their summit. 

It took place at the beautiful Lasalle Haus Jesuit Centre in the hills outside Zug, eastern Switzerland. 

Notes to editor: ARC is a secular body founded in 1995 by HRH Prince Philip that helps the major religions of the world to develop their own environmental programmes, based on their own core teachings, beliefs and practices. It is the main partner for the UN in working with the faiths on the SDGs. www.arcworld.org. 

It is sponsored by the Charles Stewart Mott Foundation, the Pilkington Foundation and WWF-UK as well as Earth Capital Partners, Hermes Investment Management, Linius Capital, Rathbone Greenbank Investments, Resilience Brokers, Sarasin & Partners, Tribe Impact Capital, Triodos Investment Management, WHEB. 

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Turning Green into Gold

TBLI NORDIC CONFERENCE 2016 will be held in Stockholm at Nasdaq on Sept. 20-21.

We are thrilled that Arvind Narula has agreed to be a keynote speakers. Arvind is an extremely successful entrepreneur who has shown great leadership in developing sustainable agriculture, social enterprise and Impact Investing in Asia.

Here is a recent article about Arvind Narula published in Masala in Thailand.

Turning Green into Gold    

ARvind

For Arvind Narula, building an organic agricultural empire is just one of a list of amazing lifetime accomplishments. By Bruce Scott Published in Masalathai 
If you peruse the aisles of certain grocery stores here in Bangkok — Tops Supermarket and Villa Market for example — then you’ve probably seen Hilltribe Organics free range eggs for sale. However, what you may not know is that this burgeoning business is just one of the many healthy food retail product lines that have sprung forth from the Bangkok- based company known as Urmatt Ltd. And the man behind this enormously successful enterprise is Arvind Narula, who manages to masterfully balance business savvy with social responsibility.
 
For Arvind, going green was in no way a case of simply jumping on the organic bandwagon to cash in on a popular trend. His agricultural operations have been organic for a long, long time. His business model is similarly progressive, and puts a decided emphasis on Corporate Social Responsibility (CSR). A large part of this is ensuring that the farmers who work for him are earning a good wage and not exposing themselves to dangerous chemicals. In turn, this business model has proven so successful that Arvind is now spearheading similar agricultural projects in South America, Africa, and even right next door in Laos, at the invitation of the Laotian government. Operating in such a wide-ranging cosmopolitan milieu comes easily to Arvind, who speaks seven languages and conducts business all over world.
 
He was born in Bangkok, but had moved around extensively by the time he was in his early 20s. “I went to school in Thailand, Singapore, and India,” he recalls, “and then after high school I didn’t think I needed college, so I worked for a year in Japan. Then I came back to Thailand to work for my dad. He had a trading company largely dealing in chemicals, and steel and cement. While on a business trip to Germany a friend of mine took me to see a college in Heidelberg — Schiller International University— at which point it occurred to me that I wasn’t really that smart.”
He enrolled in Schiller soon after and that’s where he met his wife Karen, a German-American. A year later they decided to move together to Paris, where both of them graduated from Schiller International University’s Paris campus with bachelors degrees in business, before moving on to do pursue their Masters in socio-economics at the École pratique des hautes études, also in Paris. During this time period he and Karen embarked on some wonderful, and occasionally frightening, road trip odysseys. “In 1974 we bought a Volkswagen bus and drove from Germany to Agra, in India,” Arvind recounts. “Our route went through Greece, Turkey, Iran, Afghanistan, and Pakistan. The next year we did it again, this time in a VW Beetle that we drove to Tehran. There were lots of adventures. On the first trip someone tried to buy Karen from me at the Khyber Pass, and on the second trip we were held up in Turkey by Turkish soldiers— this was right after the Cypriot war. I sat for 15 minutes with an M16 to my head.” 

 

However those youthful days of heady adventure came to an end around 1976 when Arvind was called back to Thailand. “I wanted to continue my studies,” he explains, “but my dad ran into some financial trouble and asked me to come back to help. I said I’d come back for two years, but I stayed.” He eventually helped save his father’s company, and he and his wife went on to start other businesses as well — in fact it was his wife who originally opened the Moghul Room on Sukhumvit Soi 11 (although it long ago changed ownership).
 
