Why BRI?
“Why BRI?: An honest look at Biblically Responsible Investing”
What is BRI?
BRI stands for Biblically Responsible Investing. “BRI is an investing approach that seeks to ensure that a Christian is investing in a way that is consistent with the moral standards of the Bible.” (Enete, 2017) When you invest in stocks or mutual funds, you own a small portion of a company whose intention is to create sustainable revenue (and profit.) As an investor in that company, you share in the growth and profit. With ownership comes responsibility.
BRI actively filters companies according to the decisions they make: what will they manufacture, what will they voluntarily support through charitable contributions or targeted advertising, how will they treat their employees and vendors, and what impact are they making in the world from a moral viewpoint.
The main point
For too long, investing has been seen as an amoral activity whose primary goal is profit or gain. If you make money, you’ve made a good investment, right? If that were truly the only criteria for a Christian to consider, then I would strongly suggest that you go buy an abortion clinic or an ‘adult’ bookstore. There is plenty of money to be made there, if money is all there is. But for most of us, that suggestion goes “too far.” We would never purposely invest directly in enterprises that harm others, promote addictions, divide families, or defame Christ’s mission. The question to ask then is—how is stock ownership any different?
Its history
Biblically Responsible Investing is a part of the larger Socially Responsible Investing (SRI) movement. As early as the late 1600s, the Quakers chose not to invest in the Dutch East India Company (DEIC) to avoid investment in slave trading. The DEIC was founded in 1602 and was the first company to ever issue stock shares. The Quakers realized that investing in the company made them culpable as owners. In the United States, the SRI movement took hold in the 1920s with the founding of the Pioneer Fund, established to avoid investing in companies that sold alcohol and tobacco. The Pax World fund was formed during the Vietnam War to avoid support of the war and then in the 1980s, the Apartheid movement caused many retirement funds to divest from businesses working in South Africa. (Enete, 2017)
In the early 2000s, investors and advisers in the United States who embraced a Christian worldview began to desire Biblically Responsible Investing. Being able to screen out (or avoid investing in) abortion, pornography, LGBT activism, human rights violations, anti-family entertainment, alcohol, tobacco, and gambling would help these investors align the investments with their values.
How does BRI work?
According to Inspire Investing, “BRI products are constructed in a way that is consistent with biblical truth.” (Enete, 2017) This happens by doing one of three things:
1) Endorse—Endorsement means to participate with companies that are particularly consistent with biblical truth. As Robert Netzly of Inspire said on Christian Financial Podcast “Our focus really is identifying the most inspiring, biblically aligned companies in the world to invest in. Companies that are making a positive impact with their business activities. They are blessing their communities, their workforce, the world in general, and really operating in line with biblical values. It doesn’t mean that they’re ‘Christian companies.’ There really isn’t such a thing, but companies that are operating in light of biblical values, and that includes avoiding bad actor companies that may be involved in, say, manufacturing abortion drugs or distributing adult entertainment content, or other issues like that. So, we avoid the bad. And then we really look for those best companies, companies that are creating clean water solutions, companies that are working on cures and treatments to cancer and other diseases, and really operating with best of the best in their industry and put those together into low cost index-based investments, wrap them up in a variety of different delivery vehicles, whether it’s an exchange traded fund or it’s a separately managed accounts or other types of investments. And that’s what we do.”
2) Engage—Engagement involves owning companies with the intent of affecting change through shareholder advocacy. When you own stock in a company, you can have a voice in the company’s policies. Creating positive pressure through phone and email campaigns or introducing shareholder resolutions to change policy are possible options.
3) Exclude—This is perhaps the most simple approach to BRI—to simply not invest in companies that support unbiblical values. This can be quite simple in the small cap investments because small to mid-size companies tend to be less flagrant in their support of vice. However, even within large cap companies, there are many options to invest in which do not support unbiblical values. A 2019 report by Altum indicates that in the area of abortion, only 92 of the 500 companies in the S&P actively support abortion. Twenty-three of 500 companies experiment with fetal tissue. With regard to human value, only 2% of the S&P companies were shown to violate their workers or use child labor, 5.6% were involved in pornography, and 7.2% openly oppose conscientious objection for religious reasons. That still leaves a lot of companies who care about unborn life and human value.
Does BRI deliver lower returns?
All of this begs the question—does BRI deliver lower returns? If I am limiting the ‘universe’ of available investment choices, does that hurt my return? Can I get the proper allocation I need?
Does restricting my investment universe hurt me?
There is a notion that avoiding certain companies or funds will “shrink the pool” of investment options, causing good investment opportunities to be missed. However, much research over the last decade has proved this to be false. An analysis of 85 studies and 190 experiments done by C. Revelli and J.L. Viviani in 2015 “concluded that there is no compelling evidence that various sustainable and responsible investing methodologies drove return performance in either a positive or negative direction relative to non-restricted peers.” (Enete, 2017)
Are there enough BRI options for good diversification?
