Liberals, Conservatives and Socially Responsible Investing

Not all socially responsible investors are liberals

Business meeting, businesswoman shaking hands with associate
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Conventional investors tend to look at those who practice socially responsible investing as liberals and lefties. But the fact is the term “socially responsible investing” is a moderately large umbrella covering a number of smaller groups.

You’ll find environmentally responsible investors who screen out companies that abuse the environment and invest in “clean energy” companies. No doubt many in that group would place themselves left of center.

Moral and Social Investors

There are moral investors who exclude companies involved with abortion, pornography and benefits for same-sex partners from their investments. These are investors whose politics are conservative.

Then there are social investors who put human rights at the top of their lists and monitor corporate supply chains for abuses, question diversity practices and demand a say on pay. Though passionate about their principles, they could be the moderates at the next SRI political convention.

No doubt there is a crossover. Certainly, moral, responsible investors also place human rights among their priorities, and there are environmentally responsible investors who have conservative views on same-sex couples.

But not everyone can be labeled. Take the ​​Everence Praxis Mutual Funds, affiliated with the Mennonite Church USA. It’s a family of funds that one might think is conservative because of its connection to a religious group, rather than a mutual fund company.

But not only does it exclude weapons makers from its list of investments – not all that unusual in the SRI genre – it stays away from defense contractors. If a company is on a list of top defense contractors, it's out.

Strange Bedfellows

Among conservative investors, there’s nothing wrong with investing in a company that contributes to the national defense of the United States.

It’s a contrast that Chad Horning, chief investment officer for the funds, readily admits.

“You have the ‘just war theory’ that people would subscribe to that, generally speaking, Mennonite-Anabaptists would not,” says Horning. “Even within the genre of faith-based investors, we have a different opinion on this particular issue. But pacifism has been a hallmark of the Anabaptists for the last 500 years, and we take our cues from the theology and teachings of our denomination that support us and sponsors us.”

Consequently, Horning finds his funds on this issue sharing a viewpoint with progressive, non-sectarian SRI funds who view defense contractors from a political point of view, rather than a religious one.

“We do find this idea of strange bedfellows where we have a lot in common with other, what I would call evangelical investors on some issues, but we have more in common with more progressive religious investors on the other hand.”

And just to add another term under the SRI umbrella, the MMA Praxis funds labels its money management approach “stewardship investing.”