Funds growth puts church business in $6b-plus range

CHURCH members are following the lead of environmentalists and unions in taking their spin on business into the nation’s board-rooms.

Superannuation funds and unit trusts originally set up for the clergy and church staff are now attracting finance from churches and church members.

According to ethical investment consultant Deni Green, religious funds have shown substantial growth during the past year.

Releasing her Social Responsible Investment (SRI) report at last week’s Ethical Investment Association conference in Sydney, Ms Green pointed out that SRIs from religious organisations grew 7 per cent over the past year to approximately $6.7 billion in funds under management.

This sector already surpasses employer superannuation funds, which have ethical outlays of $5 billion invested, and defies the slight decline felt across other Australian managed funds.

For religious investors there are several investment options avail-able, which normally use either negative or positive screening process.

There is the Anglican SuperFund, managed by Glebe Asset Management, which itself stemmed from the Anglican Church. The Australian Baptist Retirement Fund, Christian Super, National Catholic Super Fund, Queensland Roman Catholic Retirement Plan and the Uniting Church in Australia Funds Management all offer different investment plans.

As retail fund managers, Australian Ethical Investment and Glebe Asset Management Limited both use a screening process, which makes them attractive to religious members.

The Islamic community has another option with the launch of the first Australian Islamic fund manager in Sydney last month, with offices expected to be opened around the country.

Called Salic, it employs the services of Islamic leaders to ensure that all of its investors are ‘shariah’, or permitted under the Koran.

Salic CEO Malik Helwah said it would be the first time that Muslims in Australia could invest in funds that complied with their teachings.

Mr Helwah has tapped into a potentially huge market, with an estimated 500,000 Muslims living in Australia.

“The Islamic financial services industry is globally one of the fastest growing sectors. There are currently over 100 financial institutions [globally] exclusively providing Islam-compliant financial services,” he said.

“Many more offer Islamic banking products along with the conventional ones.

“The size of the market is spreading over more than 50 countries.

“They are currently managing over $US250 billion and growing at about 15 per cent per annum.”

Like the traditional funds, the religious funds place a significant emphasis on environmental criteria. In addition, they usually rule out any investment in casinos, pornography, alcohol, tobacco or armaments.

As the financial clout of the religious funds expands, so does the pressure they are able to exert on potential investment targets. Like the environmental and union funds, the religious funds are also starting to place demands on company performance and the spheres in which they operate.

Last week the Christian Centre for Socially Responsible Investment (CCSRI) launched its website as: “Another step on the way to realising its aims in providing leadership and advocacy in socially responsible investment based on Christian values.”

CCSRI is a group of Christian Church investment arms that has banded together since May as a means to enhance the power of the individual funds through engagement with Australian and overseas corporations.

Since its conception CCSRI membership has grown from six representatives from the Anglican, Uniting, Assemblies of God and Baptist churches, as well as Christian superannuation funds.

It has adopted strategies similar to those employed by the US-based Interfaith Centre of Corporate Responsibility, the Ecumenical Council for Corporate Responsibility in Britain and KAIROS in Canada.

Ethical Investment Association’s newly appointed vice-president, Simeon Michaels, said the origins of ethical investment went back hundreds of years.

However, it was the activities of environmental and green groups in recent years that had pushed it to the forefront.

Christians were simply reasserting their influence, he said.

“The churches have always sat on a lot of wealth. But I think most hasn’t been in managed funds,” Mr Michaels said.

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