How does mission-based investing work?

By on January 1, 2005
  • Screening out companies that contravene an institution’s mission (e.g. companies that pollute, manufacture weapons, engage in child labour) in preference for companies that do good work (e.g. promote empowerment of women, support the environment). “It’s by a reward system,” said Jill Martin, finance co-ordinator of the Primate’s World Relief and Development Fund (PWRDF).
  • Shareholder action or advocacy, which could mean attending meetings of corporations where an institution has an investment, engaging stockholders in dialogue, influencing corporate behaviour. “It’s saying, we own that stock so we have a right to vote,” said Ms. Martin. PWRDF will co-ordinate its efforts with Kairos, the Canadian ecumenical social justice organization, which is responsible for developing strategies related to aligning churches’ missions with their investment policies and practices.
  • Community economic development or alternative investing. This involves investing in organizations that do work in developing countries or give micro-finance loans to marginalized sectors.
  • Social venture capital, coming from labour-sponsored investment funds that are committed to integrating social and environmental criteria into their investment decisions.

Ms. Martin said MBI is different from the concept of socially responsible investment or ethical investment, which merely screens out investments. MBI “is a concept of using all your assets in the pursuit of your mission,” she said.

Ms. Martin allayed fears that adopting MBI won’t yield competitive results for PWRDF funds. The principles of MBI, which has been adopted by the United Church of Canada, has proven “that in many instances, if you’re not actually better off, you’re certainly not worse off,” she said.

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