Arvind’s career in agriculture didn’t begin till around 1982. It was then, while on a trip to India, that he noticed basmati rice for the first time. Upon returning to Thailand he, together with some foreign partners, decided to farm this type of rice themselves. So he acquired some basmati seed, rented a piece of land in Chiang Mai, rented a buffalo, and started plowing. His success was swift and within two years the company became the only commercially viable basmati rice producers outside the Indian subcontinent. In fact, by the 1990s they were employing thousands of families throughout the north of Chiang Mai and Chiang Rai. Unfortunately the 1997 Asian financial crisis wiped them out. “We lost millions of dollars overnight,” Arvind admits. “We had others businesses too, and we all decided to close everything down, and dissolve the partnership. Everybody went their own way, and I kept the agriculture business.” He worked to keep that rice business going, and although it had already begun going green, the decision to go 100 percent organic was motivated by a singular, life-changing incident.
 
“We owned three or four thousand rai of farmland in Chiang Rai,” he explains. “I was out there one day and saw a farmer with an insecticide spray backpack, and a baby in his front pack. And he was spraying! I had seen that there were children in the area being born with defects, but when I saw this guy with the sprayer it changed my life. I thought ‘I don’t want to do this anymore’. So I started to learn about going organic. We lost money for the next seven years, but I stayed the course, knowing that I didn’t want to use chemicals anymore. Eventually it took off and we’ve never looked back.” The company was christened Urmatt around 1999 — named after a favourite village in Alsace — and it has gone on to become one of the largest suppliers of organic jasmine rice in the world, almost all of which is exported in bulk for repackaging overseas. “A lot of the Thai jasmine rice you find in Whole Foods [in the USA] is from our farms,” explains Gaurav Sehgal, Arvind’s nephew and Urmatt’s current Director of Sales. Gaurav goes on to talk about how over the past few years the company has started launching several retail-ready organic products.
 
It began with the Hilltribe Organic eggs, but has since gone on to include chia seeds, rice bran supplement, pasta, and even coconut water, their latest product. “We do retail, but we also sell to hotels, and restaurants,” he adds. “Robuchon, Nahm, Bo.Lan, Rocket, Bad Motel — they all use our eggs.” And indeed it’s these humble eggs that really underscore what a difference Arvind’s conscientious CSR has made to these poor farmers. Hilltribe Organics gives each family that signs up a total of 600 hens — all free of charge — as well as everything needed to set up a full-running business, including organic feed (also supplied at no extra charge). The company then buys back all the eggs from the farmers, thus guaranteeing their income. For the farmers it sounded too good to be true at first, but one family tried it and within a few months there were 200 more families signing up for the program. The average income per family has tripled, but more importantly lives have been changed for the better. In a touching show of gratitude one of the farmers came up to Arvind, held his hand, and said, “I really want to thank you. Because of all you’ve done, my daughter doesn’t have to work at night anymore.” These same business models that Arvind pioneered are now being exported to other countries. Laos is the latest recipient, but similar large-scale organic farming projects have been undertaken worldwide. The project in Argentina has been a resounding success, but the African venture has encountered some grave setbacks.
 
“We have a project in Sierra Leone, the poorest of the 179 poorest countries,” he says. “They eat rice three times a day, but they need help to be able to achieve higher yields. We got a good start there, but then Ebola hit. The entire thing collapsed, but we are restarting again. It’s a huge challenge but that’s precisely why we want to do it.” So, having reached 65 years of age, does this enterprising maverick have any plans to put his feet up and retire anytime soon? “No,” he says with a grin. “I enjoy this too much.”
Product ParadeAll Urmatt products are certified organic. Products include: Dragonfly organic rice; Life Brand organic soluble rice bran; Perfect Earth organic chia seeds; Perfect Earth organic chia pasta; Maprao organic coconut water; and Hilltribe Organics free range organic eggs. www.urmatt.com

 

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