Faith Investors

Minnesota Law Review Vols. 106:2 onward (2021-present) Minnesota Law Review Vols. 106:2 onward (2021-present)

Faith Investors Faith Investors

Amelia Miazad University of California, Davis, [email protected]

Article 4

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It is the best of times for advocates of religious liberty and the worst of times for Environmental, Social, and Governance (ESG) investors. Over the past few decades, the Supreme Court has expanded protections for religious individuals, organizations, and corporations by interpreting the First AmendmentÊs Religion Clauses evermore expansively. Meanwhile, for ESG investors, times are grim. Conservative lawmakers have vowed to „eradicate this evil pollutant from our markets‰ and are making good on their promise with a wave of legislation, investigations, and congressional hearings·aimed at preventing investors from incorporating environmental and social issues into investment decisions. The Securities and Exchange Commission (SEC) is on board too, construing SEC Rule 14a-8 to kneecap investorsÊ ability to submit any „non-binding‰ shareholder proposal, which includes proposals on environmental and social issues.

Expanding religious liberty while constraining ESG investing may appear to be a consistent policy agenda. It is based on the familiar but flawed assumption that religious businesses and investors are aligned with conservative values·and not with a

„woke‰ agenda. So, when Congressman Jim Jordan sent a wave of letters to scrutinize investors who joined Climate Action 100+, an investor initiative to address climate change, he ended up, perhaps unintentionally, targeting dozens of churches and Christian organizations. He even raised the ire of the U.S. Conference of Catholic Bishops, which expressed its concern that the Chairman appeared to disregard „the freedom of religious groups to make investment decisions.‰

This Article intervenes at this critical juncture to tell the story of Christian faith investors in the United States. It shows that Christian faith investors have been integrating environmental and social issues into their investment decisions since at least the eighteenth century. They were also in the vanguard of shareholder advocacy in the early 1970s on issues including apartheid, gun violence, pollution, and gender equity. Today, they remain active shareholders, are remarkably diverse, and span ideological divides. This rich descriptive account, the first in the literature, highlights new questions at the intersection of religious liberty doctrine and corporate and securities law. By applying religious liberty jurisprudence, including the First AmendmentÊs Religion Clauses and the Religious Freedom Restoration Act, to faith investing practices, this Article reveals a growing tension between religiously motivated investment decisions and anti-ESG laws and regulations that constrain valuesbased investing.

TABLE OF CONTENTS

Introduction ........................................................................... 2251 I. The Faith Investor Ecosystem ......................................... 2264 A. The Key Players ....................................................... 2265 1. Asset Owners ....................................................... 2266 2. Asset Managers ................................................... 2267 3. Investment Advisors ............................................ 2269 4. Data Providers and Standard Setters ................ 2270 5. Proxy Advisors ..................................................... 2271 6. Investor Networks and NGOs ............................. 2272 B. Growth in Faith-Based Investing Products and Services ......................................................................... 2273 II. Faith Investors: Governance and Decision-Making ...... 2276 A. Foundational Principles for Faith Investors .......... 2277 1. Sources of Authority ............................................ 2277 2. Ownership, Capital, and Stewardship ............... 2278 3. Spiritual Materiality and Human Flourishing .. 2280 4. Long-Term Time Horizon .................................... 2280 5. Trade-offs and Risk ............................................. 2281 B. Case Studies ............................................................. 2281 1. The United Methodist Church and Wespath ..... 2282 2. The Catholic Church and Laudato Si ................. 2284 III. A Brief Overview of Religious Liberty .......................... 2287 IV. Religious Liberty and the Protection of Faith-Based

Shareholder Engagement ........................................... 2294

A. Overview of Faith-Driven Shareholder Engagement

......................................................................... 2294 B. Unique Attributes of Faith Investors ...................... 2297 C. The Present Moment: Shareholder Engagement Spans

the Ideological Divide ............................................... 2307

D. Recent SEC Rulemaking and Legislation Threaten

Shareholder Proposals ............................................. 2310 E. Shareholder Proposals and Religious Liberty ........ 2314

1. Shareholder Engagement as Religious Practice

................................................................... 2315 2. RFRA Protection for Shareholder Proposals ...... 2317 3. State-RFRA Protection for Shareholder Proposals

................................................................... 2320 V. Religious Liberty and Faith-Based Ethical Screening .. 2321 A. Ethical Screening ..................................................... 2322 1. Global X S&P 500 Catholic Values Index .......... 2324

2. Timothy Plan ....................................................... 2325 3. Inspire Advisors ETFs ......................................... 2327 4. SovereignÊs Capital Flourish Fund ..................... 2329

B. Religious Liberty Doctrine Protects Ethical Screening

by Church Pension Plans ......................................... 2331

C. Religious Liberty Doctrine May Protect Faith-Aligned Mutual Funds from Greenwashing Claims by the SEC

......................................................................... 2339 Conclusion ............................................................................. 2343

INTRODUCTION

In the United States, two forces appear unstoppable: an ironclad defense of religious liberty1 and a growing effort by federal and state lawmakers to eradicate „an evil pollutant,‰ the Environmental, Social, and Governance (ESG) investment movement, from U.S. businesses.2 The barrage against ESG or „woke investing‰ pervades federal and state laws, executive orders, agency rulemaking, and congressional hearings.3 A series of executive orders illustrate this point·in December 2025, President Trump issued an executive order directing federal agencies to heighten oversight of proxy advisory firms that issue recommendations on environmental or social issues.4 The administration has also shown commitment to promoting religious freedom with President Trump issuing the executive order, Eradicating Anti-Christian Bias, in early 2025, pledging „to protect the religious freedoms of Americans and end the anti-Christian weaponization of government.‰5

Religious liberty proponents and ESG critics seem like natural allies; strengthening religious liberty weakens progressive ESG values, or so the story goes. Landmark religious liberty cases, such as Burwell v. Hobby Lobby Stores, Inc. (Hobby Lobby) and Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, reinforce this seemingly straightforward account.6 Indeed, the Supreme CourtÊs steadfast expansion of corporate religious liberty means that the civil liberties of third parties, and corporate fiduciary duties, are secondary concerns.7 This wellworn script has shaped the popular, policy, and scholarly debate.8 There is truth to this account. In Hobby Lobby, the Court found that the corporationÊs founders, the Green family, had „sincerely held religious beliefs‰ that opposed contraception and were therefore entitled to an exception from federal law.9

But another story remains virtually untold·Christian clergy and Catholic nuns filed the first shareholder proposals on apartheid, racial justice, gun violence, and pollution in the early

1970s.10 Even before that, in the late 1960s, „faith investors‰11 attended shareholder meetings to protest the Vietnam War.12 Today, these faith investors remain the staunchest advocates for environmental and social issues, and continue to embrace ESG investing strategies.13 On November 7, 2024, the Interfaith Center for Corporate Responsibility (ICCR), founded in 1971 and now the largest coalition of faith investors,14 issued a statement: „We are clear-eyed about the potential challenges we face with a second Trump Presidency, and we reaffirm our commitment to standing in solidarity with . . . women, people of color, immigrants, LGBTQ people, low-wage workers, and others[.]‰15

Congressman Jim Jordan, a fierce advocate for religious liberty, has had to confront this tension.16 In July 2024, the House Judiciary Committee, which Jordan chairs, issued dozens of letters to companies and investors „about their involvement with

the woke ESG cartel Climate Action 100+.‰17 The judiciary committeeÊs wide-ranging investigation targeted pension funds like CalPERS and asset managers like BlackRock.18 Perhaps to the surprise of Congressman Jordan himself, however, it also reached Christian institutions, from the Sisters of Saint Dominic of Caldwell to the Pension Board of the United Church of Christ.19 As one Catholic organization pointed out, Congress had targeted „close to [twenty-five] communities of Catholic sisters.‰20

Several faith leaders responded, emphasizing that investment decisions are an expression of their Christian beliefs. For example, the Reverend Jihyun Oh of the Presbyterian Church stated: „[The] General Assembly of the Church recognizes that climate change is . . . one of the most pressing moral and theological problems. We come to this position as a theological matter and engage the public policy debate . . . as faithful expression protected under the First Amendment[.]‰21 Likewise, the U.S. Conference of Catholic Bishops (USCCB) criticized Jordan,

stating „that the freedom of religious groups to make investment decisions informed by their faith‰ appears to have been disregarded by Congress.22 Indeed, the USCCBÊs „Socially Responsible Investing Guidelines‰ commit to use shareholder advocacy to advocate for certain ESG issues, such as climate change.23 More recently, a group of faith investors, including ICCR and United Church Funds, has joined secular investors and filed a lawsuit against the State of Texas to block enforcement of Senate Bill 2337, a Texas law that restricts how investment advisors and nonprofit organizations can incorporate ESG decisions into investments.24 As the President and CEO of United Church Funds explained, „[o]ur approach to investing has always joined faith and fiduciary duty.‰25

Given religious groupsÊ embrace of ESG, it appears that lawmakers who advocate for religious liberty, but attack ESG, may soon be hoisted by their own petard.26 This Article intervenes at a critical juncture and puts new actors in the spotlight: faith investors.27 In doing so, it reveals that the constitutionally protected religious liberty of faith investors may be in tension with

efforts by the Trump administration and current SEC, Congress, and state attorneys general and lawmakers to end ESG investing.

The Article makes two primary contributions. First, it provides a rich descriptive account of faith investors in the United States, the first in the literature.28 This detailed account is important because it establishes that faith investing is a longstanding form of religious practice, providing the foundation for the ArticleÊs principal analytical contribution: that restrictions on ESG investing, including faith-based investment practices, raise constitutional concerns and may infringe on the religious liberty of faith investors.

Recognizing the current Supreme CourtÊs favored „history and tradition‰ approach to religious liberty cases, this Article devotes significant attention to the historic practices of religious investors and explains why legislatures, courts, and other government actors have traditionally deferred to such practices.29 Faith investing in the United States dates at least to the eighteenth century, when Methodist leader John Wesley urged parishioners to avoid investing in alcohol, tobacco, weapons, the slave trade, and other industries that were not aligned with Methodist teachings.30 In 1947, the National Council of

Churches (NCC) began examining the relationship between investing and biblical values31 and ultimately directed its member churches·whose assets were estimated at $160 billion·to exclude firms that racially discriminated, reinforcing the idea that churches, as shareholders, could influence corporations.32 Portfolio screening led to socially responsible mutual funds·the Pax World Fund, founded in 1971 by anti-war United Methodist ministers, was the first socially responsible mutual fund in the United States and remains among the worldÊs largest.33

The anti-war and civil rights movements ushered in shareholder activism on social issues.34 In the 1970s and 1980s, faith investors filed the first proposals on racist and sexist advertising, human rights abuses, and greenhouse gas (GHG) emissions.35 While many assume that diversity disclosure is a contemporary „woke investor‰ priority, faith investors have been filing such proposals since at least 1972.36 This is not just yesterdayÊs news·Exxon Mobil recently lamented that ICCR members filed forty percent of all proposals at Exxon over the past

decade.37 In response to this increase in faith investor shareholder engagement and voting, the two largest proxy advisors, Institutional Shareholder Services (ISS) and Glass Lewis, offer Proxy Voting Guidelines for Catholics and Christians.38 Faith investors have shaped, and continue to shape, ESG investing.39 In addition to shareholder engagement, there is momentum behind faith-driven investing,40 and a recent proliferation of faith-aligned investment products and services, spanning denominations.41 There are 166 Christian mutual funds and exchange-traded funds (ETFs) and Inspire Advisors (Inspire), the worldÊs largest provider of Christian ETFs, is a rapidly growing company.42 Its suite of faith-based ETFs bear tickers, such as WWJD (What Would Jesus Do?), BIBL, and GLRY.43 While Inspire uses ethical screening, other faith investors use highly active and novel approaches to curating faith-aligned portfolios.44 SovereignÊs Capital stands out·its ETF, launched in 2023, includes companies with Christian CEOs and faith-aligned

cultures.45 This is not a fringe movement·major companies, from PayPal to American Airlines, rank among the top faithaligned companies, and more than 400 S&P 500 incorporate faith into diversity, equity, and inclusion (DEI) programs.46

By narrowing the focus to Christian investors, it sheds light on the myriad values within this community. These values span the United Methodist Church (UMC) and the Catholic Church, whose net-zero climate commitments are rooted in scripture about care for creation, to Christians who interpret the Bible to give humans dominion over Earth, consistent with a „drill-babydrill‰ policy agenda.47

This detailed descriptive account shows that faith investing is a longstanding form of religious practice and expression across Christian denominations and supports the ArticleÊs principal, analytical contribution. It applies the religious liberty doctrine, including the First AmendmentÊs Religion Clauses and the

Religious Freedom Restoration Act (RFRA),48 to two types of faith investing: shareholder engagement by religious orders and ethical screening conducted by church pension plan administrators and providers of Christian mutual funds.49 These practices are the most salient examples of faith investing practices under threat by existing and proposed state and federal law and SEC rulemaking.

The anti-ESG movement has targeted ESG investors by vowing to prevent them from filing shareholder proposals on matters of social policy. The current SEC, under Chairman Atkins, has already advanced an interpretation of Rule 14a-8 that would treat precatory shareholder proposals, including environmental and social proposals, as outside the scope of permissible shareholder action under Delaware state law.50 Yet, such restrictions would fail strict scrutiny under the First Amendment and RFRA because the government cannot demonstrate that a blanket ban on non-binding proposals both serves a compelling state interest and demonstrates the least restrictive means for achieving that interest.51

With respect to church pension plans, there are several categories of laws that constrain faith investing practices, including state trust laws that impose secular fiduciary duties on church pension plans and an emerging wave of anti-ESG laws that require fiduciaries to consider only financial matters in investments.52 Recognizing a conflict with the Establishment Clause, Congress opted to exempt church pension plans from the Employee Retirement Income Security Act (ERISA), the federal legislation that applies to private pension plans.53 But numerous states have enacted laws that impose fiduciary duties on pension plan administrators, including church plans.54 These state laws mischaracterize church plans as agents of their beneficiaries, rather than principals, or religious institutions that invest their own money.55 But, more importantly, state laws that impose fiduciary duties on church plans violate the religious liberty of the institutions that administer them. This is consistent with the only case that has addressed this issue, Basich v. Board of Pensions, which deferred to the decisions of a church plan that divested from apartheid South Africa for religious reasons.56

Recent anti-ESG laws exacerbate this tension by limiting investorsÊ ability to consider environmental and social factors.57

These laws are neutral and do not target religion. Indeed, their proponents may not even realize that faith investors engage in ESG investing, but these laws unduly burden faith investorsÊ free exercise of religion by preventing them from incorporating values into investment decisions. Applying religious liberty jurisprudence to faith investorsÊ activities, this Article illuminates the tension between anti-ESG laws and religious liberty. Finally, it introduces a new term, „faith-washing,‰ and examines the scope of the SECÊs enforcement authority to regulate faith investorsÊ products in the same way that it regulates greenwashing.58 This issue is particularly salient because the SEC fined Inspire for failing to adhere to its „biblically responsible investing‰ criteria.59

In sum, this Article concludes that faith investors are distinct from secular investors and, accordingly, may engage with or divest from companies based on alignment with values. A faith investor may choose to divest from a company that supports abortion or refuses to commit to net zero. Whether the values are conservative or progressive, these ultimately reflect religious decisions that may be protected irrespective of corporate law fiduciary duties, trust law, securities law, or anti-ESG laws that may constrain secular ESG investors.

