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3iG key issues | Ethical investment | Venture Capital

3iG key issues

The alternative energy world requires capital investment for research and development of around $700 million in order to break out of the poverty trap

The International Interfaith Investment Group (3iG), like ARC itself, focuses on a number of key issues. Thus ARC works with forest management, agriculture, climate change and toxics for example - while 3iG concentrates on innovative investment with beneficial social and environmental consequences, such as alternative energy and micro-financing.

For example, WWF and associated economic advisors advised ARC/3iG that the alternative energy world required capital investment of around $700 million for research and developmentin order to break out of the poverty trap. Currently there is a severe lack of development funding for potential new projects.

. In response, 3iG then set about looking at which faith investors might be able to create a cluster group, which would take up this challenge. This is not out of a sense of charity. The faiths are investing in order to make a good return this does not have to be as instant a return as the secular market would usually require. The major faiths have the advantage of being able to look long term, so long as there is a serious possibility of a significant return in the end.

The cluster model

The cluster model offers the possibility of faiths collaborating with each other while still retaining their full autonomy. It enables groups to identify key issues for themselves and then to seek allies and partners to work on this. So for example, Islamic, Daoist and some Christian investors might work together on micro-financing for poor communities developing sustainable products, and they would do so on a non-usury (ie no-interest) basis as this reflects their shared values. Other faiths might cluster around water investment in India - a development project which might bring together Hindu, Jain, and Zoroastrian investors.

At no point does 3iG expect to be able to propagate a consensus view of all members, other than agreement of the broad definition of core values. Were this to happen however, 3iG would certainly assist such a development. The cluster allows diversity and does not demand unanimity.

It is a model that reflects the kind of flexible pluralism which many faiths now see as being the best way forward in the world in general.

The cascade effect

One other important aspect of the 3iG model is the cascade effect. Each faith joining 3iG has to agree that the socially responsible investment (SRI) policy it develops for the institutionally held funds of the faith will also be passed on to the laity of the faith.

The intention is to mobilise the private investing power of lay people who belong to a specific faith tradition by providing them with a pro-active faith based investment policy by which to guide their own investments. This effect opens the range of religious-inspired SRI to a completely new level. At the June 2002 meeting, Citigroup in their presentation on the impact of such a cascade estimated that:

Methodist Fund total holdings = $12b

Methodist faith members (8-15m adults or 5-7m families, annual income $30-70,000 per family, estimated investments savings $50-75,000 per family):

estimated Methodist constituent ‘Fund’ = $250-500b

Citigroup ‘ARC/3iG Conference: The Market Impact of ‘Faith-Consistent’ Investing’, Michael Even, CFA, June 19th 2002, New York
The scale of the potential impact is clear.

The 3iG model is perhaps one of the more dramatic examples of the interaction between religious worlds and the interaction between those worlds and the worlds of the secular value systems and networks.

The future

Major developments in 3iG are planned by the end of October, and will be reported in full on this website.

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Related information

Church Times, 22 November 2002:
How to do business for good
Religions have a big stick, says Paul Vallely. It’s the huge funds that they control.
United Methodists commit to ethical investments
The United Methodist Pension Board in the US is spearheading a drive to convert all the denomination’s funds to ethical investments, a move affecting up to US$40 billion of church assets
January 12, 2005:
Website for International Interfaith Investment Group (3iG)
3iG has now opened a website,