Faith-based due diligence: questions every faith-based investor should ask their asset manager

Translating faith principles into investment practice isn’t always straightforward—especially when working with external asset managers who may not intuitively understand or prioritise those values.

A key finding from FaithInvest’s Good Intentions (2023) report is that while some faith-based investors are taking steps toward faith-consistent investing, many still struggle to make these commitments tangible and actionable in their portfolios. A critical component of bridging this gap is early and open dialogue with asset managers, ideally starting at the point of reviewing or revising your Investment Policy and Guidelines (IP&G). This is the “front door” to faith-consistent investing. Without clear articulation of your faith's role in investing, managers have little basis for aligning portfolio decisions with your values. But even with a faith-aligned IP&G, the work isn’t done. Regular, informed engagement with your managers is necessary to ensure your portfolio investments truly reflect your mission.

However, many faith-based asset owners may not feel equipped with the right tools—or confidence—to ask the right questions. Recently, we received a request from a member of our FCI network asking for guidance on questions to ask their investment manager to ensure their portfolio is being managed in line with the values of the faith.

To help, we’ve compiled a set of concrete, practical questions that push for meaningful accountability.

Start with ESG Integration

Ask:

• How do you integrate ESG factors into your investment analysis and decision-making process?

• Can you provide specific examples of investments you declined based on ESG concerns?

• What percentage of your portfolio companies have you engaged with on ESG issues in the past year?

Faith-consistent investing often begins with clear negative or positive screens—but must extend to robust engagement practices. These questions help assess whether ESG considerations are simply a marketing tagline or truly embedded in the manager’s investment philosophy.

Dig into Voting and Engagement

Ask:

• What is your proxy voting policy on climate, environmental and social justice, human rights, and governance issues?

• Can you share your voting record on shareholder resolutions related to environmental and social issues?

• How do you decide when to support or oppose management on ESG proposals?

Good Intentions revealed that 56% of asset owners had no faith-aligned proxy voting policy, despite the importance of proxy votes in shaping corporate behaviour. Without clear expectations and transparency, a manager’s voting record may undermine your values.

Demand Transparency and Impact

Ask:

• What specific metrics do you track to measure the ESG performance of portfolio companies?

• How frequently do you report on engagement activities and outcomes to clients?

• Can you provide a sample engagement report showing your approach and impact?

The Good Intentions report found that reporting was surprisingly thin, even among faith-aligned investors. If reporting isn’t formalised, it becomes difficult to measure progress—or to know whether your faith values are being respected in practice.

Address Specific Themes: Climate, Human Rights, Governance

Drill down on core areas of concern that are relevant to your faith values. Here are some examples:

Climate Action

• What is your approach to assessing climate risks in portfolio companies?

• How do you engage with high-emission companies on transition plans?

• Have you divested from any companies due to inadequate climate action?

Human Rights and Social Issues

• How do you assess human rights risks in supply chains?

• What specific social metrics do you prioritize when engaging with companies?

• Can you share examples where your engagement led to improved social practices?

Governance

• How do you address executive compensation issues through engagement?

• What is your approach to board diversity and independence?

• How do you handle companies with persistent governance concerns?

Ask for Measurable Impact

Ultimately, values-based investing should lead to real-world change. It’s not enough for managers to say they care about ESG issues—faith-based asset owners need to see how that care translates into action and outcomes.

That’s why it's essential to ask:

• How do you measure the effectiveness of your engagement activities?

• What percentage of your engagements resulted in measurable positive changes?

• Can you provide concrete examples of successful engagement outcomes?

Asking these kinds of questions doesn’t just elicit useful information—it pushes asset managers to do the work, track their efforts, and report transparently. This enables faith-based investors to see the actual progress being made on issues that matter most to their values.

Critically, it also gives faith investors a data-driven foundation to evaluate their managers’ performance over time. If the answers reveal a lack of action, commitment, or meaningful results, the investor is better equipped to make an informed decision about whether to continue the relationship or consider shifting to a more values-aligned asset manager. Asking the right questions is how you hold managers accountable—and how you can remain accountable to your own faith values.

When the Answers Aren’t Enough

We know that for many faith-based investors, these conversations can feel daunting. Financial language can be opaque, and the mechanics of engagement, ESG integration, and proxy voting may seem overly technical or far removed from your faith mission. But it’s okay to ask your asset manager to explain things in clear, jargon-free language—and to do the research if they don’t already have the answers. When you ask these questions, you are encouraging your asset manager to take your faith values seriously, to track their efforts, and to report in ways that make your impact visible and measurable. Just as importantly, these questions give you a data-driven foundation to regularly review your asset manager's performance.

If your asset manager struggles to answer these questions—or if their responses are vague, evasive, or inconsistent with your values—don’t be afraid to push back. If the answers reveal a lack of action, commitment, or meaningful results, you are in a stronger position to decide whether to continue the relationship or consider transitioning to a more faith-aligned manager. Ask for greater transparency. Revisit your IP&G to ensure it provides clear mandates. Consider transitioning assets to managers who specialise in values-driven or faith-aligned investing.

Remember, as a faith-based asset owner, you are the steward of your financial resources, and by asking the right questions—and insisting on answers that reflect your values—you can move closer to truly mission-aligned investing.

How can FaithInvest help?

An essential element of a faith-aligned investment portfolio is your investment policies and guidelines statement.

FaithInvest offers an IP&G analysis at no charge and we would be delighted to conduct an assessment for your organisation, just drop us a line at info@faithinvest.org for details.

We can also develop customised manager due diligence questionnaires for your group and provide regular scoring of manager's adherence to your faith-based IP&G. This service incurs a fee.

Finally, for an in-depth exploration of how your faith organisation can become more values- aligned in its portfolios, have a look at our four-week Faithful Finance course - the next session starts on 20 May and you can learn more here.