This Article contributes to important debates in corporate and securities law, including corporate religious liberty,60 the legitimacy of ESG and investor engagement on social issues,61 the limits of the shareholder wealth maximization norm,62 the fiduciary duties of asset managers,63 and the scope of the SECÊs regulatory authority to both constrain shareholder proposals and regulate greenwashing.64 By examining the unique role of faith investors, it adds a new dimension to these longstanding debates.

This Article proceeds as follows. Part I sets the stage, provides a brief history of faith investing, and describes the „who‰

and the „what‰ of faith investing. Part II explores faith investorsÊ governance and decision-making processes through case studies. Part III introduces religious liberty doctrine and foregrounds the remainder of the Article. Part IV examines the policy implications for shareholder engagement and argues that recent efforts to constrain ESG investing infringe upon the religious liberty of faith investors. Part V applies religious liberty doctrine to ethical screening, illuminating the limitations of recent state and federal laws that require investments to consider purely financial interests. The Article then briefly concludes.

The anti-ESG movement and faith-based investing are both rapidly expanding. By introducing the growing tension between them, this Article aims to spur scholarly and policy debate on the extent to which restricting values-aligned investing infringes on the religious liberty of faith investors.

I. THE FAITH INVESTOR ECOSYSTEM

While faith investors have long integrated religion into investment strategies, we are witnessing a surge in faith-driven investors and products.65 This encompasses public and private markets and spans asset classes, including equities, bonds, real estate, and cryptocurrencies.66 To set the stage, this Part maps out the faith investing ecosystem. Section A introduces the key players; Section B turns to investment products and services.

As with the secular investing community, there is a broad range of faith-based asset owners and advisors. The following table outlines the categories of key players in faith-based investing, each of which is discussed in turn.

Table 1: The Key Players in Faith-Based Investing

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Asset Owners

Asset Managers

Investment Advisors

Data Providers

Proxy Advisors

An entity (for-profit or non-profit) that administers investment on behalf of a faith-based asset owner.

An advisor who serves faith-based asset owners or managers.

Organizations that provide services in investment management, research, and analytics.

Organizations that provide research and voting recommendations.

Investor Networks and Non-Governmental Organizations (NGOs)

Catholic Investment Services Inc., Christian Brothers Investment Services, Crossmark, Donor Advised Foundations

Certified Kingdom Advisors, Guidestone, Inspire Investing

Bright Light Impact, Mercer

ISS, Glass Lewis, Bowyer Research

1. Asset Owners

Some of the largest asset owners are faith-based, including churches, universities, and pension plans. Their assets range from modest six-figure totals to tens of billions of dollars. A study by Saïd Business SchoolÊs Faith-Aligned Impact Project estimates the assets owned by Christian institutions at $260 billion.67 But that number is necessarily under-inclusive. Given their global scope, a reliable estimate is challenging.68 Even still, we know that their scale is massive·just consider that the Catholic Church, with 1.36 billion members globally, has a net worth estimated at $73 billion.69

Though the total value of all faith investorsÊ assets is impossible to pinpoint, the assets under management of faith-based pension funds are far more transparent. The largest is Wespath, which serves over 100,000 Methodist clergy and employees and has nearly $26 billion in assets under management.70 Similarly, the Church Pension Fund (CPF), which administers pension plans for the Episcopal ChurchÊs 39,000 employees, manages about $17 billion in assets.71 And the Board of Pensions of the Presbyterian Church serves 65,000 individuals and manages roughly $12.5 billion.72 As this Article will explore later, faithbased pension funds, commonly referred to as „church plans,‰ face unique fiduciary duty challenges.73

Beyond pension funds are Christian banks and credit unions that adhere to biblical values.74 Though subject to the same banking regulations as secular banks, many have faith-based charters. For example, Christian Community Credit Union·established in 1957 as American Baptist Ministers Credit Union· is one of the largest Christian credit unions.75 Its mission is to „serve Christ followers to live and give more abundantly,‰ while its Statement of Faith makes clear that the „Bible is . . . the final authority on all matters of faith and practice.‰76

2. Asset Managers

Faith-based asset owners often delegate portfolio management to asset managers. For instance, Wespath delegates its asset management to both secular (BlackRock and Bank of New York Mellon) and faith-based asset managers.77 Secular asset managers also offer customized services to faith investors, such as BlackRockÊs Catholic Charities and Growth Income Fund.78 But faith-based asset managers exclusively offer faith-aligned asset management services and products, including a growing suite of 155 mutual funds and ETFs.79 Much like the broader asset management industry, there is a „Big Three‰ phenomenon–the „largest 3 faith-based asset managers account for 62% of total AUM, and the top 10 managers control 92% of the market.‰80

Table 2: The „Big Five‰ Faith-Based Asset Managers

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$23 billion85

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$9.2 billion88

198189

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AAsssseett MMaannaaggeerr aanndd MMiissssiioonn PPuurrppoossee SSttaatteemmeennttss Thrivent (Lutheran) „WeÊve inspired to make choices financial guided by their Christian values.‰81 GuideStone Funds (Baptist): „Our Calling is to Serve Christ in All We Do. GuideStone has strived for more than 100 years to provide support to evangelical Christians as they live out their faith.‰84 Christian Brothers Investment Services (Catholic): CBIS „serve[s] Catholic investors who are looking to transform the world.‰87

$6.4 billion91

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$6.7 billion94

198795

Eventide (Anabaptist): „We strive to honor God and serve our clients by investing in companies that create compelling value for the global common good.‰90 Crossmark (various ChrisDenominations): tian „Crossmark exists to inspire and equip our clients, community and employees to go further in their pursuit of all that God has for them.‰93

Thrivent, which refers to itself as „the original purposebased company,‰ dominates the field. This is not only because it was established in 1902, but also because it was the first faithbased asset manager to offer insurance products (1962) and mutual funds (1970).96

3. Investment Advisors

Faith investors rely on registered investment advisors who align investments with biblical teachings. As demand for these intermediaries grows, financial advisors are opting for a „Certified Kingdom Advisor‰ (CKA) designation, which signals their

ability to „integrate biblical wisdom‰ into their practice.97 This designation, issued by Kingdom Advisors, was launched by Ron Blue, a pioneer of faith investing who also founded Ron Blue Trust, the largest Christian financial planning firm.98 The demand for Christian advisors is growing, prompting secular financial services companies, including Merryll Lynch, Goldman Sachs, Fidelity, and Wells Fargo, to add CKA advisors to their teams.99

4. Data Providers and Standard Setters

Faith investors rely on data providers to evaluate companies against the faith communityÊs values. In addition to traditional data providers, like Morgan Stanley Capital International or Sustainalytics, faith investors rely on faith-specific data providers. For example, the Biblically Responsible Investing Institute (BRII) was founded in 1997 to address a research void for „Christians and social conservatives.‰100 BRII assesses publicly traded companies to determine whether they are profiting from ten areas that „conflict with biblical values,‰ including abortion, alcohol, anti-family activity, bioethics, human rights, low-income financial services, pornography, tobacco, and the „homosexual agenda.‰101 BRIIÊs methodology relies on SEC filings, tax records, and communication with management.102 The group then markets its research to institutions, institutional investment advisors, mutual funds, and retail investment advisors.103

In addition to data providers, faith-aligned standard setters are developing bespoke metrics and measurement tools to „capture spiritual transformation alongside social outcomes.‰104

5. Proxy Advisors

As Part IV will discuss, faith investors have a long history of active ownership and shareholder engagement.105 To facilitate shareholder voting, many faith-based asset owners rely on their own proxy voting guidelines. Proxy advisors have also begun offering Catholic and Christian faith-aligned voting guidelines.106 For example, in 2020, ISS launched its Catholic FaithBased Proxy Voting Guidelines, noting that „faith-based and other socially responsible investors have dual objectives: financial and social,‰ which translate into their proxy voting.107 The guidelines are informed by the Catholic BishopsÊ Pastoral on Economics, the BishopsÊ Socially Responsible Investment Guidelines, and policies developed by members of ICCR.108 They are also, broadly speaking, aligned with ESG investors·for example, with respect to GHG emissions, the guidelines ask shareholders to vote against the chair of the board if the company is not taking steps „to be aligned with a Net Zero by 2050 trajectory.‰109

Similarly, the Guidelines recommend shareholder voting promoting racial and gender diversity, protection of LGBTQ eminitiatives countering ployees, and reports on company

workplace sexual and gender-based discrimination.110 Interestingly, for gun violence prevention, the Guidelines advise voting for „stop[ping] the sale of firearms and accessories‰ entirely.111 Glass Lewis also offers similar guidelines, claiming that „religious institutions are concerned not only with economic returns but with the overall social impact of the companies in which they invest‰ and accordingly have „unique fiduciary responsibilities.‰112

6. Investor Networks and NGOs

Many faith investors form networks or coalitions to share expertise and resources on how to align investments with religious beliefs. Formed in 1971,113 the ICCR was the first faith investor network in the United States and is still the largest, with a membership including 300 global institutional investors.114 While founded by faith investors who protested apartheid, today it includes both faith-based and secular institutions, including social impact investors.115 In the past five years, several other networks have emerged. Some are organized by asset class·such as Thank God for Bitcoin.116 Other notable examples are the rapidly growing Faith Driven Investor Network

(FDIN) and Faith Driven Entrepreneur Networks (FDEN).117 Both networks are organized as nonprofit corporations (501(c)(6) and 501(c)(3 ,118 and refer to themselves as „ministries.‰119 FDIN describes itself as „a movement dedicated to helping Christ-following investors believe that God owns it all and that He cares deeply about the how, where, and why behind our investment strategies.‰120 FaithInvest, founded in 2019, similarly, operates as a global network providing faith investors resources to align investment practice and polices with religious values.121 Notably, these investor networks, while all Christian, span the ideological spectrum.122 This Section has introduced the myriad entities in the faith investing ecosystem; the next Section turns to the growth in faith-aligned products and services and, in particular, mutual funds and ETFs.

Faith-based financial products are proliferating across public and private markets. In the private markets, these include chaplaincy-based affordable housing, spiritually integrated venture capital funds, faith-aligned private equity, and more.123

While there are too many examples of this growth to explore here, this Part concludes with a brief discussion of mutual funds and ETFs, given their rapid expansion and the unique questions they raise at the intersection of corporate law and religious liberty, as discussed in Part V.

Religious investors were among the first to create socially responsible mutual funds·in 1965, several churches launched the first socially responsible investing (SRI) retail fund in Sweden.124 The first SRI that received a broad audience in the United States was the Pax World Fund, founded in 1971 by antiwar United Methodist ministers.125 But the first mutual fund to articulate a biblically aligned investment philosophy was the Catholic Mutual Fund launched in the 1990s.126

By 1999, faith-based mutual funds in the United States held just $11.5 billion.127 That number has grown to $93.9 billion

with an additional $5.3 billion invested in ETFs.128 Today, there are 850 faith-based mutual funds and ETFs globally, and nearly 95% of Christian mutual funds are based in the United States.129 Mutual funds remain the most popular investment vehicle option for public market faith investors, with 126 funds.130 However, this trend may be changing; faith-based ETFs are on the rise.131 Indeed, the first quarter of 2024, 1 new Christian ETF was added to the market, bringing the current number to 29.132 For example, Inspire, the largest provider of faith-based ETFs, launched the lowest-cost faith-based U.S. large cap ETF in March 2024.133 Notably, Christian funds have more assets under management than any other faith-driven funds, overtaking the previously dominant Islamic (Sharia) funds in 2021.134 Certainly, the roughly $88 billion that is currently invested in faithaligned mutual funds and ETFs is still an exceedingly small fraction of the overall industry,135 which currently stands at $22.1 trillion.136 Importantly, this $88 billion does not reflect the full value of the faith investing market·far from it. Consider that Wespath, the largest pension fund, has over $25 billion in assets under management.137 Most of WespathÊs investments are in

secular mutual funds, indexes, and ETFs that are not explicitly faith-based, but (according to Wespath) are still aligned with biblical values·such as ESG funds.138

II. FAITH INVESTORS: GOVERNANCE AND DECISIONMAKING

Given their diversity, faith investorsÊ governance varies widely. CatholicismÊs papal primacy doctrine provides perhaps the strongest example of a hierarchical structure. Yet, even within the Catholic Church, there are differences, which are ultimately reflected in distinct investment principles and guidelines.139 Other denominations are not as hierarchical·for example, certain Protestant denominations and, in particular, some Evangelicals, believe that followers of Christ can speak to God directly about anything, including biblically responsible investing.140 The implication is that certain faith-based financial advisors believe they have the authority, indeed the obligation, to interpret scripture and offer investment guidance based on their revelations.141

Notwithstanding these differences, this Part reveals that many faith investors have specific and often very sophisticated internal governance processes for aligning investment decisions to faith. As this Article discusses later, faith investorsÊ claim of religious belief is only protected if the belief is „sincerely held,‰ rather than a pretext for avoiding a law or regulation. These governance processes help establish that faith investorsÊ investment decisions may be protected as an expression of religious activity. This Part distills a few foundational principles of faith investors.

Section A introduces a typology of faith investing principles. Section B illuminates, through case studies, the governance systems that faith investors use to make decisions on what companies invest in and engage with.

As the table below summarizes, faith investors have a distinct perspective on bedrock economic concepts, such as capital, ownership, stewardship, and materiality. This sets the trajectory for an investment strategy that diverges from secular investors in important ways. The following Subsections examine each of these concepts.

Table 3: Foundational Principles142

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Scripture (Old Testament, New Testament), Sermons, Prayer, Secular Legal Mandates „God owns it all.‰ Individuals must steward property and capital on behalf of God and for his purposes. Increasing financial profit is not an end. Faith investors must account for the spiritual materiality of their investments. Faith investors employ a long-term or „eternal‰ timeframe. Faith investors make explicit tradeoffs between financial gain and spiritual impact.

1. Sources of Authority

Faith investors often root their investment principles and strategies in scripture·with over 2,000 Biblical verses addressing investing or money, there is room to justify wide-ranging

practices.143 In addition to scripture, faith investors rely on interpretations by religious institutions, sermons, and revelations. For example, FDIN hosts regular prayer meetings on investment decisions in which they look to scripture for guidance.144 While faith investors acknowledge that they must comply with secular laws and mandates, religious sources of authority serve as the ultimate „guardrails‰ or ethical principles.

2. Ownership, Capital, and Stewardship

With the proliferation of voluntary and mandatory global investor stewardship codes and principles, stewardship is the focus of much scholarly debate.145 The theory of universal ownership, which underlies these stewardship codes, posits that diversified asset owners have financial incentives to collaborate on systemic risks, such as climate risk, because such risks cannot be diversified.146 Therefore, collaborating on risks increases long-term risk-adjusted returns.147 In contrast, faith investors begin with a radically different conception of capital ownership. Simply put, for faith investors, „God owns it all.‰148 Certain faith investors ground this claim in scripture·Psalm 24:1 states, „[t]he earth is the LORDÊs, and everything in it‰149·and it leads to a unique understanding of what it means to be a „steward‰ or fiduciary of financial resources.

This biblical view of financial stewardship is evident in faith investorsÊ investment principles and guidelines.150 It is also consistent with a school of thought known as „Kingdom Economics,‰ which argues that there is an economy in heaven that transcends financial profit maximization or long-term risk adjusted returns.151 While faith investors have traditionally interpreted stewardship as synonymous with „tithing,‰ or donating ten percent, many contemporary faith investors advance a broader view that the remaining ninety percent must likewise be „stewarded‰ in accordance with faith.152 This enlarges the scope of faith investing beyond philanthropy and towards environmental and social stewardship, bringing faith investors in alignment with certain ESG investors.

