Making an Impact Through Socially Responsible Investing

James Carey, Director, Investment and Portfolio Management Services

While socially responsible investing has become a popular trend in recent years, New Covenant Trust Company has been an active participant in the SRI community for decades. That’s because everything we do is driven by our faith and values, and our passion to support the mission of the Presbyterian Church.

Our goals are to not only achieve successful investment outcomes for our investors, but also to invest faithfully according to our social witness principles and help proactively spark the positive environmental and social change our faith heritage calls us toward.

“Sustainable investing can no longer be categorized as the future of investing,” according to Barron’s. “It is a reality today, just as issues such as climate change, cybersecurity, data protection, workplace diversity and inclusion, and better stakeholder alignment are now widely accepted as vital for better corporate citizenship and social outcomes.” 

Here are just a few positive outcomes from a historic 2021 corporate proxy season. We’re proud to be a part of these efforts.

Environmental Impact

The Presbyterian Church (U.S.A.), through the committee on Mission Responsibility Through Investment (MRTI), was lead filer on a proposal dealing with climate-related lobbying disclosure at United Airlines. The proposal received a majority 65% vote.

A similar proposal at Delta Airlines was also passed successfully in 2021 after failing in 2020. NCTC investors support the work of MRTI through shares owned in our separately managed accounts and certain other strategies.

Equity and Inclusion

One of our longtime mutual fund partners, Calvert Management, has advocated for decades on environmental and social issues. In late 2020, Calvert wrote to 100 of the largest companies in their portfolios, asking for the release of their EEO-1 reports. These reports provide details about a company’s workforce, broken down by several racial and ethnic categories and by gender at each of 10 professional levels.

By focusing on disclosure, Calvert has sought to improve the transparency around what companies are doing to promote diversity in their workforces and management teams. By early 2021, 27 companies newly agreed to release their reports. Calvert has long been a core component of NCTC’s socially responsible client portfolios.

Relief Efforts

Praxis Funds, an Impact Bond manager for NCTC’s socially responsible portfolios, purchased bonds supporting the John D. and Catherine T. MacArthur Foundation’s grants to assist nonprofits and communities affected by the COVID-19 pandemic. NCTC investors have also supported affordable housing and clean energy projects through Praxis.

Opportunity and Advancement

In 2021, NCTC added Community Capital Management (CCM) to our SRI portfolios. Since 1999, CCM has been investing in impact bonds across 18 themes, including affordable housing, economic inclusion, environmental sustainability and minority advancement. These investments include projects qualified under the Community Reinvestment Act.

To date, NCTC has earmarked investments in affordable housing apartments, low- and moderate-income mortgages, childhood and post-secondary education programs, and state affordable housing agencies.

A Growing Movement

The past year marked a turning point for values-based investing. According to the Wall Street Journal, “Investors are also watching closely to make sure executives live up to their ESG promises. This proxy season, in particular, institutional investors ratcheted up the pressure on company executives to take action.”

NCTC is committed to remaining on the forefront of this growing movement. We’re honored to be able to invest on behalf of our clients in ways that support the impact and mission that’s so important to them.

If you would like more information on how we can help you invest in line with your values, click here or call us at 800-858-6127, Ext. 6.