Investing in Jewish Values
A new socially responsible portfolio option with the Jewish Community Fund invites investors to put their money where their mouth is.
“Socially responsible investing is a core expression of how we are trying to live in the world.”
You can hardly enter a Jewish space without some discussion of “Jewish values.” From advocating for racial justice to raising money and awareness for immigrants or food security to warning about climate change, Jewish values have largely come to be aligned with liberal American values. According to the Jewish Electorate Institute National Survey of Jewish Voters, the top two issues of concern among Jewish voters are climate change and voting rights.
At the same time, many Jewish organizations hold trusts and endowed funds, and those accounts are invested in stock portfolios that may not resonate with the socially just causes championed by the organizations themselves.
“At Congregation Beth Shalom, we’re very much interested in living life through Jewish values, and we have a strong social action community which is dedicated to social justice,” says Mark Stiefel, president of the North Seattle Conservative synagogue.
So Stiefel approached the Jewish Federation of Greater Seattle, where the synagogue’s endowment is housed as part of the Jewish Community Foundation, and asked them to consider changing up Beth Shalom’s stock portfolio to ensure the funds aren’t invested in companies and industries antithetical to the community’s values. “It made sense that our endowment investments are also invested in a manner that is socially responsible,” he said.
With a $1 million initial investment, the Federation — along with Beth Shalom and other partners to be announced — is launching an environment, social, and governance (ESG) strategy in addition to its other balanced and aggressive strategy options. “We have enough critical mass to move forward, and the goal is that the Federation will make this available to other agencies and individuals,” Stiefel, who now also serves on the Federation’s investment committee, says.
Socially responsible investing isn’t new, but it’s growing in popularity particularly with the rise in climate concern. One way to accomplish this is through a negative screen — weeding out “bad actors,” like fossil fuels or tobacco companies. Increasingly, investors are also looking to develop portfolios that align more holistically. “Do they have equal rights, are they paying fairly, are there conflicts of interest, political contributions,” explains Elizabeth Breaden, a senior client portfolio manager with SEI, which handles the Federation’s portfolios.
Jlens, a Jewish impact investing network that “aims to ultimately inspire the alignment of 100% of communal investment capital with Jewish values to achieve positive impact,” guides the thinking with lists of “kosher companies” measured on their level of obligation to coexistence, society, the worker, the environment, ethical business, and support for Israel. They create the portfolio, and SEI considers it as part of the overall strategy. Breaden notes that the Federation’s investments include a BDS screen; that is, they don’t invest in companies that support the boycott, divestment, and sanctions movement against Israel.
While the portfolios are always in flux and may not capture every value important to every investor, “this portfolio we’re launching is a nice option, because it’s a nice way to invest in an ESG portfolio. We wanted to keep it broad based, and then as interest grows and we gain investors in the dedicated fund, [we can] focus on a more specific theme,” Breaden says.
“For the Federation, it was important to bring this strategy to our community sooner than later,” says Tony Abrams, the Federation’s former Community Foundation director. It’s also a way to put the Federation’s values out front, adds his successor, Rachel Rosenman.
Rabbi Jill Borodin of Beth Shalom sees the connection to tradition. “Just as Jews can’t make money according to halacha from the mixing of meat and milk, we wanted to also make sure we were not making money from something not in accordance with our values,” she says. “Socially responsible investing is a core expression of how we are trying to live in the world.” (The synagogue is further trying to live its values by paying all staff a fair Seattle-standard living wage, not just the standard minimum wage.)
But does it pay off? Can socially responsible investments possibly pay the dividends rewarded in more destructive but profitable sectors of energy and tech? “At the end of the day, it shouldn’t make a different in performance,” Breaden says.
Still, socially responsible investments are more about the values and less about the returns. Much of the argument comes down to whether to divest from fossil fuel industries, which not only have high rates of return but also, in some cases, are shifting toward sustainable practices. The current ESG is not fully divesting from the fossil fuel industry. As Breaden puts it, “we want to hold onto the ‘good students.’”
“There are people in our synagogue and in our Jewish community saying that you should not be investing in companies that invest in fossil fuels,” says Stiefel. “Is that the majority opinion? That has to be worked out.”
In time, those who invest through the ESG portfolio will have a say in what the invest in and divest from. Now is the time for encouraging other socially conscious organizations to put their money where their mouth is.
“The way I look at it, we have to start somewhere,” says Steifel. “As there is more money to be invested, there will be more options.”
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