More people are choosing faith-based investing as they align their financial decisions with their values. According to experts, this approach is gaining momentum and emerging as a strong alternative to ESG (Environmental, Social, and Governance) investing.

Will Lofland, the Head of Investments Distribution at Guide Stone, shared his insights on the growing trend during an appearance on The Big Money Show. He explained that faith-based investing has experienced significant growth, particularly over the past three years. This increase in interest mirrors the rise of ESG investing, but many are now seeking investments that reflect their religious values.

“People are becoming more intentional with their money, especially since the COVID-19 pandemic. They’re realizing there are investment options that better align with their faith than mainstream strategies like ESG,” Lofland explained.

Guide Stone, a Christian financial services company established in the 1970s, has seen a noticeable rise in faith-based investments. Lofland emphasized that this growth accelerated during the pandemic, as individuals began reassessing their priorities and financial choices.

Faith-based investing allows individuals to invest in line with Christian values. Lofland mentioned that Guide Stone strives to help businesses, both secular and faith-based, implement practices that align with these principles. This includes ensuring companies treat their employees fairly, produce ethical products, and create policies that resonate with consumers.

Lofland also discussed how the adoption of faith-based investing spans different age groups. Younger investors have been quick to embrace this strategy, while baby boomers, who typically hold more wealth, are increasingly interested as well. He noted that older generations tend to favour companies with strict ethical guidelines, while younger investors are more open to supporting companies whose products have a positive societal impact.

He also addressed concerns about businesses not aligning their policies with consumer expectations. “We want to encourage companies to recognize the growing voice of consumers who care about these issues. It’s a significant voice, and it’s something that businesses need to understand,” Lofland said.

Lofland emphasized that businesses should focus on core principles and ethical practices that align with both faith-based values and consumer needs. As faith-based investing continues to rise, it presents an appealing alternative to traditional ESG investing for those looking to invest according to their beliefs.