This rejection of the dichotomy between profit and social impact goals exists in the secular community too. Indeed, the birth of impact investing, the social enterprise movement, and the Public Benefit Corporation reflects a move beyond philanthropy to integrate value and values.153 But values-based investing is

not without its critics, with many claiming that for-profit corporations should „stay in their own lane‰ and focus only on financial profit maximization.154 This Article highlights that the delineation between value and values is not only at odds with adherents of SRI, but also with the growing faith investor community.

3. Spiritual Materiality and Human Flourishing

The unique articulation of stewardship requires faith investors to focus on a new concept· „spiritual materiality,‰ also referred to as „spiritual impact‰ or „Kingdom Impact.‰155 This is akin to a triple bottom line (people, planet, profits) or double materiality,156 but it is distinctly rooted in ensuring that investments align with biblical teaching. Faith investors are explicit that, while some may be unwilling to sacrifice financial returns for spiritual impact (and others are obligated by their fiduciary duties to generate market returns), their goals still extend beyond profit.

4. Long-Term Time Horizon

Faith investors emphasize that their time horizons are longterm, even „eternal.‰ For example, Brent Beshore, CEO of Permanent Equity, a private equity firm with a long-term time horizon explains: „[W]hen you stretch your time horizon to eternity, it changes the way that you can look at individual short-term issues and allows you to think, frankly, much more clearly about whatÊs really important, [and] whatÊs not.‰157 This long-term

perspective is baked into Permanent EquityÊs business model· rather than buying companies to sell them in a short timeframe (the traditional private equity model), Permanent Equity invests in small private companies without any plan for immediate exit.158 This long-term horizon is grounded in the belief that faith investors will be held accountable in the afterlife.159

5. Trade-offs and Risk

For faith investors, the definition of risk goes beyond losing capital·the ultimate risk is failing to steward GodÊs resources consistent with GodÊs plan. Many religious institutions have Investment Policy Statements (IPSs) and guidelines that represent the governing documents for integrating faith values into investment.160 Faith-based IPSs specify numerous „guardrails‰ for investing, including how the investments are meeting non-financial mission-oriented goals.161 Thus, faith-driven investors are willing to make tradeoffs between financial returns and impact.

As the examples below will illustrate, faith investorsÊ decision-making processes vary by denomination, congregation, and church. But one unifying thread is that faith investors aim to incorporate the above principles of faith into investment decisions. The next Section offers case studies to demonstrate how faith investors integrate these principles into their investment practices.

Taking the above principles as their starting point, faith investors have developed a variety of governance systems that align investment decisions with Christian values. As the following two case studies reveal, faith investors incorporate faith in investment guidelines and policies that inform their investment strategy. These guidelines demonstrate that faith investorsÊ

governance processes are not merely an investment strategy, but also an expression of religious values.

1. The United Methodist Church and Wespath

The UMC has one of the largest denominational pension funds in the world, Wespath, with $26 billion of assets under management.162 The UMCÊs conception of stewardship is informed by both scripture and John WesleyÊs sermons, particularly „The Use of Money‰ in which he preached: „[W]hen the possessor of heaven and earth brought you into being . . . he placed you here not as a proprietor, but a steward: As such he entrusted you, for a season, with goods of various kinds; but the sole property of these still rests in him . . . .‰163

The UMCÊs General Conference is the churchÊs highest legislative body and the only entity that can speak on behalf of roughly 10 million United Methodists.164 The General Board of Pension and Health Benefits (General Board), an agency of UMC, exists under the authorization of the General Conference.165 This agency is comprised of a senior leadership team and a board of directors.166 The General Board elects the General Secretary, who serves as its chief executive.167 The Board achieves its work through various committees; for example, the Principles Committee continually interprets the churchÊs Social Principles (discussed below) to ensure that its investments remain aligned with UMC doctrine.168 The General Conference holds a meeting every 4 years, convening about 1,000 delegates

worldwide.169 At that meeting, the UMC updates its key policies and strategy, including its investment policies and the Social Principles; these, in turn, guide the UMCÊs pension fund.170

The UMCÊs Social Principles date back to John WesleyÊs sermons, which embraced the role of the church as social reformer. In 1908, the UMC first formalized these ethical commitments by adopting a Social Creed.171 Today, the Social Principles reflect the UMCÊs position on environmental, social, economic, political, and investment issues.172 Far from a top-down approach, the process of creation and adoption was informed by input from thousands of United Methodists all over the world, in addition to secular NGO groups.173

The Social Principles are a compilation of position statements on contemporary social issues. They include topics from „the natural world‰ to the economic, social, and political community.174 The principles provide that the natural world should be valued and conserved as „GodÊs creation and not solely because they are useful to human beings.‰175 The principles go on to call for a reduction in GHG emissions and the use of fossil fuels and emphasize socially responsible management that considers stakeholders.176 Once the Social Principles are published, the UMCÊs Book of Resolutions builds upon them, including providing guidance on investing practices. For example, UMCÊs Resolution 4071 addresses investment ethics and acts as a framework for sustainable investing.177 The latest version emphasizes ESG

and articulates that the UMC must balance its fiduciary duties with its ethical responsibilities.178

In several contexts, the UMC emphasizes that its ESG integration is driven by „parallel goals: being a prudent financial steward and doing our part to influence change to assure a sustainable future for all GodÊs creation.‰179 This is reminiscent of secular investorsÊ argument that ESG integration enhances riskadjusted returns.180 Such commitment to ESG runs deep·UMC was one of the twenty-five co-authors and founding members of the United NationÊs Principles of Responsible Investment (PRI).181 And UMC has remained a leader in the PRI community, for example, helping to develop the Principles for Inclusive Finance, and serving as a co-lead of the U.N. Net Zero Asset Mangers Alliance.182 Therefore, UMC uses ESG as a proxy for faith-aligned investing.183

2. The Catholic Church and Laudato Si

The Catholic Church adheres to the doctrine of papal primacy, which means that the Pope possesses authority over the church and periodically communicates the churchÊs views through „encyclicals.‰184 In 2015, Pope Francis issued an

encyclical, Laudato Si: Care for Our Common Home, which focused on climate change.185 Though it was not the first time the Catholic Church addressed environmental harms, Laudato Si was the first encyclical dedicated solely to climate change.186 Drawing inspiration from St. Francis, Pope Francis argued that humans must protect „our common home‰ and defines „climate as a common good.‰187 Beginning with an acknowledgement that climate change is caused by humans, Pope Francis rejected segments of Judeo-Christian thought that believe that humans have dominion over Earth.188 Pope Leo XIV has continued Pope FrancisÊ commitment to addressing climate change and protecting creation.189

Chapter 5 of Laudato Si called for concrete steps, including an immediate replacement of coal and the phasing out of oil and natural gas.190 The encyclical is notable for taking a position on specific investment practices, such as the cap and trade system·„[t]he strategy of buying and selling Âcarbon creditsÊ can lead to a new form of speculation which would not help reduce the emission of polluting gases worldwide.‰191 Environmentalists have heralded Laudato Si as „the most important document yet of this millennium.‰192 Eight years later, Pope Francis remained frustrated by the lack of progress and, in 2023, issued a

follow-up „Apostolic Exhortation‰ entitled Laudate Deum, which has been described as even more „radical‰193 because it calls for an „abandonment of fossil fuels.‰194 Indeed, Pope Francis was notable for his willingness to advocate for policy prescriptions, particularly in response to climate risk. For example, he called for a carbon tax starting in at least 2019.195 It is not surprising Pope Francis reinforced the encyclical by supporting the Laudato Si Action Program, which calls for, and tracks, fossil fuel divestment.196

Despite this global movement, not one of the 195 U.S. dioceses has divested.197 Instead, the biggest step taken by U.S. bishops·under the umbrella of the USCCB·was a 2021 revision of the investment guidelines.198 The guidelines outline a three-pronged investment strategy of „avoid doing harm,‰ „actively work for change,‰ and „promote the common good.‰199 These three prongs broadly correlate to negative screening, shareholder engagement, and public policy advocacy. The USCCB diverged from Laudato Si by opting for active engagement with environmentally conscious companies rather than divesting from fossil fuels. As the Guidelines provide, the USCCB will „actively invest‰ in companies „consistent‰ with the Paris Agreement and „encourage‰ noncompliant companies through engagement, „to establish greenhouse gas emission reduction

goals, provide disclosure around low-carbon planning, and mitigate climate change.‰200 But the Guidelines provide that the USCCB will merely „consider‰ divestment from companies that „consistently fail‰ to work towards the Paris Agreement.201

Although faith investors have generally coalesced around a set of principles, their governance structures impact how these principals are realized. Against this backdrop, the Article now turns to religious liberty doctrine and considers how its impact attempts to limit values-based investing.

III. A BRIEF OVERVIEW OF RELIGIOUS LIBERTY

The First AmendmentÊs Religion Clauses, Free Exercise and Establishment, are in flux.202 While acknowledging the ongoing debates within Religion Clause jurisprudence, this Article invites deeper consideration of whether faith investing introduces new tensions in religious liberty doctrine. Given the rise in faith investing and the Supreme CourtÊs increasingly expansive articulation of religious liberty, this initial inquiry is both timely and important. This Part, directed toward an audience less familiar with religious liberty doctrine, sketches out a few central concepts and frames the discussion that follows. It sets the stage for the next Parts, which apply religious liberty doctrine to faith investing in practice, in the context of shareholder engagement and ethical screening.

At its core, the Free Exercise Clause prohibits the government from discriminating against religion.203 Laws that target a particular religion are relatively easy cases·for example, a ban on all Islamic finance (as opposed to one on interest-free financial products) would likely violate the Free Exercise Clause.204 The more common, and thorny, challenges arise in the

context of neutral laws that are generally applicable but burden religion. In Employment Division v. Smith, a decision that remains controversial,205 the Supreme Court held that such neutral laws do not trigger heightened constitutional scrutiny.206 Congress responded to Smith by enacting RFRA, which applies strict scrutiny to any legislation that substantially burdens religion.207 Under RFRA, the government must establish that the challenged law reflects „the least restrictive means‰ of serving a „compelling government interest.‰208 If the government cannot meet this burden, the religious claimant is entitled to an exemption.209 Although RFRA is limited to federal law, twenty-nine states have enacted legislation extending RFRAÊs protection, and others have extended RFRA protections through precedent.210

Despite the widespread criticism, the Supreme Court has not overruled Smith·at least, not yet.211 This means that, in states without „state-RFRA‰ (like California and Delaware), laws of general applicability are still reviewed under the more permissive rational basis standard. In practice, however, the Supreme Court has substantially narrowed Smith by expanding the application of the Free Exercise Clause to laws of general

applicability. Borrowing a concept from international law, scholars refer to the CourtÊs recent jurisprudence as the „most-favored-nation‰ view of free exercise, which maintains that „[t]he constitutional right to free exercise of religion is a right to be treated like the most favored analogous secular conduct.‰212 The upshot is that, if a law of general applicability includes a secular exemption, then religious actors must receive a comparable exemption so that religious conduct is treated at least as well as secular conduct.213

The Supreme Court has applied the most-favored-nation ap-

proach in cases involving COVID-19 restrictions. In Tandon v. Newsom, the Court explained that: (1) Strict scrutiny is triggered when regulations „treat any comparable secular activity more favorably than religious exercise‰; and (2) comparability for such purposes is determined by „the asserted government interest that justifies the regulation at issue.‰214 Therefore, since California exempted secular activities from its COVID-19 gathering restrictions, similar restrictions on religious gatherings must survive strict-scrutiny.215

As a practical matter, the Supreme CourtÊs capacious approach to Smith, combined with RFRA and state-RFRA, means that laws of general applicability·whether local, state, or federal·that limit religious practice will likely face strict scrutiny.216

„radical undoing‰

In contrast to an increasingly capacious Free Exercise jurisprudence, the Supreme Court has constrained the application of the Establishment Clause, which historically prevented the government from establishing or favoring a religion.217 The prevailing view on the Supreme Court is that the government violates the Establishment Clause if it either coerces religious participation or discriminates among religion in allocating funding or resources.218 Constitutional law scholars lament that this view reflects a of Establishment Clause protections.219 Notably, the Court has abandoned the test in Lemon v. Kurtzman220·used for over fifty years to adjudicate Establishment Clause cases221·and replaced it with a more open-ended inquiry focused on „original meaning‰ and „historical practices.‰222 This new approach gives the Court unprecedented latitude.223 Still, as Ira Lupu and Robert Tuttle have argued, despite this chipping away at LemonÊs doctrinal test, certain Establishment Clause principles still animate the CourtÊs reasoning.224 In particular, the Court remains concerned with excessive entanglement with religion.225 Therefore, at least theoretically, congressional investigations into faith investorsÊ internal decision-making, or SEC investigations scrutinizing faith-aligned funds, may draw the government into inherently religious processes and, accordingly, raise Establishment Clause concerns.226 However, most scholars concede that, absent an

affirmative coercion by the government to engage in (or refrain from) religious activity, the Establishment Clause is a relic.227 The demise of the Establishment ClauseÊs protections for church-state separateness means that claims of religious liberty are even more likely to arise in the context of free exercise or RFRA claims.

This Section ends with a discussion of the church autonomy doctrine, a narrow and much-debated principle that proponents·including certain Supreme Court Justices·ground in both the Free Exercise and Establishment Clauses. The church autonomy doctrine, which recognizes „the right of religious institutions Âto decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine,ʉ228 could protect certain faith investor practices. Two recent Supreme Court cases have reinforced the autonomy of reliinstitutions: Hosanna-Tabor Evangelical Lutheran gious Church and School v. Equal Employment Opportunity Commission229 and Our Lady of Guadalupe School v. MorrisseyBerru,230 which both involved the „ministerial exception.‰ In Hosanna-Tabor, decided in 2012, a teacher at a Lutheran school sued for discrimination because she was fired by the church after taking medical leave.231 The Supreme Court characterized the teacher as a minister and held that the „ministerial exception‰ prevents the government from interfering in religious organizationsÊ decisions regarding their clergy.232 In Our Lady of Guadalupe School v. Morrissey-Berru,233 the Court further expanded

the ministerial exception by applying it to teachers at a religious school, even though their title did not include „minister.‰

More recently, the Court built on Hosanna-TaborÊs principle of deference in Catholic Charities Bureau v. Wisconsin LIRC.234 The core question was whether Catholic Charities Bureau, a non-profit affiliated with the Catholic Church, qualified as a religious employer, which would exempt it from WisconsinÊs unemployment compensation system.235 The Court unanimously held in favor of Catholic Charities.236

Importantly, Justice SotomayorÊs majority opinion rested on Free Exercise, and not church autonomy, principles. In a separate concurrence, however, Justice Thomas invoked the church autonomy doctrine, emphasizing that „[t]he First AmendmentÊs guarantee of church autonomy gives religious institutions the right to define their internal governance structures without state interference.‰237 While Catholic Charities Bureau does not expand church autonomy protections beyond the employment context, it does signal that church autonomy arguments are already being raised by the Court in contexts beyond the ministerial exception.

