Church doubles down on ethical investment advice

Posted on 22 Jan 2024

By Greg Thom, journalist, Institute of Community Directors Australia

The Uniting Church has turned to Australia’s largest investment consulting organisation to help manage its ethical investment strategy.

Religious charitable development fund Uniting Financial Services (UFS) has chosen not-for-profit specialists JANA as investment consultants.

The firm will provide UFS with services including strategic advice, manager research, portfolio construction and environmental, social and governance (ESG) advice.

Established in 1987, JANA has more than $1.3 trillion in funds under advice and works with 35 not-for-profits ranging from foundations and endowments to government clients.

The firm has been rapidly growing its NFP footprint, adding four sector organisations to its roster of clients in the past 12 months.

Currently managing more than $1.7 billion in funds, UFS was established more than 90 years ago to provide lending and investment services to the Uniting Church in NSW and ACT.

Along with helping Uniting Church organisations to manage and grow their finances, as a not-for-profit, UFS also funnels proceeds from the $1.7 billion in funds under management back to the Church rather than as dividends to shareholders.

The UFS website states the organisation is guided by “beliefs driven investing” that is aligned with the Uniting Church’s mission and helping communities in need, as well as supporting church life and congregations.

“We believe responsible investing has a huge ripple effect across our communities and ecosystems and on the pace of government and corporate action.

“Our mission is to deliver financial leadership through disciplined ethical investment with a heart for the Church’s mission.

“Our activities are governed by ethical investment principles and the United Nation’s Sustainable Development Goals.”

JANA senior consultant and head of not-for-profits Michael Maher, said there was an opportunity to support more for-purpose organisations, foundations and universities, who could benefit from access to an independent, institutional investment consultant.

“We understand the diversity of the NFP sector and the unique requirements when it comes to investing, especially in the religious and charitable sector, whom often have unique ESG commitments,” said Mr Maher.

“This rings true for most NFP organisations whose investment strategies need to be deeply aligned to their mission and generate revenue streams that support them in their long-term success.”

UFS chief investment officer Edwin Lo, agreed.

“We believe the appointment of an asset consultant will help to deliver sustainable portfolio outcomes for clients over the long term, incorporating our fundamental investment and ethical beliefs.”

Mr Lo said the partnership would also help UFS to enhance its client engagement and product development programs.

“We are excited to work and collaborate with JANA, one of the leaders in this space in Australia and New Zealand,” he said.

“We believe the appointment of an asset consultant will help to deliver sustainable portfolio outcomes for clients over the long term, incorporating our fundamental investment and ethical beliefs.”

UFS chief investment officer Edwin Lo.

UFS operates as the treasury and investment management arm for Uniting Church entities and organisations.

Examples of ethical investments highlighted in the UFS Sustainable Development Goals Bond Impact Report 2023 include:

construction of environmentally friendly student accommodation at the University of Melbourne
a program designed to address mental health and loneliness amongst Australian office workers
a green financier focused on making sustainability accessible and affordable by offering consumers a fast and easy way to pay for solar, battery, home electrification and energy efficiency

The Responsible Investment Association of Australia (RIAA) latest Responsible Investment Benchmark Report Australia 2023 revealed Australia’s responsible investment market was valued at more than $1.3 trillion in 2022 .

Ethical investing has become a hot button issue for many Australians who want to see their money used for good.

An RIAA survey found four out of five Australians expect their bank account and super to be invested responsibly and ethically.

Three quarters of people said they would consider moving to another provider if their current fund was revealed to be investing in companies engaged in activities inconsistent with their own values.

In October 2023, responsible gambling advocates called for greater consumer transparency around superannuation funds investment in gambling stocks.

They urged the federal government to intervene to make it easier for people to check if super funds who claim to offer sustainable investment options are actually ‘walking the talk.’

The call followed analysis by the Alliance for Gambling Reform (AGR) which showed superannuation funds have invested billions of dollars in gambling and poker machine companies.