CPG Connect

Socially Responsible Investing: Effecting Change with Positive Returns

Winter 2021

To meet the obligations under the pension and other benefit plans that CPG administers, The Church Pension Fund (CPF) holds and invests assets contributed by employers and individuals. In managing our investments, CPF looks for opportunities to realize attractive investment returns.

We are mindful of Church values in managing the portfolio and look for ways to meet our primary financial obligation while also achieving important social goals. CPF has taken a proactive approach to socially responsible investing (SRI) that is consistent with our fiduciary duties.

To generate strong returns required by the fund, portfolio investments must be built on sustainable long-term business models. This aligns with the SRI goal of sustainability. Once narrowly linked with saving the environment, today the term broadly defines a daunting challenge that governments, businesses, and individuals face: How can we meet today’s needs without compromising our ability to meet the needs of future generations?

“At CPF, ‘sustainability’ includes impact on the globe. It’s renewable energy, worker health and safety, human trafficking awareness, and governance. By encouraging companies to operate in a sustainable framework, we’re driving at what positions an investment for the long term,” Christopher Rowe, CPG’s Managing Director, Investments, explains.

Engaging corporations to make decisions that drive long-term shareholder value is a key component of CPF’s SRI goals. Christopher points out that successful companies plan for the future and many ethical values are also economic values. Ethical issues can be business issues that shape future financial performance—and shareholder returns.

It Starts with a Plan

CPF’s approach to socially responsible investing includes these practices:

  • Investing for positive impact – We proactively seek out and invest with managers who deliver both strong returns and positive social and environmental outcomes, as examples in these videos
  • Shareholder engagement – Working with the Executive Council’s Committee on Corporate Social Responsibility, we use our position as an institutional investor to engage with companies in our investment portfolio.
  • Thought leadership – We share our experience through Insights & Ideas forums and collaborate with other investors to create awareness of modern, effective strategies for using capital to achieve positive social impact.
  • Environmental, social, and governance (ESG) incorporation – We talk with managers of our portfolio assets about how they are factoring in ESG issues when they analyze investments.

“These are not one-off conversations but a process of building trust with stakeholders,” Christopher says. “We will continue to look for opportunities to achieve competitive risk-adjusted returns—and influence behavior in a way that reflects our values and supports the values of the Church.”

Making Housing Affordable

The Church Pension Fund supported the redevelopment of Northpointe Apartments, a multifamily affordable housing complex in Long Beach, California. Serving as an anchor investor, CPF worked with Avanath Capital Management, LLC, a minority-owned investment firm. Listen to what Avanath’s investment manager had to say about bolstering economically disadvantaged communities, during CPF’s January Insights & Ideas conversation.

 

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