Admittedly, it is currently unclear whether the church autonomy doctrine would apply to investment practice. To date, the Supreme Court has restricted the doctrine to the narrow context of the ministerial exception.238 There are also deep divisions over the doctrineÊs origins and, therefore, legitimacy. Some scholars, including members of the current Supreme Court, trace church autonomy to medieval history that predated, but shaped, the FoundersÊ commitment to church-state separation.239 In sharp contrast to this „deep history‰ account, critics view the doctrine

as a recent, unjustified, and dangerous departure from the CourtÊs longstanding balancing of religious liberty against competing state interests.240

Still, consistent with Justice ThomasÊ concurrence in Catholic Charities Bureau, commentators have argued that its protections could, or should, extend to other areas of internal church governance.241 The doctrineÊs growing prominence thus underscores the Supreme CourtÊs potential willingness to defer to institutional claims of religious liberty.242 In sum, the limiting principles of church autonomy are murky·with some going so far as to argue that religious institutions enjoy a „sphere of sovereignty‰ with authority equal to that of the state.243

The next Parts apply these religious liberty principles to three examples of faith investor practices·introducing shareholder proposals, administering church pension funds, and offering faith-aligned mutual funds and ETFs. Each Part begins by detailing how the anti-ESG movement is limiting, or could limit, faith investorsÊ ability to incorporate environmental and social issues into decision making. It then argues that these constraints, aimed at secular investors, infringe on the religious liberty of faith investors.

Clearly, the anti-ESG movement is both expansive and rapidly evolving. Hundreds of bills have been enacted or proposed across the United States,244 while federal regulators, including the SEC, are taking drastic measures to constrain shareholder

voice.245 Because these developments are ongoing, this Part does not claim to be exhaustive. Rather, it focuses on several salient examples to illustrate the growing tensions between the antiESG movement and the religious liberty of faith investors.246

IV. RELIGIOUS LIBERTY AND THE PROTECTION OF FAITH-BASED SHAREHOLDER ENGAGEMENT

In the 1970s, churches and faith investors became the leaders of the social shareholder engagement movement and remain prolific filers of shareholder proposals. Despite their unique role, commentators group faith investors with other socially responsible investors. This Part delineates faith investorsÊ distinct attributes as shareholders and argues that efforts to constrain their shareholder engagement is in tension with religious liberty. This discussion is timely, given the current SECÊs agenda to overhaul Rule 14a-8 to prevent shareholders from bringing proposals on social issues or, indeed, any non-binding matters at all. Section A provides an overview of faith-driven shareholder engagement; Section B introduces a taxonomy of faith investorsÊ unique attributes; Section C analyzes the current regulatory and legal attacks on shareholder engagement; and Section D argues that these limitations either violate, or are at least in tension with, the religious liberty of faith investors.

Shareholder engagement broadly refers to strategies that shareholders utilize to influence corporate governance. Shareholder proposals, governed by SEC Rule 14a-8, are the most visible, but they are just the tip of the iceberg.247 Indeed, shareholder proposals are often a vehicle for prompting private

engagement.248 Sometimes, the corporation agrees to meet with shareholders and voluntarily addresses their concern, at least to a level sufficient to forestall the proposal.249 If talks come to an impasse, the shareholder can increase the pressure, through a public campaign, or file a proposal.250 SEC Rule 14a-8 then requires the corporation to include an eligible shareholder proposal in its proxy statement.251 Even after the shareholder files a proposal, the parties can settle before the proxy materials are public.252 But, without a settlement, the proposal is included on the proxy statement, unless the SEC agrees that the proposal is ineligible.253

Today, shareholder activism is recognized as „the new corporate governance norm,‰254 but investors started using the proxy process in the 1950s and 1960s to address environmental and social issues.255 The Medical Committee for Human Rights, a secular group, filed the first so-called social shareholder proposal in 1968, asking Dow Chemical to stop producing napalm.256 Around the same time, faith investors began to consider the social implications of their investment decisions.257 Between 1969 and 1971, the governing bodies of several Protestant

denominations began forming the institutional infrastructure to assess their investments and engage with portfolio companies.258 One early development, the Corporate Information Center (CIC), was a clearinghouse of SRI information.259 The CIC published an audit of church portfolios, revealing that its member churches were heavily invested in the defense industry.260 The audit laid the groundwork for engagement because it identified specific „focus‰ companies for faith investors.261 Before the audit, faith investors relied on excluding companies, but increasing knowledge about the field of corporate responsibility prompted the view that it was „more effective to preach the gospel‰ through engagement.262

In one of the earliest examples of religious shareholder engagement, in 1970, religious and secular shareholders pressured General Motors (GM) to form a committee to consider its social responsibilities. The same year, shareholders elected the first African American member of GMÊs board: Reverend Leon Sullivan.263 These efforts culminated when the Episcopal Church filed a proposal with GM in 1971, asking it to cease operations in South Africa.264 It was the first shareholder proposal filed by a religious investor and secured just 1.29% of votes cast.265

GM was just the beginning·that same year, the United Presbyterian Church submitted resolutions to the Gulf Oil Company asking it to assess its operations in Angola and Mozambique, and several Protestant denominations addressed U.S. companiesÊ copper mining operations in Puerto Rico.266 Faith

investorsÊ collaborative efforts prompted the formation of ICCR in 1974 to „coordinate[] the activities of the social responsibility shareholder movement.‰267 ICCR, which still operates out of its New York City offices (nicknamed „the God Box‰), remains dedicated to shareholder engagement.268 By 1983, members included „representatives of 14 Protestant denominations and more than 180 Roman Catholic religious communities and dioceses.‰269 ICCR is a coalition of faith investors, though its membership also includes „values-based‰ secular investors and pension funds.270

Shareholder engagement is idiosyncratic to each investor, company, and topic.271 Yet, there are, broadly speaking, certain attributes that ICCRÊs faith-based members tend to emphasize in their engagement, depicted in the table below.

Table 4: Attributes of Faith Investors in Shareholder

Engagement272

AAttttrriibbuuttee Catalytic

DDiissttrriibbuuttiioonn Often file the inaugural shareholder proposal on topics that other investors are not willing to engage on

Comprehensive

Prolific

Persistent

Constructive

Collaborative

Legitimate

Resolute

file or

co-file more

File shareholder proposals on a wide range of environmental and social topics Consistently proposals than other investors Engage on an issue or with a company for several decades and build on past efforts (ICCR provides the institutional infrastructure to be able to do so) Prefer dialogue and information sharing over „name and shame‰ campaigns Collaborate with other faith-based and secular institutions, and organizations. Viewed by some corporate executives as having greater moral legitimacy than other shareholder activists, such as NGOs or individuals Willing to increase the pressure and for make example, divesting when companies fail to make progress

tradeoffs by,

investors,

financial

To be sure, many investors display these attributes. Most notably, individual investors, or „gadflies,‰ are prolific proponents of shareholder resolutions.273 And institutional investors, like pension funds, are a paradigmatic example of patient capital.274 Moreover, faith investors themselves are not heterogeneous. Still, these attributes reflect recurring themes emphasized by faith investors, and those who collaborate with and engage with faith investors.

CCaattaallyyttiicc:: Faith investors are often the first to engage on social and environmental issues, like DEI, cybersecurity, and GHG emissions, sometimes predating other investors by decades.275

In the mid-1970s, faith investors began filing the first shareholder proposals on equal employment, demanding that companies produce their EEO-1 diversity reports.276 In 1976, the Sisters of St. Joseph of Peace filed the first resolution focused on sexist images of women in advertising at Colgate Palmolive, thus inaugurating a broader campaign to address sexism and racism in advertising.277 In the late 1970s, they were also the first shareholders to advocate for women on boards and against discriminatory lending and „redlining‰ at several U.S. banks.278

Faith investors also played a pioneering role on environmental issues; beginning in the early 1970s, they submitted shareholder resolutions addressing the environmental impacts of corporate operations.279 In 1984, ICCR members submitted resolutions at energy companies, calling for renewable energy policies;280 in 1989, they filed the first resolution addressing global warming („planetary warming‰) at General Electric.281

And while plastic waste proposals were the focus of the 2022 proxy season, ICCR members filed the very first resolution calling for reduction and recyclability of packaging with General Mills in 1994.282 Likewise, in 2008, Ford Motor Company published its first GHG reduction plan·pledging to reduce emissions by thirty percent in response to a proposal from Caldwell Dominicans.283

Finally, ICCR members have led shareholder advocacy on corporate political accountability. In 1974, the Episcopal Church and the Disciples of Christ filed the first-of-their-kind shareholder resolutions relating to corporate political contributions at several companies.284 And ICCR members have been filing resolutions on the fossil fuel industryÊs lobbying efforts since at least 1978.285 Thus, faith investors appropriately regard themselves as catalytic.286

CCoommpprreehheennssiivvee:: While proponents of social shareholder proposals tend to focus on a specific area, such as the environment or racial justice, ICCR members engage on a breadth of issues, as depicted in the table below.

Table 5: ICCR Shareholder Engagements Since 1971·Issue

Area/Topic287

IIssssuueess Climate Change

SSaammppllee TTooppiiccss NNoott CCoommpprreehheennssiivvee Climate Financing; Climate Governance; Climate Lobbying; GHG Reduction and Targets; ParisAligned Climate Lobbying

Corporate Governance

Environment

Finance

Food Justice

Health

Human Worker Rights

Rights

and

Inclusiveness

Lobby and Political Contributions

Justice;

CEO and Chair Separation; Corporate Taxation/Policies; Cumulative Voting; Independent Directors; Proxy Access; Proxy Voting Disclosure; Public Benefit Corporation Environmental Pesticides/Herbicides; Plastics Pollution; Recycling; Right to Repair/eWaste Business Standards; Corporate Taxation; Credit Ratings; Derivatives; Foreclosure; Responsible Lending; Risk Management Agricultural Sourcing/Supply Chain; Antibiotics; Deforestation/Commodities Sourcing; Farming/Land Rights; Obesity; Pesticides; Sustainable Agriculture Access and Affordability; Antibiotics; Paid Sick leave; Pesticides; Pharma Contributions; Lobbying/Political Pharmaceutical Patents; Pharmaceutical Prices and Access Artificial Intelligence; Collective Bargaining/Unionization; Corporate Human Rights Benchmark (CHRB); Gun Safety; Human Capital Risk Management; Human Rights Due Diligence; Private Prisons; Racial Justice; Ukraine Algorithmic Harm; Board of Directors Diversity; Equal Employment Opportunity (EEO); Gender Discrimination; Indigenous Peoples/Free, Prior, and Informed Consent; Racial Justice; Sexual Misconduct; Sexual Discrimination; Orientation; Workplace Equity Climate Lobbying; Paris-Aligned Climate Lobbying; Pharma Lobbying/Political Contributions; Political Contributions

Lobbying;

Sustainability

Water

Environmental Reporting; Public to Benefit Corporation; Right Repair/eWaste; Sustainability Reporting; Sustainability Reporting, GHG Emphasis Human Right to Water; Water; Water Impacts

PPrroolliiffiicc: In addition to being catalytic, faith investors are also highly active.288 Since its founding, ICCR members have filed or co-filed over 10,704 shareholder proposals, including 350 in 2025 alone.289 From 2010 to present, faith investors have been the lead filer of 14.6% of all environmental and social shareholder resolutions in the United States.290 Since 2010, members of ICCR, which is not even the entire universe of faith investors, have been the lead filers or co-filers on 64% of all shareholder proposals on ESG issues.291 The volume is, in part, a product of the ICCRÊs experience and efficiency; ICCR members tout the organizationÊs „great deal of expertise in how to write a strong shareholder proposal that will pass muster at the SEC and how to garner shareholder support at the AGM.‰292

PPeerrssiisstteenntt:: For faith investors, shareholder engagement is not one-off or sporadic. ICCR members consistently engage with

the same company or industry over an extended period. Consider Ford Motor Company, which ICCR has been engaging with since 1972 on issues including board diversity (1972), political contributions (1976), operations in South Africa (1980s), Human Rights universal healthcare (1994), executive compensation (1997), global warming (2000), universal healthcare (2007); and climate lobbying disclosure (2020).293 Faith investors engage over extremely long-time horizons294 and are also willing to accept incremental progress.295

CCoonnssttrruuccttiivvee: From the outset, ICCR members were clear that they favored dialogue over adversarial communication.296 Each year, ICCR members conduct approximately 300 „dialogues/engagements‰ with more than 200 companies.297 Within the ICCR community, the sisters of various orders have gained notoriety for conducting constructive dialogues and persuading companies to address social and environmental harms.298

This phenomenon is consistent with the broader movement of shareholder and corporate director collaboration, as well as emerging theories of corporate governance that emphasize the value of constructive dialogue and engagement.299 A recent study comparing ICCRÊs engagement with Ford argues that the company, initially resistant to addressing climate risk, became an industry leader through sustained and decades-long engagement with ICCR.300

CCoollllaabboorraattiivvee:: Faith investors collaborate with other religious orders, secular investors, NGOs, and governments.301 This is perhaps unsurprising; collaboration helps them overcome capacity constraints.302 Pension funds have been a particularly steadfast partner, especially CaliforniaÊs·CalPERS (the largest pension fund in the United States) and CalSTRS.303

LLeeggiittiimmaattee:: There is a growing debate on the legitimacy of shareholders engaging on ESG issues.304 According to stakeholder salience theory, legitimacy is „a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms,

values, beliefs, and definitions.‰305 With respect to faith investors, scholars have argued that their power comes from their legitimacy.306 Indeed, the ICCR has been described as „a potent moral force.‰307 Such potency flows from the fact that many faith investors are not seeking the spotlight·which is underscored by their preference for confidential engagement.308 Moreover, their actions stem from moral conviction, rather than from a motive of maximizing profit or enhancing reputation.309 ICCRÊs tagline· „inspired by faith, committed to action‰·reflects this sentiment.310 Interestingly, secular NGOs and individual „gadflies‰ who collaborate with faith investors point to their moral legitimacy as a crucial asset in joint engagements. For instance, in a specific engagement with the Disney Corporation, James McRitchie opted to have a faith investor present the proposal on data privacy for children.311

RReessoolluuttee: Faith investors tend to prefer engagement over divestment·voice over exit.312 But, compared to other institutional investors, they are more willing and (sometimes) able to divest.313 Many pension funds cannot, or believe they cannot, divest because they have a legal mandate to diversify their

assets.314 Though faith investors also must meet the needs of their beneficiaries, and many are diversified, they are more able to divest because their investment principles mandate a faithconsistent investment approach.315 While faith investors do not prefer divestment, they more often divest for moral, as opposed to financial, reasons.316 Also, even when faith investors divest (or refrain from investing in the first place) they often set up dedicated engagement funds.317 These funds, which might have as little as several thousand dollars, enable faith investors to hold enough stock to have a seat at the table.318

One of the best illustrations of these attributes in practice is faith investorsÊ decades-long advocacy for EEO-1 disclosure. In 1974, ICCR members filed the first proposal with Kraft, starting a campaign that did not gain momentum until recent social

movements, like #MeToo and Black Lives Matter.319 By 2021, faith investors, alongside institutional shareholders, had convinced 78 of the S&P 100 companies to disclose their EEO-1 reports.320 Remarkably, ICCR members filed or co-filed 307 resolutions advocating for diversity disclosures starting in 1974, but it took 20 years for the first of these resolutions to gain even 10% of shareholder votes.321

This Part has thus far focused on ICCR, whose shareholder engagement has been largely aligned with progressive values, such as gun violence prevention, DEI, and environmental justice.322 Today, shareholder engagement by faith investors spans the ideological spectrum. For example, Robert Netzly, InspireÊs CEO, has declared war on ESG.323 In the 2023 proxy season, Inspire began to expand its strategies from ethical screening to shareholder engagement.324 Its justification is rooted in

Scripture: „For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more.‰325 Inspire interprets this passage to mean that, in addition to screening or divestment, „shareholders have the right, indeed the duty, to actively engage with companies on issues of importance to Christian investors.‰326 In the 2022 and 2023 engagement season, Inspire met with 120 companies and cast votes in nearly 1,000 proxies on issues related to debanking, civil liberties, and LGBT activism.327 That engagement continues, with Inspire and other faith investors touting shareholder engagement wins.328

Inspire has focused on addressing companies that support „LGBT Philanthropy [and] Legislation,‰ on the grounds that management should not „get entangled in divisive political issues.‰329 While some companies have ignored InspireÊs requests, others, according to Inspire, „quietly pulled their support and were cleared by Inspire.‰330 Inspire „voted nearly 1,000 proxies in alignment with Christian values and to preserve shareholder value.‰331 Given its track record for proxy voting, Inspire touts a perfect 10/10 score from the newly formed NGO, Unleash Prosperity, which gave it an „A,‰ compared to an average of „D‰ in similar mutual funds and ETFs.332 To be sure, Inspire is part of

a growing trend·as politically conservative members of the faith-driven investor community have recently embraced shareholder engagement. Some explain that, in private engagements, corporate executives welcome the „countervailing pressure‰ that faith investors are providing.333 As one Catholic faith investor explained: „What we have heard from CEOs and executives is itÊs helpful to them to receive the countervailing pressure from our side . . . even if we just get folks to being neutral on the cultural issues, thatÊs a big win . . . .‰334

The fate of shareholder proposals has never been more precarious·the process, governed by SEC Rule 14a-8,335 is facing unprecedented opposition. Members of Congress claim that proposals have been „hijacked‰ by progressive shareholders to voice matters of „woke‰ social policy.336 Congressional hearings are ongoing: In September 2025, the House Financial Services Committee held a hearing „to assess whether the shareholder proposal process . . . has been co-opted by activist investors who prioritize narrow policy goals over maximizing shareholder value.‰337 While federal legislation is easy to propose but difficult to enact, the current moves by the SEC are far more consequential. And numerous states, such as Texas, have enacted legislation to limit shareholder proposals.338 Before addressing the current attacks, it is helpful to briefly recap the parameters of the shareholder proposal process.

