Faith-based investing is becoming increasingly relevant in the financial world, reflecting a genuine desire to invest ethically, responsibly, and in full alignment with Christian values. In recent years, ESG criteria (Environmental, Social and Governance) have become a global reference for investors seeking to integrate sustainability into their portfolios. But a key question remains: Is ESG sufficient for Catholics who want their investments to be fully coherent with their faith?
Or do we need a deeper framework—one firmly grounded in the Social Doctrine of the Church?
What Is ESG Investing and Why Has It Become So Popular?
ESG evaluates companies according to three pillars:
- their environmental footprint,
- their social policies, and
- their corporate governance.
In theory, a high ESG score indicates responsible resource management, fair treatment of employees, and transparent governance practices.
However, while ESG has represented progress compared to purely financial approaches, it has clear limitations for Catholic investors. They do not seek only sustainability—they seek moral coherence.
A company may receive an excellent ESG rating for environmental leadership while being involved in activities that contradict Catholic values in investing, such as supporting abortion-related services, conducting research using human embryos, or producing contraceptives.
This disconnect highlights why many Catholic investors feel ESG falls short of the ethical clarity they need.
Faith-Based Investing: Beyond ESG
Faith-based investing, also referred to as Catholic investing, goes further than ESG. It does not merely evaluate a company’s environmental or social record—it places the human person at the center of every economic decision.
Its reference point is not market trends but the unchanging moral principles of the Social Doctrine of the Church:
- the dignity of human life,
- the protection of the family,
- the pursuit of justice, and
- the care for creation.
While ESG frameworks shift over time and differ among rating agencies, faith-based investing rests on ethical principles that do not change. This provides moral stability and a level of ethical consistency that modern financial markets rarely offer.
Key Differences Between ESG and Faith-Based Investing
Although ESG and faith-based investing share certain goals—such as promoting positive societal impact—their ethical foundations and their understanding of the human person differ deeply.
The ESG approach seeks to identify companies that mitigate environmental and social risks. While useful, ESG criteria are often shaped by cultural trends, subjective interpretations, and widely varying methodologies across rating agencies.
Faith-based investing, in contrast, is rooted in enduring moral principles derived from the Church’s teaching. Its goal is not only to “avoid harm” but to actively pursue the common good, upholding human dignity, protecting life, and promoting integral human development.
ESG tends to view the individual as part of a broader economic system. Catholic investing sees the individual as the end, not the means, of economic activity.
Thus, it is not enough for a company to score well on sustainability metrics; it must also respect life and uphold Christian values in every aspect of its business.
Because ESG ratings can fluctuate significantly among different providers, coherence becomes difficult. Faith-based investing, by contrast, benefits from a stable and universal moral framework that does not shift with cultural currents or market pressures. In short, ESG may serve as a starting point for more responsible investing, but faith-based investing is the destination for Catholic investors who desire true coherence between faith and finance.
The Need for Professional Tools to Support Ethical Discernment
Applying a robust faith-based investing strategy requires professional investing tools capable of going beyond ESG.
At Altum Faithful Investing, we developed Altum Explorer, a stock screening tool designed specifically for Catholic investors and institutions. It analyzes thousands of companies worldwide and evaluates their alignment with Catholic values in investing.
With transparent methodology and rigorous ethical criteria, Altum Explorer enables the construction of 100% faith-aligned portfolios—combining ethics, financial quality, and advanced technology.
This discernment is not just about avoiding wrongdoing; it is about actively promoting the good, supporting companies that generate real positive impact on society and creation.
The Social Doctrine of the Church: A Moral Compass for Investors
St. John Paul II described the Social Doctrine of the Church as a moral guide for interpreting economic realities and shaping Christian action in the world.
From this perspective, investing is never a neutral act. Each investment decision expresses support—or rejection—of specific business practices and societal models.
Faith-based investing therefore excludes companies involved in activities contrary to Catholic teaching—such as abortion services, pornography, or embryo-destructive research—while promoting those that:
- contribute to the common good,
- uphold the dignity of work,
- protect creation, and
strengthen the family as the cornerstone of society.
Faith and Financial Returns: A Possible and Fruitful Union
Some believe that ethical investing or Catholic investing requires sacrificing financial returns. Yet experience shows the opposite: companies that respect human dignity, follow responsible governance practices, and act with long-term purpose tend to be more resilient and better positioned for sustainable growth.
For this reason, ethical investing and profitability are not opposing concepts.
Faith-based investing seeks precisely that harmony: strong financial stewardship rooted in Christian values.
Conclusion: Faith-Based Investing as a Deeper Alternative to ESG
ESG frameworks have helped move financial markets toward greater responsibility, but faith-based investing offers a more complete and cohesive path—one that integrates moral clarity, social justice, and a Christian vision of the human person.
For Catholic investors, investing is not only about generating returns; it is also about bearing witness through finance. Every dollar invested becomes an opportunity to promote the common good, support a culture of life, and live the faith in every aspect of economic activity.
