Lake Orion parishioner advises clients on ‘impact investing’ as a Catholic

Birmingham — The world is getting ever more complex.

With the upcoming election, conflicts around the world and an economy that is growing at an unsteady pace, it can be hard to determine where to place one’s trust.

In the world of finance, full of acquisitions, mergers and conglomerates, the confusion can be increased tenfold.

That’s where people like David Gardiner come in.

Gardiner, a member of St. Joseph the Worker Parish in Lake Orion, has been a financial adviser with Merrill Lynch in Birmingham for five years, presenting his clients with options to invest with the confidence of sound Catholic social teaching.

“Moral investment has probably been part of my thesis or idea with clients when the time arises for some years,” Gardiner said.

With “moral investing,” Catholic investors can arrange a system with their financial advisors to try to avoid investing in companies that engage in activities opposed to Catholic teaching, rather than investing for the sole purpose of pursuing higher rates of return.

“Sometimes people just worry about the rate of return, but I take it a step further and ask, rate of return at what cost?” Gardiner said.

While it’s good to avoid companies that engage in harmful practices where possible, sometimes an investor can also use his or her standing to influence change from the inside, Gardiner said.

With “impact investing,” investors can work with financial advisers in establishing a strategy in which shareholders can use their voting power to shape decisions made by the companies in which they hold shares, Gardiner said.

“The Gospel said, you can’t just disregard people,” Gardiner said. “You can’t just disregard companies because they’re doing bad. It’s our job to make sure there is a type of change.”

At Merrill Lynch and other investment firms, Gardiner said, investors have the option to have their shares voted according to guidelines set by the Institutional Shareholder Services, a proxy voting service that votes in accordance with shareholder’s preferences, which can include Catholic moral teachings.

In each investment decision, Gardiner said it’s important to educate oneself about the companies in which they’re investing.

“If you want that change, you have the right to vote your proxies,” Gardiner said. “If you vote your proxies, you have the ability to instill your thoughts, your mission into the company. If you look as a Church to the companies we’re investing in, showing our Catholic faith through our proxies, you might see social change.”

Gardiner said moral investing is a way to be actively Catholic in a passive world, taking the initiative to create change.

“We live in a very passive world, where technology has taken over our lives in somewhat good ways,” Gardiner said. “But it also makes us more passive. It’s not easy to look into companies you own, not easy to voice your opinion. But if you go through life passively, you have to sit through life and be passive on the outcome, and I don’t think any of us want that.”

When Gardiner introduces clients to the ideas behind investment morality, some clients worry about the overall rate of return for their investments, but Gardiner cites a recent report by McGraw Hill showing the S&P 500 Catholic-values index has outperformed the S&P 500 by a small amount over the course of eight years.

“The way I look at it, I don’t say the S&P 500 Catholic-values index is going to outperform, I’m saying this completely destroys the argument you’re going to give up return because you’re not going to destroy your rate of return for having a Catholic-value investment strategy,” Gardiner said.

In the long run, though, Catholic-values investing and impact investing isn’t just about returns.

“If everyone with a small voice would rise up and demand change, think of what they could accomplish,” Gardiner said. “You can’t expect things to change, but do nothing about it. There is one thing I say all the time with clients: They have to, and I have to, put our heads on pillows every night.”

Mass for Commerce

The Archdiocese of Detroit’s 23rd annual Mass for Commerce will take place at 8 a.m. Oct. 19 at Detroit’s Sacred Heart Major Seminary. Catholic working professionals are invited to attend the Mass, which will include a talk, luncheon and opportunities for networking.