Hybrid Social Solutions is a social enterprise that provides rural, off-grid communities in the Philippines with access to high-quality, affordable solar technologies, and in doing so, brings about economic development and alleviates poverty.

This is much needed in the Philippines where more than 20 million people live without or have very little access to electricity.

Since its inception in 2010, Hybrid has provided 4,000 villages with access to energy, over 80,000 women with access to solar financing and created 330 jobs.

Funding Hybrid’s good works is Archangel Impact Capital, the first faith-aligned investment fund in the Philippines. Archangel’s purpose is “investing in Philippine faith driven entrepreneurs”.

This is just one example of what a faith-aligned investment looks like.

What is faith-aligned investing?

You may be familiar with responsible investing but have you heard of faith-aligned investing?

While responsible investing centres on ethical considerations  such as environmental, social and governance factors, faith-aligned investing is about integrating faith and biblical principles into investments in order to bring transformation. 

Strategies are typically focused on impact and commitment to supporting and caring for marginalised people through impact-focused organisations.

Archangel Impact Capital is just one of a growing number of faith-aligned investment funds. This investment approach has gained traction in other parts of the world including Australia and the US.

In Asia, it is still nascent but has significant growth potential due to rapid wealth creation and a growing Christian presence in the region, according to a two-part study conducted by BrightLight, an investment advisory and consulting investment firm.

The study was commissioned and funded by a network of private Christian investors in Asia seeking to encourage fellow believers to begin exploring the integration of faith and investments.

“Singapore, in particular, sits at the convergence point – motivated by faith and a desire to work for a common good,” said Sam Richards, Managing Director of BrightLight.

Going beyond tithes and gifts

Beyond tithing and giving, faith-aligned investing seeks to bring transformation and advance God’s kingdom through the investment of resources.

“In secular investing, the goal is to maximise returns and profitability to give generously,” Sam said. “But there is a pattern of bifurcation – almost as if though God is the purposeful owner of the tithe, the 90% or the 80% or the 70% belongs to us.”

Instead, stewardship is understanding that God is the owner of all of our resources.

“We are to consider God, not just in our giving, but in our investments,” he added. 

In the parable of talents in Matthew 25:14-30, three servants were entrusted by the master with talents that never belonged and would never belong to them.

Two of the servants invested and grew the money, the third buried the money and did nothing with it. He was called a “wicked, lazy servant” by the master (v. 26).

The study identified three failures of the third servant: Failure to take any action with the money, not even placing it in a bank to earn interest; failure to take risks; failure to recognise his master’s character and priorities.

“In faith-aligned investing, we are talking about stepping up not just our investment processes but our engagement with the Master,” Sam stated.

“In the parable, the master pointed out that the third servant ‘knew’ what the master wanted and yet he went the other way.

“We should ask ‘Why am I investing? What is the transformative purpose of this stewardship?’ Essentially, it’s investing in and financing the change you want to see. It is understanding what God put on your heart and what you are being called to do,” Sam said.

How to navigate faith-aligned investing?

Even with solid theological understanding of financial stewardship, faith-aligned investors still face the challenge of having to assess both financial and social value of an investment.

While tithing and giving is widely taught in Christian circles, the study revealed that many asset owners find themselves navigating the journey of faith-aligned investing with no clear frameworks, established networks or proven investment solutions tailored to their context.

This is where a community of supportive ecosystem – with educational resources, adviser networks and investment products – is essential in driving faith-aligned investments in Asia.

BrightLight is developing an ecosystem linking institutional clients and advisers, family offices, asset managers and faith-based initiatives such as Faith-Driven Investor and Journey of Generosity.

“It is reasonable to expect a matured ecosystem in three to five years and a credible one in five to seven years,” Sam told Salt&Light.

“The hardest part is at the beginning, where the heart rendering happens,” he said. “Then the brave few start to take action – it takes time, courage, boldness – and then others follow.”

Positive signs emerging

According to the study, the market size in the US for faith-aligned investing is about US$130 billion across diverse asset classes: Listed equities such as shares, fixed income instruments including bonds and treasury securities, property and private equity and/or debt. 

In Asia, however, investors have far fewer options that can meet their requirements. Current solutions for faith-based investments focus on private equity and debt. 

“The challenge for investors in this region is that these funds are based in the US and therefore inaccessible. This creates a significant gap between researching available options and being able to access suitable investment vehicles,” said a private investor in Singapore. 

Still, positive signs are emerging in the Asian market.

BrightLight and local firm Covenant Capital are set to launch in Singapore, Asia’s first faith-based public equity fund that will be available to global faith-based fund managers, Sam told Salt&Light. 

The study noted an increasing number of managers in Asia, especially in the private equity and venture capital space. Apart from Archangel, others include Abound Capital (Singapore), Asia Companion Fund (Singapore), Beneficial Returns (Singapore), Eagle Ventures (Singapore), Ethos Fund (Vietnam), Garden Impact Fund (Singapore), PrimeMovers Equity (Singapore) and Sovereign’s Capital (Indonesia).

Additionally, an emerging body of financial advisers is considering investments more holistically to help clients integrate faith and stewardship. 

Investors are also asking more concrete questions around definitions, frameworks, investment solutions available and assessments of faith-aligned investments, Sam noted. 

As the faith-aligned investment movement gathers momentum, success would look like “advisers adopting redemptive practices, helping and guiding investors discern true stewardship. This would translate into believers investing in products that deliver Kingdom impact, while getting financial returns that are appropriate,” he said. 

“A successful outcome would be to demonstrate to the world that this form of investing is sustainable, is authentic and ultimately purpose driven.”

Download the study here.

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