Faith-Based Investing and Religious Liberty

Recommended Reading

A new paper by Amelia Miazad addresses the role of faith-based investors—which she defines as Christian individuals and organizations who integrate religious beliefs into their investment decisions—in the development of corporate social responsibility activism and values-based investing since the 1970s. Miszad focuses on what she claims is the often overlooked role of Christian faith investors in American financial markets and their relationship to ESG (Environmental, Social, and Governance) investing.

The paper makes two main contributions: First, it provides a comprehensive descriptive account of faith investors in the US, demonstrating their heterogeneity and impact across the investment landscape. Second, it analyzes how religious liberty doctrine (including the First Amendment and Religious Freedom Restoration Act) protects faith-based investment practices from government interference when rooted in sincerely held religious beliefs.

The author concludes that the current policy agenda that simultaneously strengthens religious liberty while restricting ESG investing creates a fundamental contradiction, as many faith investors' activities would be protected by the First Amendment and RFRA from anti-ESG legislation.

The paper will be of interest to scholars and practitioners laboring at the intersection of faith and finance, corporate social responsibility and ESG, and in areas such as affinity fraud. Although I harbor doubts about some of the assumptions in the paper and offer some criticisms, I nevertheless think it’s worth a read.