There has been a dramatic increase in the number of funds and strategies developed specifically for BRI selection in the last decade. Technology used to screen funds has developed dramatically, enabling the movement to see and reward funds that purchase companies who “love God and their neighbor well” (even if the funds are not specifically created for BRI use.) This is like Jesus’ teaching in Mark 9:40 “...for whoever is not against us is for us.” Being able to screen companies well allows BRI investors to utilize both 1) overtly Christian funds which are purposely consistent with biblical truth as well as 2) funds which operate in a consistent manner, regardless of motive.
“While there are certainly more “non-BRI” solutions than BRI solutions, there are sufficient options in the marketplace for an investor to create a well-diversified BRI portfolio. New BRI investment options are becoming more prolific as part of the overall trend toward responsible investing.” (Enete, 2017)
Whose money is it anyway?
Robert Netzly, NY Times best-selling author of “Biblically Responsible Investing: For God’s Glory and Your Joy” made a compelling argument about BRI: “I just couldn’t see myself standing before my Lord one day and being proud like, Hey Lord, aren’t you proud? Look at all this money I made for investing in abortion drugs. So to me...by the grace of God and even as flawed and imperfect as I continually am, this is another way that he’s showing me that I can just bring him glory.” (www.christianfinancialpodcast.com) We believe, at Faith Investment Services, that “It’s His money...shouldn't it reflect His values?” but also that it is “our money...shouldn’t it reflect our values?” These two outlooks aren’t in opposition to one another. Our money is God’s money and our thoughts should be aligned with His.
If we truly believe we are managing God’s money, would returns be our primary consideration? (Remember the great returns that an abortion clinic is likely to produce.) Or would we start with the greatest commandment—to love God and love others? As the richest nation in the world, where even the poorest citizens experience comfort and safety, we can easily be lulled into believing that our wants, needs, future protection, etc. are of paramount importance. That perspective will certainly shift on Judgment Day when we are asked to give an account. It could be that, on that Day, how much return we made will be a dim, distant concern.
What does BRI accomplish in the world? in my heart?
BRI has been shown to affect corporate policy on things such as voluntary support for Planned Parenthood or egregious labor practices. Companies listen to their shareholders and “follow the money.” Using BRI practices can help make the boardroom aware of how Main Street investors feel about things such as advertising in LGBTQ magazines or parades, offering pornographic movies and entertainment as part of their hospitality industry, promoting and marketing alcohol and/or tobacco which are addictive and mind-altering, etc. It is common for companies to take a stance on cultural issues such as promoting gay marriage, not because they feel strongly about the issue, but because they’ve been pressured by special interest groups. Simply put, they think it is in the company’s best interest to “promote the cause.” BRI provides a real ‘ownership’ voice in these decisions, for God’s glory.
Embracing BRI can also impact the Christian as well as the company. When your investments align with your values, you are living in integrity and your conscience finds rest. On the other hand, we have had believers leave our office saying, “I wish I had never heard about BRI.” For them, the ‘risk’ of losing financial returns overpowers them and they walk away from what they know God is asking them to do. We can sense that they have heard the voice of God (and turned away) when we hear their regret. James 4:17 puts it like this: “So whoever knows the right thing to do and fails to do it, for him it is sin.” ESV
What should I do?
If you are willing to consider Biblically Responsible Investing as a means of aligning your investments with your values, the path looks like this:
1) Allow us to see a complete statement of your current investments. (a copy of your web account is generally not enough, but we can help you get the full statement if needed) We will run the ticker symbols of the investments in the account through a “fund screening” tool we subscribe to. This looks at the voluntary and corporate activity of the underlying companies and assesses to what degree they support various activities.
2) We give you a BRI screen report, showing how much of your current portfolio is invested in each of the various moral issues. This report is free and you are under no obligation from us to do anything.
3) If you want to try to change how much your investments support various screens, we can have a discussion with you about how to do that. Some investments (possibly 401k plans or other long-term investments) cannot be moved to another account, but they can often still be improved in certain ways. Other investments can be moved to a different investment vehicle altogether when it is prudent and still meets your investment goals and objectives. This process is a conversation and we work very hard to be clear about your options so that you can make informed decisions. We don’t decide for you—you are in the driver’s seat with no pressure or obligation.
4) BRI is no more costly than a non-BRI option. Costs to invest vary by type of investment and we are committed to being transparent about that, if you invest with us.
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Sources cited:
https://www.inspireinvesting.com/post/inspired-investing-an-introduction-to-biblically-responsible-investing
https://asset.inspireinvesting.com/hubfs/Marketing%20Materials/Research/Altum_Report_SP500_ENG.pdf
https://assets.biola.edu/4396738754672012438/attachment/59dfc0f175b0614cde341da0/Introduction_to_BRI.pdf
https://www.inspireinvesting.com/post/inspired-investing-an-introduction-to-biblically-responsible-investing