The Presbyterian Church is a leader in advocating for social justice and equality. New Covenant Trust Company’s diversity, equity & inclusion strategy supports the values of the church and continues the long-standing tradition of Presbyterians engaging corporate behavior with their investments.

Our DEI strategy is designed to track the Russell 3000 U.S. stock index while targeting investment in companies with a proven commitment to equal opportunity, non-discrimination and diversity.

We evaluate companies on their workforce, supply chains, environmental efforts and community engagement. Only the top 10% of the 3,000 companies rated on the following DEI scores are eligible for consideration:

• Board & Management Diversity
• Non-Discrimination Policies
• Measures to Promote Equal Opportunity & Diversity
• Supplier Standards — Labor Rights & Working Conditions
• Supplier Standards — Human Rights (i.e., Conflict Minerals, Right to Clean Water, Indigenous Peoples)
• Climate Change Strategy
• Community Involvement

We believe these ratings align currently available corporate data with the DEI values outlined by the General Assembly, and are consistent with Presbyterian values. We continue to push toward more disclosure and transparency, which will allow additional DEI metrics to be used in the future.

NCTC’s DEI strategy is a buy-and-hold, rules-based model. This means that stocks are added to the portfolio based on defined criteria (DEI and ESG ratings, market cap) instead of speculation on how their stock will perform in the short term. This model is designed to keep fees low and track the Russell 3000 as closely as possible, an approach we believe offers the best chance for efficient investment outcomes over time.

The DEI strategy is most appropriate for large cap U.S. stock investors who want to incrementally move toward investing in companies doing the most on DEI efforts, and away from those doing the least. For investors who have other asset classes such as bonds or cash, this strategy may also provide opportunities to shift capital toward investments that promote justice and equality. At this time, NCTC’s DEI strategy is available to institutional investors, such as churches or Mid-Councils. We hope to open it up to individuals in the near future.

We believe it’s our duty to offer our clients an opportunity to invest in accordance with the essential values of diversity, equity and inclusion. While we know this strategy is not the only thing that needs to be done to promote justice and equality in Corporate America and our society as a whole, we believe it’s an important step in the right direction. And we hope to see a movement toward equity for all people to grow globally across the asset management industry in the years to come.

Also, research continues to show that companies with the highest levels of gender, ethnic and cultural diversity are more likely to achieve above average financial results over time. We expect to see a shift in market share toward more diverse companies, which supports the business case for incorporating DEI criteria into investments.

Please contact us for more information about how our DEI strategy can complement your overall investment objectives.