Faith-Based Investing, Stewardship, and Sustainability: A Comparative Analysis

Abstract

This article discusses how faith-based investing addresses sustainability, focusing on Catholic, Church of England, and Islamic faith-based investing in the US, the UK and Malaysia, respectively, as illustrative examples. It posits that there are three dimensions to how these three institutional religions approach sustainability through faith-based investing, namely the underpinning religious values and principles, the legal and regulatory framework governing faith-based investing, and investment stewardship approaches. Section 2 provides an overview of sustainability and sustainable finance, situating faith-based investing within the universe of socially responsible investing and environmental, social and governance investing. Section 3 delves into sustainability and the values and organising principles underpinning Catholic, Church of England, and Islamic faith-based investing to highlight areas of conceptual alignment and their nexus to sustainability. Section 4 examines the legal and regulatory frameworks governing faith-based investing contrasting an extensive reliance on soft law in the US context with specifically tailored law and regulation for Islamic faith-based investing in Malaysia and considers its implications on the certification of faith-based investing as a central element. Section 5 compares the faith-based investment stewardship approaches in these jurisdictions to identify areas of convergence and divergence. Section 6 reflects on the broader opportunities which faith-based investing encounters in its development and the challenges it faces in advancing sustainability.