Investing for Eternity: What the Pope and Warren Buffett Have in Common

NEW YORK (TheStreet) -- If you think the Pope's recent comments are anti-capitalist, you might feel differently after considering the potential value in values-based investing.

"The faith-based investor has the longest investment time horizon: we're investing for eternity," said Laura Berry, executive director of the Interfaith Center of Corporate Responsibility (ICCR) and Wall Street veteran.

The ICCR includes over 300 member organizations -- many of which are faith based -- and controls over $100 billion in investable assets. It uses shareholder resolutions and proxy fight as well as meetings with management to convince corporations to include social values in their business models.

Their sentiment is not unlike that of billionaire investor Warren Buffett, who wrote in the 1988 Berkshire Hathaway (BRK.A) shareholder letter, "our favorite holding period is forever."

And there is compelling evidence that there is more to values-based leadership and investment than good feelings: It can also be a driver of long-term returns. Socially responsible indexes comprising companies that meet "environmental, social and governance" criteria perform on par with the S&P 500 and similar benchmarks on a return and risk basis.

"Socially responsible investing can achieve comparable performance over the long term without additional risk, despite using a smaller universe of securities" that meets such criteria, TIAA-CREF said in a report last September. Over a 10-year period ending in May 2014, TIAA-CREF found the MSCI KLD 400 Social Index, which tracks socially responsible domestic companies, returned 7.44% and experienced less volatility than the S&P 500, which returned 7.78%.

"One of the things that is always interesting and challenging is to channel the activist spirit, remembering that we are investors with fiduciary responsibilities to financial results," Berry said.

People attempting to generate wealth should keep in mind the "right use of natural resources, the proper application of technology and the harnessing of the spirit of enterprise," the Pope said in his congressional address on Thursday.

"Business is a noble vocation, directed to producing wealth and improving the world," the Pope said. "It can be a fruitful source of prosperity for the area in which it operates, especially if it sees the creation of jobs as an essential part of its service to the common good."

While the industries and issues that ICCR engages with run the gamut, the center has had a stronger focus on banking reform and climate change in recent years. The latter has captured a bigger spotlight since the Pope's recent encyclical, "Laudato Si, On Care for Our Common Home," in which he said that climate change is "one of the principal challenges facing humanity in our day."

The encyclical has had a significant impact, Berry said. "What has changed is that we now have much more powerful language connected with climate change and its impact on human communities than we have ever had before."

ICCR is currently urging 82 to improve climate-related practices. While the usual suspects are represented: Chesapeake Energy  (CHK) , Chevron (CVX) , and Ford  (F) , the organization has also targeted less obvious actors such as Bank of America (BAC) and JPMorgan Chase (JPM)  to ensure that environmental screens are part of their due diligence in extending financing. 

Effecting change is a tall order and most of ICCR's shareholder resolutions fail to pass, but the organization has the ear of executives in many Fortune 500 companies. In fact, ICCR was successful in getting JPMorgan to issue a report on its business ethics and standards in 2014 and has convinced Bank of America to take on a similar project.

"Politics and business have been slow to react in a way commensurate with the urgency of the challenges facing our world," the Pope wrote in his encyclical. "Although the post-industrial period may well be remembered as one of the most irresponsible in history," the pontiff held out hope that society will commit to meaningful change.

"He's a disruptive Pope," said the Rev. Seamus Finn, chair of ICCR. "He's reminding people that there's a lot of different issues that we need to pay attention to and that he's also expressing a basic optimism that when human beings come together and work on these issues that they come up with good solutions."

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