SEC Rule 14a-8 requires public companies to include shareholder proposals and supporting statements in their proxy statements, unless the proposal falls under one of the ruleÊs exceptions.339 However, even if a proposal satisfies an exception, companies may still be required to include it if it falls into an exception-to-the-exception.340 Recent debates have centered on two such exceptions. First, under the „relevance‰ exception,

companies may exclude proposals that are not relevant to the companyÊs business.341 As the SEC clarified in past guidance, however, companies must include proposals that „raise issues of broad social or ethical concern related to the companyÊs business.‰342 Second, while companies may exclude shareholder proposals that do not relate to „ordinary business matters,‰ they must include proposals that „raise issues with a broad societal impact,‰ even when those issues transcend the corporationÊs ordinary business.343

Several decisions, including Lovenheim v. Iroquois Brands,

Ltd. and Trinity Wall Street v. Wal-Mart Stores, Inc., have affirmed that shareholder proposals are an appropriate vehicle for expressing social policy.344 A controversial 2021 SEC staff bulletin (SLB 14L) sought to clarify that social policy proposals were consistent with past precedent and SEC practice.345 But its critics claimed that SLB 14L not only broadened the SECÊs discretion, but also amounted to unchecked and illegitimate agency action with far-reaching impact.346 The controversy centered around SECÊs removal of the requirement for any „nexus‰ between the companyÊs business and the social policy at issue.347 As widely anticipated, on February 12, 2025, under the leadership of current SEC chair Paul Atkins, the SEC rescinded SLB 14L.348 SEC Chair Atkins has long been critical of the shareholder proposal process, claiming that it facilitates a „tyranny of the minority.‰349 In a far more sweeping move, Chair Atkins has

called for the SEC to re-evaluate Rule 14a-8, signaling that the Commission has long exceeded its statutory authority by allowing issuers to submit non-binding or „precatory‰ proposals, which includes environmental and social proposals.350 Acknowledging that the process will take time, in a recent speech, Atkins provided a blueprint for companies seeking to exclude proposals in the current proxy season.351 This guidance indicated that the SEC would favor no-action requests that argued that such proposals are not a „proper subject‰ for shareholder action under Delaware law, where most public companies are incorporated.352 Critics, including this author, have argued that Chair AtkinsÊ position is inconsistent with Delaware law and a departure from decades of SEC practice.353 Moreover, it will lead shareholders „to implement more aggressive tools[,] such as withdrawing voting support from director candidates; waging proxy contests; removing directors; and opposing executive compensation.‰354 Notwithstanding, the SEC remains the gatekeeper for shareholder proposals, and its current position threatens faith investorsÊ longstanding practice of shareholder engagement. Indeed, ICCR has co-filed a lawsuit against the SEC challenging its recent interpretation of precatory proposals and arguing that ICCR membersÊ investment policies are rooted in religion.355

Another novel claim is that shareholder proposals constitute compelled speech in violation of the First Amendment.356 In

National Center for Public Policy Research v. SEC,357 petitioners challenged SEC Rule 14a-8 on the grounds that it exceeds its regulatory purpose by providing a platform for social advocacy.358 The National Association of Manufacturers (NAM) intervened, arguing that social policy proposals infringe upon corporate First Amendment rights,359 raising a question of first impression·whether the First Amendment prevents the SEC from compelling a corporation to speak about social issues in its proxy statement.360 The case sparked considerable scholarly and policy debate·with law professors filing dueling briefs debating whether the shareholder proposal process survives constitutional scrutiny.361 While the Fifth Circuit ultimately dismissed the case on mootness grounds, the First Amendment challenges still animate the policy debate.362

More recently, compelled speech arguments are being invoked in opposing ways, underscoring the doctrinal complexity of shareholder engagement and constitutional law. As discussed above, faith and secular investors have sued the State of Texas, arguing that „[f]orcing [p]laintiffs to make government-preferred statements that run counter to their own beliefs is compelled speech and violates the First Amendment.‰363 While this Article focuses on religious liberty, and not speech, these

emerging cases underscore the complex interplay between ESG investing, securities regulation, and the First Amendment more broadly.

In addition to the SECÊs attempts, a GOP-controlled Congress is attempting to enact legislation that would effectively end shareholder proposals. Republican lawmakers have referred to ESG as „an evil pollutant‰364 and introduced numerous bills that would rescind the SECÊs power to compel ESG-related proposals. For example, The Businesses Over Activists Act (H.R. 4655)365 would rescind the SECÊs power to compel inclusion of an ESG and social-policy-related shareholder proposal, on the grounds that it constitutes compelled speech in violation of the First Amendment;366 and the Protecting AmericansÊ Retirement Savings from Politics Act (H.R. 4767) would allow corporations to exclude social policy and ESG proposals from their proxy statements.367

Of course, with such slim majorities, a filibuster-proof majority seems unlikely. Still, given the anti-ESG fervor in Congress, at the SEC, and across states, so-called social policy proposals are already being curtailed. For faith investors, though, the shareholder proposal process is religiously motivated activity. Thus, as the next Part addresses, any limitations must address the religious liberties of faith investors, as articulated in the Free Exercise Clause, the Free Establishment Clause, and the Religious Freedom Restoration Act.368

As the previous Section explained, the fate of social shareholder proposals, indeed, all precatory proposals, is uncertain. To frame the analysis, it is useful to apply religious liberty doctrine to two outcomes. First, SEC rulemaking, where the SEC promulgates a rule clarifying that all non-binding shareholder

proposals, which includes environmental and social proposals, are not the proper subject of a shareholder vote. Second, state law amendments, where state legislatures in both Delaware and Texas amend corporate codes to clarify that no corporation can be required to submit „precatory proposals,‰ or nonbinding recommendations by shareholders, to a shareholder vote. In either scenario, courts will find that laws limiting shareholder proposals are in tension with faith investorsÊ religious liberty.

1. Shareholder Engagement as Religious Practice

While there may be dual motives at play, faith investors have emphasized that, for them, shareholder engagement is a not purely financial, but also religiously motivated practice. For this reason, they have long opposed efforts to restrict the shareholder proposal process.369 In 2020, faith investors sued the SEC to prevent it from raising the refiling thresholds for shareholder proposals, arguing (ultimately unsuccessfully) that the marketplace is not morally neutral and that the SECÊs proposed rule would „muzzle the religious liberty of all faith investors.‰370 In 2024, in response to recent congressional investigations questioning faith investorsÊ participation in Climate Action 100+, faith investors invoked religious liberty. For example, the Presbyterian ChurchÊs response to Chairman Jim JordanÊs demand for information emphasized that the church does „not waive [their] rights as a Church to engage with public policy whenever and however it intersects with religious values, actions protected under both the First Amendment to the Constitution and the Religious Freedom Restoration Act.‰371 Likewise, the Unitarian Universalist Association (UUA) stressed that its endowment fundÊs participation in Climate Action 100+ is an example of longstanding religious activity.372 Moreover, faith investors

have sued the State of Texas over Senate Bill 2337 (SB 2337), which mandates that proxy advisors provide guidance solely on financial considerations,373 and have also challenged the SEC in separate litigation, arguing that these efforts unconstitutionally limit their ability to make investment decisions aligned with faith.374 In sum, these Christian religious orders, among others, maintain that their involvement in shareholder stewardship, to address environmental and social issues, is an expression of their religious freedom.375

Recognizing shareholder proposals as religious activity invites an obvious criticism: Faith investors could readily abuse the process to advance secular goals under the guise of religion. This is essentially the sincerity argument, which is weak, as the Supreme Court has long emphasized that religious practices are scrutinized under a highly permissive standard.376 The primary inquiry from an examining court is whether an individual or entity sincerely holds a certain religious belief and is acting in furtherance of that belief.377 Crucially, this is a subjective test, and courts often defer to the actorÊs own statements.378

Here, there can be little doubt that filing shareholder proposals reflects sincerely held religious beliefs, at least to the satisfaction of judicial precedent. As detailed in Part II, faith

investors often have robust governance structures to facilitate decision making and ensure that shareholder stewardship is anchored in religious teachings and scripture. For example, the Roman Catholic Church has framed its divestment from fossil fuels as a religious imperative, not only citing church encyclicals, but also connecting the action to scripture on the protection of creation.379 The entire Laudato Si Movement was created by investors within the Church to „protect creation and all who share it‰ by divesting from fossil fuels, noting that „[e]very dollar invested in fossil fuels is a vote for suffering,‰ including fossil fuel companies within the same class of harmful industries as those promoting child labor and manufacturing weapons.380

This illustration demonstrates that shareholder engage-

ment is well within the sincerity threshold applied by courts.

But the breadth of ESG-aligned shareholder engagement by faith investors also suggests that the Supreme CourtÊs sincerity jurisprudence is fast approaching a floodgates problem. While it may be possible to assess the religious sincerity of an individual, family, business, or even privately held corporation, how can the Court meaningfully adjudicate the sincerity of thousands of dispersed faith investors, for example? And, perhaps even more troublingly, with the growing pressure to abandon ESG investing, how can we make sure that values-based investors are not using religious liberty as a shield for their otherwise secular investing practices? Notwithstanding these growing concerns, shareholder engagement likely meets the sincerity threshold, so we now turn to whether shareholder engagement is protected under RFRA.381

2. RFRA Protection for Shareholder Proposals

RFRA, enacted in 1993, enshrines the First AmendmentÊs Free Exercise Clause in federal legislation. It prevents the government from substantially burdening an individualÊs exercise of religion, unless there is a compelling governmental interest,

and the action is the least restrictive means to further that interest.382 Burwell v. Hobby Lobby Stores, Inc.383 made clear that RFRA applies to corporations, at least privately held ones. In Hobby Lobby, the Court attributed the „sincerely held religious beliefs‰ of the shareholders to the corporation, allowing it to invoke RFRA and refuse to comply with a federal law requiring contraception coverage for employees.384 Corporate law and securities law scholars were (and remain) overwhelmingly critical of the Hobby Lobby decision, arguing that the Court failed to recognize that shareholders and the corporation are distinct legal entities, a hallmark of corporate law.385 Nonetheless, there is now little dispute that for-profit corporations qualify as an RFRA „person.‰

The religious liberty argument advanced here is on far stronger ground than Hobby Lobby because the shareholders who are filing the proposals are not for-profit corporations but members of religious organizations themselves. Moreover, Hobby Lobby could also extend to protect the „sincerely held religious beliefs‰ of other key players in the faith investor ecosystem, including the for-profit faith-driven asset managers or financial service providers discussed in Part I.386 Lastly, Hobby Lobby is also relevant because of the norms it established: The few corporate law scholars who applaud the decision point to the ubiquity of religion in for-profit corporations, both public and private, noting that „[f]or-profit corporations embodying shareholdersÊ religions are common‰387 and that „[m]any religions

emphasize Âliving oneÊs faith,Ê even in a business setting.‰388 Accordingly, allowing the shareholders in Hobby Lobby an exemption from federal law, while requiring faith investors to adhere to federal law that mandates investing practices tied solely to financial concerns, would create a troubling incoherence in the protection of religious liberty.

To illustrate how RFRA might apply to an individual faith investor, consider the following hypothetical. A Catholic faithbased investor wants to submit a shareholder proposal to Exxon requesting more robust climate disclosure, in line with the Catholic ChurchÊs teachings on the papal encyclical Laudato Si, which Pope Leo XIV remains deeply committed to.389 However, as noted above, the SEC and/or state law now precludes precatory proposals, which includes environmental proposals. The Catholic investor could argue that these regulations abridge their right to exercise their faith. The first step in the RFRA analysis would ask whether the government action·in this case, federal legislation limiting ESG proposals·imposes a substantial burden on the free exercise of religion. The Catholic investor can point to the encyclical as a religious obligation and argue that limiting ESG proposals hinders the ability of the faith investor to comply. This brings us to the next step, where the government would have to show that there is a compelling government interest in limiting shareholder proposals on ESG issues. Given that shareholders have been bringing ESG proposals since the 1970s, it is unlikely that the government will meet this burden.390 The government could argue that limiting proposals helps maintain a stronger economy by focusing corporations on a shareholder wealth maximization norm, but there is no correlation between the strength of the economy and the number of shareholder proposals.

Even if the government were able to demonstrate that there is, in fact, a compelling government interest, it would need to show that the action taken is the least restrictive means of achieving that interest. If the government were to claim its compelling interest is the elimination of excessive shareholder

proposals, the investor might argue that a restriction on all precatory proposals is overly broad and that there should be an exemption for shareholder proposals brought by faith investors. The investor might also argue that a restriction that targets a specific type of shareholder proposal is underinclusive, as there may well be excessive non-ESG shareholder proposals. Thus, a federal law prohibiting ESG proposals would, at least arguably, be struck down as a violation of RFRA.

The same analysis would, obviously, apply to shareholder proposals brought by a religious investor asking a corporation to deny benefits for reproductive health or gender-affirming care. Such proposals are becoming more common·for example, the conservative National Legal and Policy Center submitted a shareholder proposal requesting that Disney release a report on the risks associated with providing gender-affirming care,391 which was included in the companyÊs proxy statement. Inspire, a for-profit investment management firm, has also been active in shareholder engagement. While Inspire is not an asset owner, its founder, Robert Netzly, is Christian, and the firm is acting on behalf of Christian shareholders.392 Accordingly, the analysis in Hobby Lobby is analogous. In sum, faith investors are distinct from ESG investors, and any limitation of the shareholder proposal process imposed by the federal government must survive RFRA scrutiny.

