FaithInvest has been working with trustees of the English Sangha Trust, a small Buddhist nonprofit serving two monasteries in England, to develop new investment policies and guidelines.
We have outlined our work together in a case study – including how it resulted in the EST reaching the highest possible score on our proprietary faith-investing analytical framework.
Until 2022, EST did no long-term investing, instead maintaining short-term portfolios of fixed income assets with three- to five-year time horizons and low risk/return profiles. However, faced with an ageing community, the EST wanted to establish a longer-term investment fund and also to ensure its funds were more aligned with Buddhist values, which is why it approached FaithInvest for help.
Buddhist values
Core Buddhist teachings which shape Buddhist values include the Four Noble Truths, the Noble Eightfold Path, and the Five Precepts.
The Eightfold Path includes right view, right thought or resolve, right speech, right conduct or action, right livelihood, right effort, right mindfulness and right concentration. To demonstrate how these principles might influence investment decisions, the path of 'right livelihood' can be extrapolated into avoiding companies that exploit workers, for example.
The Five Precepts of Theravada Buddhism include:
Refrain from harming living beings
Refrain from taking that which is not freely given
Refrain from sexual misconduct
Refrain from wrong speech; such as lying, idle chatter, malicious gossip or harsh speech
Refrain from intoxicating drink and drugs which lead to carelessness
These guiding principles could lead Buddhists to favour investing in renewable energy, which does not pollute or leave a toxic legacy for the future, or rapaciously consume the planet’s resources, and away from investments that harm the planetary environment through the destruction or pollution of earth, water, air and living creatures, such as mining or pesticides.
The process
The EST and FaithInvest worked closely together to craft an enhanced IP&G (Investment Policy and Guideline) statement incorporating aspects of faith-consistent investing (FCI) relevant to Buddhism over a 15-month period.
This process included:
The Trustees and the monastic community working together to identify the core Buddhist values they wanted to express through their investments.
Creating investment screens (positive & negative).
Developing specific investment parameters and goals around liquidity, risk, and return.
A portfolio with short-term investments (reserve and capital development funds).
A portfolio with longer-term investments
Market research on investments that matched the requirements of both portfolios.
Asset manager assessment and fund analysis.
'We had to go on a journey and FaithInvest’s role in the journey was a really critical part, giving us perspective at all steps along the way’ – John Stevens, EST Chair
The outcome
As a result of this work, when FaithInvest assessed the new, enhanced IP&G statement, the EST achieved an increase from 2.1 to 10 – the highest score possible – on FaithInvest’s proprietary faith-investing analytical framework, which assesses the extent to which faith groups align their investments and their values.
John Stevens, EST Chair, said the Trust benefitted from FaithInvest's experience in faith-consistent investing: 'Because FaithInvest is connected to a global network of faith organisations already undertaking faith-consistent investing, they are well-positioned to showcase examples of what other FBAOs are doing.'
'The project with the EST provided us with a wonderful opportunity to engage deeply with a committed faith community to provide close support for their faith-consistent investing journey, and we were delighted to be a part of it' – Mathew Jensen, FaithInvest's Director of Investment Solutions
To read the case study in full, click below.