3. State-RFRA Protection for Shareholder Proposals

The analysis becomes more complicated when we apply these principles to state legislation limiting shareholder rights because not all states have enacted RFRA-like protections. Delaware, for example, has not enacted a „state-RFRA,‰ whereas Texas has.393 At the same time, to woo corporations from Delaware to Texas, the Texas legislature is actively amending its corporate law to weaken shareholder rights.394 Based on the analysis above, any such limitations in Texas must survive strict scrutiny.

In Delaware, however, the analysis differs because Delaware lacks a state-RFRA.395 Even still, a faith investor might prevail under a framework like Employment Division v. Smith. Under Smith, although neutral laws of general applicability do not typically trigger strict scrutiny, Delaware courts could still consider arguments based on the „first-favored nation‰ theory discussed above.396 Under that approach, if secular shareholders, such as those that anchor their proposals to financial materiality as opposed to values, are treated more favorably than religious actors, then DelawareÊs legislation could still be subject to heightened scrutiny. The precise application of these doctrines is beyond the scope of this Article and would depend on the specific statutory language and context. Still, this comparison illustrates the growing tensions between statesÊ corporate law reforms and the religious liberty claims of faith investors. Moreover, perhaps counterintuitively, states with state-RFRA protections are often conservative·the same states that are enacting legislation preventing values-aligned investing.

As this Part has established, faith investors were early adopters of shareholder engagement, and shareholder proposals have remained one of the most useful tools in their investment strategy. Recent efforts on the part of the SEC and states to restrict shareholder proposals will unduly burden faith investorsÊ ability to align their investments with their values. Given the CourtÊs expansive religious liberty doctrine, however, these restrictions may not survive strict scrutiny. The following Part applies a similar analysis to another important tool in faith investorsÊ toolkit: ethical screening.

V. RELIGIOUS LIBERTY AND FAITH-BASED ETHICAL SCREENING

Although faith investors have a longstanding history of shareholder engagement, ethical screening remains the earliest and still the most prevalent practice. It encompasses negative screening·removing so called „sin stocks‰ from portfolios·as well as positive screening·investing in companies with faithaligned practices. As this Part explains, the wave of state and federal legislation limiting values-based or ESG investing also implicates ethical screening by faith investors. While lawmakers

may regulate certain secular forms of ethical screening, this Part argues that religious liberty doctrine limits the application of these laws to faith investors. Section A introduces ethical screening and offers several case studies; Section B applies religious liberty doctrine to ethical screening in church pension plans; Section C introduces a new concept, „faith-washing,‰ and examines the limits of the SECÊs scrutiny of faith-aligned mutual funds and ETFs.

The most prevalent ethical screen among faith investors reflects a strong pro-life position and avoids four „sinful‰ products: alcohol, gambling, pornography, and tobacco. According to the prospectuses of 158 mutual funds and ETFs, all have a screen for alcohol and tobacco,397 and almost all have screens for abortion, with one clear outlier·the New Covenant Funds, which manage assets for the Presbyterian Church.398

In addition to ethical screening, faith investors have engaged in impact investing since at least the early twentieth century.399 In 1917, the Church Pension Fund, the sponsor and

administrator of pension plans for the Episcopal Church, began funding various community projects·the fundÊs impact investments still include renewable energy, real estate, sustainable farming, and affordable housing.400 Likewise, for the past thirty years, WespathÊs Positive Social Purpose (PSP) Lending Program lends to affordable housing and community development projects.401 More recently, in 2023, the Church of England announced plans to set aside funds to right „past wrongs‰ and invested in social impact funds that promoted racial equity as restitution for slavery.402

Despite these examples, impact investing remains fringe among faith investors·with 88% engaged in negative screening, but only 11% practicing impact investing.403 Still, there is growing interest among faith investors to use their capital to make a positive impact.404 For example, the FDIN seeks to increase faith-based impact investing: FDINÊs deal platform, Marketplace, connects investors with entrepreneurs who „are leaning in to their calling to create and innovating in the image of their Creator, working for His glory as His Kingdom comes on Earth

as it is in Heaven.‰405 Marketplace only serves investors that affirm the Lausanne Covenant,406 which underscores that evangelicalism is ChristianityÊs goal.407 Consistent with its evangelical mission, the platform rates impact opportunities based on their „spiritual integration,‰ using criteria ranging from the founderÊs private Christian beliefs (less integrated) to explicitly „gospel-driven‰ companies (more integrated).408

1. Global X S&P 500 Catholic Values Index

The Global X S&P 500 Catholic Values Index ETF (CATH) is the largest U.S.-listed faith-based ETF, with $1.11 billion of assets under management.409 Founded in 2016, CATH tracks the S&P 500 while excluding companies whose business practices violate guidelines developed by the USCCB.410 The Knights of Columbus, the faith-based asset manager that administers the ETF, then screens according to these principles and reviews the portfolio every 90 days to ensure compliance with the guidelines.411 The investment team includes a Catholic professor who serves as a moral theologian and decides whether companies should be excluded.412 Challenges often arise the

in

pharmaceutical industry with mergers-and-acquisitions activity in companies that produce abortifacients or rely on stem cell research.413

CATH places different weights on issues. At one end of the spectrum, any company whose operations or production is linked to abortion, contraceptives, or stem cell research is excluded.414 Whereas, for other issues, such as military contracting or gambling, screens only exclude a company if more than fifty percent of its revenue is derived from these sources.415 Therefore, the largest holdings in CATH, by index weight, mirror those of secular broad market indexes and include major technology companies, such as Microsoft, Apple, Nvidia, Meta, and Tesla.416

2. Timothy Plan

An early example of a Protestant ETF is the Timothy Plan, which was established in 1994 by Arthur Ally, a Southern Baptist known for his anti-abortion advocacy.417 Timothy Plan claims to be „AmericaÊs first pro-life/pro-family mutual fund.‰418 It began with screens for pornography, alcohol, tobacco, or gambling and later added „alternative lifestyles‰ and „anti-family entertainment.‰419 Today, Timothy Plan offers 12 funds and 7 ETFs, applying its faith filters stringently, not investing „a single penny‰ in companies that threaten biblical values.420 According to Timothy Plan, 1,109 publicly traded companies violate its

screens.421 Unlike the Catholic ETFs, its filters exclude household names, such as The Walt Disney Company (support of LGBTQ), Meta (sex trafficking),422 Nestlé (child labor),423 and Apple (forced labor).424

Like many faith-based mutual funds, Timothy Plan relies on a third party, eVALUEator, to apply its filters.425 The eVALUEator tool comprises a „moral analysis and research of more than 11,000 mutual funds, fund of funds, variable annuities, and ETFs.‰426 For example, eVALUEatorÊs Abortion Screen includes abortifacient manufacturers (including contraceptives), cloning, fetal tissue experimentation, abortion services, disposal, philanthropy (donating to Planned Parenthood), and promotion of abortion through „the Pro-Choice agenda.‰427 Likewise, its Lifestyle Screen includes promoting LGBTQ lifestyles through advertising, marketing, or pride events and having any „business relationship with LGBTQ . . . organization(s) or events.‰428 eVALUEator adds assesses „violations.‰429 In 2022, Home Depot had 17 violations for supporting both abortion and „non-married lifestyle,‰ due to its donations to LGBTQ organizations.430 Inspire had originally

continuously

companies

and

excluded Tractor Supply and LoweÊs, as well, but added them back because the companies changed their policies of „LGBT Activism.‰431 eVALUEator does not screen out gun manufacturers or fossil fuel companies.432 With respect to climate risk or fossil fuels, eVALUEator, in contrast to the Church of England and the Catholic Church, believes that the „Bible says that we are to take dominion over the Earth.‰433 Remarkably, after applying its ethical screens, eVALUEator only screens out 3% of all publicly traded companies in the United States.434

3. Inspire Advisors ETFs

Among the most active Protestant-led issuers is Inspire, the largest provider of Christian ETFs.435 InspireÊs ETFs total over $1.4 billion, and its total assets under management exceed $2.6 billion.436 Its faith-based ETFs, discussed above, bear tickers, such as WWJD, BIBL, and GLRY.437 Inspire continues to roll out new investment products.438 On March 26, 2024, it launched the Inspire 500 ETF, a 0.09% expense ratio U.S. large cap fund, making it the lowest-cost faith-based ETF.439

Inspire selects its securities using the Inspire Impact Score, a proprietary methodology that assigns a score based on the

securityÊs alignment with biblical values.440 It created this methodology as an alternative to ESG investing screens and methodologies·noting that „[f]aith-based investors have largely been underserved by secular Wall Street firms, evidenced by the nearly universal tilt toward progressive, liberal values across the rapidly expanding ESG investing landscape.‰441 Inspire is an example of the increasing chasm between ESG and Biblically Responsible Investing, prompted by the ESG culture wars: In 2019, Inspire used the term „faith-based ESG‰ to describe its approach to investing in a biblically aligned way.442 However, in 2022, it disavowed ESG and removed the term from all its funds.443 Indeed, founder and CEO Robert Netzly has been one of the most vocal critics of ESG, claiming that „ESG has become weaponized by liberal activists to push forward their harmful, social Marxist agenda‰ and that ESG and CRT (critical race theory) were „acronyms worth fighting against.‰444 Thus, the Inspire Impact Score was born.

The Inspire Impact Score, which still uses the terms „environmental, social, and governance,‰ analyzes issues from a „biblical perspective.‰445 In addition to negative impact scores, Inspire offers a methodology for positive impact scores.446 Despite its CEOÊs opposition to „ESG‰ as a whole, InspireÊs positive impact categories are drawn directly from the Sustainability Accounting Standards BoardÊs (SASB) „materiality categories,‰ which are commonly used by ESG investors.447 Unlike secular ESG investment managers, Inspire applies the SASB categories „through a biblical worldview in line with historical Christian

orthodoxy.‰448 According to Inspire, there is a positive correlation between securities with positive Inspire Impact Scores and returns.449

4. SovereignÊs Capital Flourish Fund

Founded in 2012, SovereignÊs CapitalÊs purpose statement reads: „We exist to love God and love our neighbor through investing.‰450 Its assets under management exceed $550 million, and it offers investment funds across myriad asset classes, including launching its first ETF in October 2023.451 Its approach to ethical screening is twofold, applying traditional faith-based investment screens while focusing on firms with faith-driven CEOs.452

The Flourish Fund prospectus states that it applies „ÂfaithdrivenÊ investing based on non-denominational Christian values and seeks companies that show Âlove of neighborÊ for employees, customers and community.‰453 Its investment thesis rests on the premise that „inverting the focus to positively target companies with faith-driven management and biblical corporate values can generate stronger investment returns and greater kingdom impact.‰454 To that end, the Flourish Fund maintains a list of 330 companies with faith-driven CEOs.455 This focus on faith-based CEOs stands out. The firm conducts ongoing due diligence on each CEO to gauge their faith, which includes references,

interviews, analysis of financial donations, board and community affiliations, and the extent to which Christian faith is discussed on earnings calls.456 Unlike Timothy Plan and Inspire, which rely on screening and impact, SovereignÊs Capital employs a highly active approach and engages with companies „to encourage greater spiritual integration.‰457 For example, SovereignÊs Capital facilitates forums for faith-driven CEOs to share best practices.458 Additionally, the Flourish Fund conducts „spiritual due diligence‰ by applying a propriety methodology to assign the companies a Spiritual Integration Score.459

In 2024, Coca-Cola Consolidated, Inc. (COKE) was listed as a top 10 holding in the Flourish Fund and provides a useful example.460 Referencing 2025 figures, COKE is the largest bottler in the United States, with a market cap of $10.2 billion.461 CEO and Chairman Frank Harrison is an early adopter of faithdriven leadership.462 As stated in its annual report, COKEÊs purpose statement is: „To honor God in all we do. To serve others. To pursue excellence. To grow profitably.‰463 COKE integrates faith into its corporate governance with a full-time chaplain,

bible study, and discipleship mentorship programs at all locations.464

SovereignÊs CapitalÊs list of CEOs and its methodology remain proprietary. Thus, it is not easy to observe how companies in the Flourish Fund incorporate faith into their corporate governance. For example, in 2025, the biotechnology company Amicus Therapeutics was the fundÊs largest holding.465 Unlike COKE, AmicusÊ CEO Brad Campbell does not discuss faith in his annual CEO letters, nor do the companyÊs filings or reports mention faith.466 The Flourish FundÊs prospectus acknowledges the risk inherent in its investment approach.467 The fund notes the presence of „Faith-Driven Leadership Investing Risk,‰ which means it may underperform funds that do not „consider faithdriven leaders,‰ yet the fund cannot guarantee that the companies selected align with biblical values.468

The above case studies illustrate that faith-based ethical screens apply multiple values-based criteria and may forgo profitability. Faith investorsÊ adherence to these religious values, even at the cost of growth, reinforces that ethical screening is a tool of religious expression. Like other faith investors, administrators of church pension plans use ethical screens to align investments with the churchÊs beliefs. As the next Part explores, church pension plans offer a particularly sharp lens for analyzing the tension between ethical screening and religious liberty.

Institutional investors are not a monolith·private mutual funds, public pension funds, sovereign wealth funds, and faith investors have vastly distinct motivations, fiduciary duties, incentives, and accountability structures.469 Yet, corporate law

tends to analyze institutional investors through the lens of agency theory, treating them as intermediaries or agents who are obligated to act on behalf of the asset owners, the principals. As Jill Fisch and Jeff Schwartz have argued, this model, which they term „beneficiary primacy,‰ ought not apply to public pension funds.470 As they explain, pension funds are principals (and not agents of beneficiaries) and primarily political actors who are accountable through a political process.471 Therefore, the decision to consider social issues in investments is fundamentally a political one. By recognizing that public pension funds are principals, and not agents of their beneficiaries, Fisch and Schwartz argue that fund managers may freely make prosocial investment decisions, such as divestment from firearms or engaging on other ESG issues.472 To be sure, public pension funds owe obligations to their beneficiaries, but those obligations are limited to paying the pensionÊs beneficiaries, whatever the terms of the pension fund mandate·not investing in a particular way.473

This Article extends that logic to faith investors and argues that certain institutional faith investors, such as church pension plans, are primarily religious actors who are accountable to their religious institutions and orders and only contractually to their beneficiaries. Therefore, like public pension plans, church pension plans are free to make faith-aligned decisions, even when those decisions are value-destroying. Certainly, there may be contractual limitations to this freedom, depending on what the individual church pension plan has promised to its beneficiaries, but that is legally distinct from a fiduciary duty to maximize the church pension planÊs assets. Moreover, as primarily religious actors, church pension plans should receive even greater judicial scrutiny under the Free Exercise Clause, RFRA, and state religious liberty statutes, protections that do not extend to public pension plans.

Despite these unique attributes, faith investors have found themselves in the „big tent‰ of ESG investors, which includes socially responsible investors, impact investors, large institutional

investors, and pension funds. This is primarily due to path dependency·recall that faith investors and other socially responsible investors joined forces to oppose apartheid and advocate for other social issues in the 1960s.474 The ESG movement followed decades later and did not gain prominence until after 2010, as institutional investors began linking social risks to financial risks.475 Over time, the normative thrust of social issues receded into the background, and faith investors began framing their shareholder advocacy in ESG „risk-adjusted return‰ terminology.476 Today, the ESG movement is under fierce attack, and faith investors are being targeted too. The main line of attack is that institutional investors are violating their fiduciary duties by prioritizing values over their obligation to maximize portfolio returns for beneficiaries.477 Proponents, including faith investors, argue that ESG or other prosocial investments are consistent with the value maximization norm, at least if we measure long-term sustainable returns.478

This Article argues that faith investors need not justify their religiously motivated ethical screening in financial terms. Climate risk may be financially material for most corporations but a sincerely held religious belief can be a necessary and sufficient condition to justify faith investorsÊ decision to divest from the fossil fuel industry. Indeed, faith investors are distinct from other private institutional investors, primarily, because they pursue myriad religious goals, including funding missions, building churches, and advocating against human rights abuses. Unlike private asset managers or mutual funds, which are only beginning to develop systems to gather input from their beneficiaries, many religious institutional investors already have wellfaith established governance structures to ensure this

alignment.479 Faith investing is historically rooted in valuesbased investing as an end, as opposed to solely a means to achieve financial returns. Ultimately, these are religious decisions.

There is limited case law addressing whether courts can scrutinize the religiously motivated ethical screening by church pension plans. The most notable case, Basich v. Board of Pensions (1995), involved a divestment policy adopted by the pension plan administered on behalf of the Evangelical Lutheran Church in America (ELCA).480 In response to the Lutheran World Federation AssemblyÊs declaration that apartheid was „so contrary to the Lutheran understanding of believers in Christ that it must be rejected as a matter of faith itself,‰ the ELCA adopted a policy directing its pension funds to divest from South Africa.481 A group of beneficiaries challenged the policy and argued that the pension fund owed them a fiduciary duty to maximize returns.482 The Basich court concluded that it lacked subject matter jurisdiction.483 In doing so, it emphasized that the ELCAÊs decision to divest fell within its religious authority, and judicial intervention would „create excessive entanglement between church and state‰ in violation of the First Amendment.484 Basich reflects the church autonomy doctrine because the court deferred to the legislative authority of the church to enact policies that „further its social and doctrinal goals of opposing apartheid.‰485 The court also emphasized that the ECLA has a dual mandate to „provide for pastorsÊ retirement needs and assist the ELCA in accomplishing doctrinal goals.‰486 Thus, review of divestment policies would amount to an unconstitutional review of church doctrine.487 The Basich court also relied on prior religion clause cases that constrain courts from scrutinizing the

motives of religious actors.488 In sum, the court concluded that the Churchwide Assembly was the appropriate forum for determining the fundÊs investment policy and that its mission was properly both to provide for the pastorsÊ retirement needs and to further social and doctrinal goals.489

However, this raises the issue of whether all fiduciary claims relating to church investment decisions are protected from judicial review, or just the religiously motivated ones. And more problematically, whether a court can even decide if the decision was religiously motivated in the first place. This concern is partially what drove Congress to exempt religious organizations from ERISA, the federal legislation that requires administrators of private pension plans to act solely in the interests of beneficiaries.490 The Basich courtÊs reasoning aligns with CongressÊs decision to exempt pension plans administered by religious organizations, or „church plans,‰ from ERISA to avoid excessive entanglement with religion in violation of the first amendment to the Constitution.491

ERISAÊs legislative history reflects concerns about this excessive entanglement. The Senate Finance Committee expressed that those activities necessary for the ActÊs execution, such as books and records examinations, may „be regarded as an unjustified invasion of the confidential relationship that is believed to be appropriate with regard to churches and their religious activities.‰492 Today, the church plan exemption is broadly applied:

An organization need not be established by a church to fall within the church plan exception, so long as it is „maintained‰ by an organization that is controlled by or associated with a church.493

The fiduciary duties of church plans are, therefore, dictated by state contract and trust law.494 The specific investment agreements between plan beneficiaries and employers detail the contractual duties of plan administrators.495 Yet, as discussed above, if the provision relates to a religiously motivated action, such as when funds „invest in ways that are compatible with the social policies of the ELCA,‰496 then courts will generally not intervene in the churchÊs decision-making process. This judicial deference is consistent with how courts handle fraud claims and property disputes involving religious organizations.497 While

courts can, and do, adjudicate such claims when they implicate purely secular matters, such as pure financial fraud, when a dispute requires evaluating religious doctrine, courts have ruled that the First Amendment mandates judicial deference.498

Although ERISA does not apply to church pension plans· unless the religious organizations opt in· many states have enacted legislation that incorporates ERISAÊs exclusive benefit rule.499 The exclusive benefit rule imposes fiduciary duties on church pension plan administrators, requiring them to act solely in the financial best interests of the planÊs beneficiaries. For example, Rhode Island and New York have enacted legislation requiring church pension plans to comply with ERISA,500 while many other states apply the Prudent Investor Rule, which also imposes fiduciary duties on plan administrators, to religious organizations.501

For example, in Johnson v. The Evangelical Lutheran Church in America, a Minnesota court ruled that a church plan was subject to breach of fiduciary duty claims for underfunding a retirement plan.502 The court held that MinnesotaÊs Prudent Investor Act applied to ELCAÊs pension plan, and the church was obligated to act in the best interests and the sole benefit of the

plan participants.503 Likewise, in Bacon v. Board of Pensions of the Evangelical Lutheran Church in America, the plaintiff pastors claimed that the church fund selected poorly performing investments, including „social purpose funds‰ that were consistent with religious teachings, and charged excessive fees, violating fiduciary duties.504 The Minnesota Court of Appeals reversed the district courtÊs ruling, stating that the remaining claims were secular, related to excessive fees, and were not tied to religious doctrine.505 Moreover, the plaintiffs in Bacon conceded that Basich bars any challenge based on the ELCAÊs religiously motivated policy decision.506

Even in states that do not explicitly regulate church plans, such as California, state rules governing fiduciary duties still provide protections. For example, the California State Treasurer has stated that a pension board or committee of a church plan is considered a fiduciary and, therefore, required by California law to act solely and exclusively in the best interest of plan participants and their beneficiaries.507 Thus, it remains an open question whether a court may apply a neutral principle of law to evaluate a fiduciary claim against a church pension plan.

The foregoing discussion has highlighted the tension between state trust law, which imposes fiduciary duties on pension plans, including Church pension plans, and the religious liberty of faith investors. The same logic that prompted Congress to exempt church pension plans from ERISA should apply to state trust law. While church pension plan beneficiaries may be entitled to contractual remedies, the obligations are not fiduciary in nature. Laws that impose fiduciary obligations on church pension plans risk infringing on the religious liberty of the religious institutions that administer such plans. This potentially gives rise to novel claims for faith investors who are currently caught in the crossfire of the anti-ESG movement and subject to a growing wave of local, state, and federal legislation and regulation.

These laws do not target religion·yet they implicate long-standing faith-aligned religious practices.

This Article concludes with the application of ethical screen-

ing in one more context·faith-aligned mutual funds.

In 2021, the rapid proliferation of ESG funds and ETFs prompted the SEC to focus on greenwashing and bring several enforcement actions against banks.508

As detailed in Part I, faith-aligned mutual funds and ETFs are increasingly popular public-market investment vehicles for faith-based investors.509 Faith investors also faced scrutiny in 2024, when the SEC fined Inspire for failing to implement its promised „biblically responsible investing‰ strategy.510 Specifically, the SEC charged Inspire with violating multiple provisions of the Advisers Act and the Investment Company Act and made two claims.511 First, Inspire departed from its own screening criteria by investing in companies that „engaged in prohibited activities.‰512 Second, it misled investors regarding its research

processes.513 Ultimately, the SEC found that Inspire had invested in companies that did not „align with biblical values,‰ which were defined to include „any . . . participation in‰ issues from LGBT philanthropy to human rights exploitation.514 Inspire chose to settle, and it did not raise any claims of religious liberty, but could it have done so?515 Could Inspire have argued, for example, that in assessing the level of permissible „participation,‰ the SEC had to weigh ecclesiastical matters? Or that its decision to exempt certain corporations was based on its sincerely held religious beliefs, and determining which corporations Jesus would approve of investing in is a paradigmatic example of a religious inquiry?

Concededly, InspireÊs claim that it used a „data-driven . . . methodology,‰ when it allegedly did not, can probably be evaluated using secular principles of law.516 Still, this example raises a new question: Is faith-washing distinct from greenwashing? And is the SECÊs authority far more limited with respect to this regulatory oversight? To make this argument more poignant, consider this hypothetical: imagine that InspireÊs investment policies state that it selects corporations for its WWJD fund based on prayer, revelation, or divine guidance. By regulating this, would it be violating InspireÊs religious liberty? At the same time, if the SEC refrains from scrutinizing InspireÊs policy further and defers to the sincerity of its religious beliefs, how can it protect investors?

According to Hosanna-Tabor, the Free Exercise and Establishment Clauses, taken together, prevent the government from weighing in on exclusively ecclesiastical issues.517 Moreover, under the church autonomy doctrine, discussed above, religious institutions can „decide for themselves, free from state interference, matters of church government as well as those of faith and

doctrine.‰518 A religious institutionÊs decisions regarding how it invests its assets is, at least arguably, a matter of church governance. As the court in Hosanna-Tabor emphasized, when a church organization has made a decision, „the legal tribunals must accept such decisions as final.‰519 While religious institutions have been liable for fraud, when the fraud relates to religious claims, courts tend to refrain from questioning the sincerity or reasonableness of the religious belief.520 This creates an obvious puzzle: The SECÊs mandate is to protect investors by providing as much information as possible, yet faith investors can escape regulatory scrutiny by not detailing or disclosing their internal methodologies and decision-making processes. In fact, the less precise and more religious the language, arguably the less the SEC can regulate it.

Certainly, one distinction here is that Inspire is not a church, but a limited liability company (LLC), albeit one with a clearly biblically aligned mission.521 But the principles of antientanglement arguably apply to the religious orders that create the screening methodology. The Catholic ETFs help illustrate this point. As discussed in Part III.A, the Knights of Columbus continuously screen these investments to ensure consistency with the values in the Socially Responsible Investment Guidelines of the USCCB.522 This close nexus between the Catholic Church and the administration of the ethical screens increases the risk of excessive entanglement. Moreover, given the CourtÊs extension of religious liberty to for-profit entities, the provider of faith-aligned ETFsÊ status as for-profit corporations may not matter much. Indeed, these corporations or LLCs could readily

seek exemptions from anti-ESG legislation or regulation under Hobby Lobby and its progeny.523

Finally, these concerns regarding faith-washing may also emerge if the SEC chooses to enforce the Names Rule against biblically aligned mutual funds.524 In an attempt to combat greenwashing and other misleading fund naming practices in 2023, the SEC issued its first overhaul of the Names Rule in twenty years.525 The amendments require investment funds that include „Environmental, Social, or Governance factors‰ in their names to invest at least eighty percent of their assets in investments corresponding to those factors.526 The amendments reflect the SECÊs longstanding practice of regulating the names of registered funds to ensure they are truthful.527 We can expect the truthfulness of ESG claims to be scrutinized by the current SEC, which has extended the compliance dates for the amendments, but is proceeding with the revised Names Rule amendments.528 Yet, assessing whether a faith fundÊs assets correspond to religious criteria could create an entanglement between the state and the church.

As this Part reveals, anti-ESG laws could limit the use of ethical screening by both church pension plans and mutual

funds. This raises religious liberty concerns that have been overlooked by policymakers.

CONCLUSION

The underlying assumption animating scholarly and policy debate is that adherence to progressive values, such as reproductive justice or diversity, is at odds with religious liberty.529 However, as this Article has illuminated, even within Christian denominations investors are heterogeneous and transcend any polarized account.530 It has drawn attention to the contradiction in a policy agenda that strengthens religious liberty, while restricting investorsÊ freedom to incorporate environmental and social values into their investment practices.

in the United States,

faith

Many faith investors, wielding billions of dollars, have long influenced corporate governance·from opposing apartheid and advocating for civil rights in the 1970s, to pushing for climate action and diversity today. More recently, other faith investors are aligning their investment strategies to advocate for causes, including opposing firearm restrictions or supporting fossil fuel drilling. These faith investors use the traditional tools of ESG investors·from ethical screening to shareholder engagement· to express their religious values. Moreover, while these investors are Christian, they are ideologically diverse. Indeed, the story of faith investors cannot be reduced to a bumper sticker.

The activities of religious investors acting on sincerely held beliefs·whether conservative or progressive·may be protected by religious liberty doctrine. The anti-ESG movementÊs attempts to restrict so-called woke investing practices must contend with this tension.

--- FOOTNOTES ---

† Professor of Law, University of California, Davis School of Law. Thank you to Afra Afsharipour, Steven Bainbridge, Ash Bhagwat, Alan Brownstein, Jill Fisch, Stavros Gadinis, Sarah Haan, James Nelson, Frank Partnoy, Elizabeth Pollman, Elizabeth Sepper, Omari Simmons, Tim Smith, Brian Soucek, Robert Tuttle, and the participants in the Culp Colloquium (Harvard Law School), Law and Economics Workshop (UC Berkeley School of Law), Women in Law and Finance Annual Conference (The Wharton School), the National Business Law Scholars Conference (UC Davis School of Law), the George Washington Law School Faculty Workshop, the Tulane Law School Annual Conference, the American Association of Law Schools Annual Conference, and the BYU Winter Deals Conference. I am grateful for the many conversations with faith investors and practitioners who wish to remain anonymous, and to Cole Gray, Ryan Parsons, Charlie Rieder, and Grant Rosinko for their research assistance. I also thank the excellent editors at Minnesota Law Review, particularly Megan Niemitalo and Nico Patch. Copyright © 2026 by Amelia Miazad.

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1. See Richard C. Schragger et al., Reestablishing Religion, 92 U. CHI. L. REV. 199, 227–54 (2025) (describing the expansion of religious liberty under both the Free Exercise and Establishment Clauses).

2. Press Release, U.S. House Comm. Fin. Servs., Committee Republicans Introduce Measures to Combat the Influence of ESG Initiatives in AmericaÊs Financial System (July 25, 2023), https://financialservices.house.gov/news/ [https://perma.cc/TA6T-YQBN] documentsingle.aspx?DocumentID=408927 („ESG is an evil pollutant that must be eradicated from corporations and businesses.‰). ESG refers to „environmental, social, and governance‰ and ESG investing generally describes efforts to align investments or business practices with managing environmental and social issues or risks, but the concept remains loosely defined. For a comprehensive history of the term, see Elizabeth Pollman, The Making and Meaning of ESG, HARV. BUS. L. REV. 403, 405–07 (2024) (explaining that „trillions‰ of dollars have flowed into ESG-labeled investment products, yet there is a lack of clarity around ESG terminology).

3. See Fact Sheet: President Donald J. Trump Protects American Investors from Foreign-Owned and Politically Motivated Proxy Advisors, WHITE HOUSE (Dec. 11, 2025), https://www.whitehouse.gov/fact-sheets/2025/12/factsheet-president-donald-j-trump-protects-american-investors-from-foreignowned-and-politically-motivated-proxy-advisors [https://perma.cc/3GFR -SFFM] (equating ESG to „leftist policies‰ and „radical politically-motivated agendas‰ being advanced on companies by foreign-owned proxy giants).

4. Protecting American Investors from Foreign-Owned and Politically Motivated Proxy Advisors, Exec. Order No. 14,366, 90 Fed. Reg. 58503 (Dec. 11, 2025) (directing federal agencies to increase oversight of proxy advisory firms). 5. Eradicating Anti-Christian Bias, Exec. Order No. 14,202, 90 Fed. Reg. 9365 (Feb. 6, 2025) (establishing a task force to review and recommend actions to eliminate unlawful anti-Christian policies, practices, or conduct by executive departments and agencies).

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6. See Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 736 (2014) (holding that Hobby Lobby, a closely held corporation, could deny its employees contraceptive coverage due to religious objections); Masterpiece Cakeshop, Ltd. v. Colo. C.R. CommÊn, 138 S. Ct. 1719, 1731–32 (2018) (holding that the Colorado Civil Rights Commission violated the Free Exercise Clause by demonstrating hostility toward the bakerÊs religious beliefs); see THE RISE OF CORPORATE RELIGIOUS LIBERTY (Micah Schwartzman et al. eds., 2016); see also Alan J. Meese & Nathan B. Oman, Hobby Lobby, Corporate Law, and the Theory of the Firm: Why For-Profit Corporations Are RFRA Persons, 127 HARV. L. REV. F. 273, 274 (2014) (discussing the prevalence of religion in business).

7. See James D. Nelson, Corporate Disestablishment, 105 VA. L. REV. 595, 600–06 (2019) (discussing the expansion of corporate religious liberty); see also Melissa Murray, Inverting Animus: Masterpiece Cakeshop and the New Minorities, 2018 S. CT. L. REV. 257 (2018) (analyzing the impact of Masterpiece Cakeshop on antidiscrimination law).

8. The scholarly debate at the intersection of religious liberty, corporate law, and the First Amendment has largely focused on the conservative Christian movement. See, e.g., Elizabeth Sepper, Gays in the Moralized Marketplace, 7 ALA. C.R. & C.L. L. REV. 129 (2015) (discussing the „moralized marketplace‰ that erodes LGBTQ+ rights); Amanda Shanor & Sarah E. Light, Anti-Woke Capitalism, the First Amendment, and the Decline of Libertarianism, 118 NW. U. L. REV. 347, 402–03 (2023) („These two groups·the anti-woke and Christian conservative legal movements·might aptly be described as the new coalition that is likely to influence the future direction of the First Amendment.‰). This body of scholarship addresses important normative and policy issues at the intersection of religious liberty and civil liberties. This Article offers new insights by examining Christian investors whose values span ideological divides.

9. Hobby Lobby, 573 U.S. at 723 (attributing the corporationÊs statutory

exemption to the sincerely held religious beliefs of its owners).

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10. See infra Part IV.A (discussing faith-driven shareholder engagement). 11. Although many faiths, including Judaism and Islam, have rich traditions of faith-based investing, this Article limits the term „faith investors‰ to Christian investors because of their unique impact on corporate governance in the United States.

12. For example, the group „Clergy and Laymen Concerned About Vietnam,‰ formed by Reverend Richard R. Fernandez protested at KodakÊs 1967 shareholder meeting. Sarah C. Haan, Civil Rights and Shareholder Activism: SEC v. Medical Committee for Human Rights, 76 WASH. & LEE L. REV. 1167, 1180 n.57 (2019). See generally Jess Yoder, The Protest of the American Clergy in Opposition to the War in Vietnam, 17 COMMCÊN Q. 47, 51–57 (1969) (discussing the clergyÊs responses to the war in Vietnam). 13. See Nelson, supra note 7, at 600–05 (discussing the rise of religious involvement in corporate governance). To be sure, many investors, including many faith investors, view ESG integration or values-aligned investing as financially prudent, particularly in the long-term. 14. Laura Berry, Heeding the Outsider on Market Reform, REFLECTIONS, Spring 2010, at 20, 21; see About ICCR, INTERFAITH CTR. ON CORP. RESP., https://www.iccr.org/about-iccr (discussing ICCRÊs history and mission). 15. Reaffirming Our Commitments in Light of the 2024 Election, INTERFAITH CTR. ON CORP. RESP. (Nov. 7, 2024), https://www.iccr.org/ [https://perma.cc/ reaffirming-our-commitments-in-light-of-the-2024-election 4BL4-H39J] (issuing ICCRÊs post-election statement, reaffirming solidarity with marginalized groups). 16. Religious Liberty and H.R. 2802, the First Amendment Defense Act (FADA): Hearing on H.R. 2802 Before the H. Comm. on Oversight & GovÊt Reform, 114th Cong. 85–86 (2016) (statement of Rep. Jim Jordan) („[T]hat is exactly why we have a First Amendment. You do not have to check your beliefs . . . . ThatÊs what this country is about.‰).

[https://perma.cc/JWK8-3XZJ]

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17. Press Release, House Judiciary Comm., Jordan and Massie Demand Information from over 130 Companies Surrounding Their Involvement with Woke ESG Cartel Climate Action 100+ (July 30, 2024), https://judiciary.house.gov/ media/press-releases/jordan-and-massie-demand-information-over-130 -companies-surrounding-their (announcing committee letters seeking information on companiesÊ participation in Climate Action 100+).

[https://perma.cc/NRC6-KBGB]

18. STAFF OF H. COMM. ON THE JUDICIARY, 118TH CONG., SUSTAINABILITY SHAKEDOWN: HOW A CLIMATE CARTEL OF MONEY MANAGERS COLLUDED TO TAKE OVER THE BOARD OF AMERICAÊS LARGEST ENERGY COMPANY (Comm. Print 2024).

19. Steven P. Millies, Jim JordanÊs Attack on Catholic GroupsÊ Ethical Investing, NATÊL CATH. REP.: EARTHBEAT (Aug. 9, 2024), https://www.ncronline .org/earthbeat/politics/jim-jordan-s-attack-catholic-groups-ethical-investing [https://perma.cc/CK5R-8VJ2] (reporting on Rep. Jim JordanÊs criticism of Catholic organizationsÊ ESG and ethical investing practices).

20. Mark Pattison, House Committee Accuses Socially Responsible Investor Groups of Breaking Antitrust Law, NATÊL CATH. REP.: EARTHBEAT (Aug. 9, https://www.ncronline.org/news/house-committee-accuses-socially 2024), -responsible-investor-groups-breaking-antitrust-law [https://perma.cc/63LG -4A3B] (reporting on Catholic organizationsÊ responses to congressional letters targeting faith-based investors).

21. Mike Ferguson, Stated Clerk Responds to Congressional Inquiry on MRTIÊs Corporate Engagement, PRESBYTERIAN CHURCH (U.S.A): PRESBYTERIAN MISSION (Sept. 12, 2024), https://centernet.pcusa.org/story/ stated-clerk-responds-to-congressional-inquiry-on-mrtis-corporate-engagement [https://perma.cc/3L3W-Y2NU] (responding to congressional scrutiny of the Presbyterian ChurchÊs faith-based corporate engagement activities).

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22. Comm. for Religious Liberty, Annual Report on the State of Religious Liberty in the United States, U.S. CONF. OF CATH. BISHOPS (2025), https://www.usccb.org/resources/USCCB_2025_Religious_Liberty_Annual_ Report.pdf [https://perma.cc/6N7A-ZNDH]. 23. Comm. on Budget & Fin., Socially Responsible Investment Guidelines for the United States Conference of Catholic Bishops, U.S. CONF. OF CATH. (2021), https://www.usccb.org/resources/Socially%20Responsible% BISHOPS 20Investment%20Guidelines%202021%20(003).pdf [https://perma.cc/ADL4 -FPJC] (providing, in Policy V.2, that the USCCB „will encourage companies through corporate dialogues, proxy voting, and support of shareholder resolutions to establish greenhouse gas emission reduction goals . . . and mitigate climate change‰). The policy also refers to the ChurchÊs support of the Paris Agreement. See id. (committing to investing in companies whose business models are consistent with emission reduction goals set forth in the Paris Agreement and considering divesting from companies who do not meet the standards consistently). 24. See Complaint, Interfaith Ctr. on Corp. Resp. v. Paxton, No. 25-CV01803 (W.D. Tex. Nov. 10, 2025). 25. United Church Funds Sues to Block Enforcement of Texas Law, UNITED CHURCH FUNDS (Nov. 15, 2025), https://ucfunds.org/ucf-sues-to-blockenforcement-of-texas-law [https://perma.cc/RK3M-GQUF] (discussing litigation challenging enforcement of a Texas law affecting faith-based investors). 26. See WILLIAM SHAKESPEARE, HAMLET act 3, sc. 4, l. 207 (referring to being harmed by oneÊs own scheme).

27. While faith investing spans many religions, this Article examines the distinctive role that Christian investors in the United States have played in corporate governance.

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28. See infra Parts I–IV. Given the breadth and diversity of Christian investors in the United States, this Article does not claim to provide a comprehensive account of Christian investing. Rather, it focuses on a few salient examples and offers case studies of the Catholic Church, the Methodist Church, and other denominations. The descriptive account draws on a range of sources, including semi-structured interviews with faith investors across denominations, observations at faith investor convenings, and archival materials, including shareholder resolutions and engagement memoranda dating to the early 1970s. 29. See generally Erwin Chemerinsky, History, Tradition, the Supreme Court, and the First Amendment, 44 HASTINGS L.J. 901 (1993) (analyzing the role of history and tradition in Supreme Court First Amendment jurisprudence). The history of faith investing, of course, dates back to the early days of Christianity. See generally ROBERT B. EKELUND ET AL., SACRED TRUST: THE MEDIEVAL CHURCH AS AN ECONOMIC FIRM (1996).

30. John Wesley, The Sermons of John Wesley- Sermon 50: The Use of (Jan. 24, 2026), http://wesley.nnu.edu/

Money, WESLEY CTR. ONLINE john-wesley/the-sermons-of-john-wesley-1872-edition/sermon-50-the-use-ofmoney [https://perma.cc/5PG6-4QTW] (articulating moral limits on the use and accumulation of wealth). Quakers have also refused to invest in companies that profit from war or slavery since the 1898 founding of the Friends Fiduciary Corporation, which holds that „investing according to Quaker values supports longterm company and shareholder value.‰ About Us, FRIENDS FIDUCIARY, https://friendsfiduciary.org/about-us [https://perma.cc/75LC-UR2N]; see infra

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Part III; see also Peter D. Kinder & Amy L. Domini, Social Screening: Paradigms Old and New, 6 J. INV. 12 (1997) (discussing historical and contemporary approaches to value-based investment screening).

31. DAVID VOGEL, LOBBYING THE CORPORATION 161–62 (1978) (discussing corporate political activity and interest-group influence). The National Council of Churches is a coalition of thirty-seven Protestant denominations. See About Us, NATÊL COUNCIL OF THE CHURCHES OF CHRIST IN THE USA, https://national councilofchurches.us/about-us [https://perma.cc/PFV5-FW4Z]. 32. VOGEL, supra note 31, at 161–62. 33. Our History, IMPAX ASSET MGMT., https://impaxam.com/about-us/ history [https://perma.cc/7XNA-2J7E] (describing the firmÊs origins and development as a sustainable investment manager). 34. See infra Part IV.A (discussing faith-driven shareholder engagement). 35. See id. 36. Id.; see, e.g., 50 Years of Impact: ICCR Member Advocacy on Racial Justice and Diversity, Equity and Inclusion, INTERFAITH CTR. ON CORP. RESP. (2025), https://my.visme.co/view/epjyd30m-iccr-racial-justice-timeline-2025 [https://perma.cc/WK7C-DK6C] (stating that church investors filed „first-oftheir-kind shareholder resolutions with nine companies‰ on this topic in 1974); infra notes 277–78. For an example of a contemporary report, see 2020 Employer Information Report EEO-1 Consolidated Report, KRAFT HEINZ CO. (2020), https://www.kraftheinzcompany.com/pdf/KHC-ConsolidatedEEO1 Report-2020.pdf [https://perma.cc/CFB8-732M]. The Kraft proposal was withdrawn for agreement, and the company still discloses its EEO-1 reports. See Equal Employment Opportunity, KRAFT HEINZ CO., https://www.kraft heinzcompany.com/eeo.html [https://perma.cc/SH7U-5UYM] (providing the companyÊs most recent EEO-1 reports).

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37. See Exxon Mobil Co., Proxy Statement (Schedule 14A) 80 (Apr. 11, 2024); see also infra Part IV.A (discussing the ICCR). ICCR includes secular investors and NGOs, such as Arjuna Capital, too. See Annual Report 2024-2025, INTERFAITH CTR. ON CORP. RESP. (2025), https://www.iccr.org/wp-content/ [https://perma.cc/Y98F uploads/2025/07/ICCR-2024-2025-AR-FINAL.pdf -UXNV] (listing affiliate membership of the organization). Still, ICCR functions as a forum for hundreds of faith investors to collaborate with secular investors on shareholder advocacy. See id. 38. See infra Part II.A (discussing the foundational principles of faith investors).

39. See generally Shipeng Yan, Fabrizio Ferraro & Juan (John) Almandoz, The Rise of Socially Responsible Investment Funds: The Paradoxical Role of the Financial Logic, 64 ADMIN. SCI. Q. 466 (2019) (analyzing the growth of socially responsible investment funds and the role of financial-market logic). 40. See, e.g., State of Play for Faith-Based Investment Strategies in Public Markets, BRIGHTLIGHT 4–5 (2024), https://static1.squarespace.com/static/ 638ebbc5514fd7313f399d8e/t/671942e10a53f4696db43835/1729708771013/ [https://perma.cc/GR7Y-YTCN] Listed+Markets+Research+Paper+2024.pdf (providing an overview of the state of faith-based investing and finding 17.0% year-on-year growth in assets allocated to faith-based funds).

41. James Gard, Faith-Based Investing Gathers Momentum, MORNINGSTAR (Oct. 3, 2023), https://global.morningstar.com/en-gb/personal [https://perma.cc/8CS3 -finance/faith-based-investing-gathers-momentum -6S3S] (discussing the rise of faith-based investing for Christians and Muslims). 42. Discover Inspire ETFs, INSPIRE (Dec. 31, 2025), https://www.inspireetf .com/etfs [https://perma.cc/A2HH-K7GA] („Inspire is the worldÊs largest Christian ETF provider, managing over $2.5 billion in Christian ETF assets . . . .‰); see BRIGHTLIGHT, supra note 40, at 7, 25.

43. See id. (listing Inspire ETFs and their tickers).

44. See infra Part III for an overview of religious liberty.

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45. Id.

46. Press Release, Religious Freedom & Bus. Found., American Airlines, Accenture Earn Top Ratings on New REDI Index and Monitor, a Record Number of Companies Join National Faith@Work Conference (May 20, 2024), https://religiousfreedomandbusiness.org/2/post/2024/05/report-religious -inclusion-no-longer-next-big-thing-surge-of-religiously-inclusive-companies-isthe-big-thing-now [https://perma.cc/BS7V-9JWJ] (announcing increased corporate participation in religious-inclusion initiatives). The demand for faithaligned investing products and services is growing in the private markets too, from „redemptive real estate‰ to Biblical Bitcoin. See Sheila Dolinger, What Is Redemptive Real Estate?, NATÊL CHRISTIAN FOUND. (July 18, 2024), [https:// https://www.ncfgiving.com/stories/what-is-redemptive-real-estate perma.cc/U6YV-S3SJ] (describing faith-oriented real estate investments that integrate religious services); see also BITCOIN AND THE BIBLE (Apple Podcasts, May 5, 2024), https://bitcoinandthebible.com [https://perma.cc/SQ79-EZBA] (promoting a faith-based approach to cryptocurrency). Such real estate investments may, for example, provide an on-site chaplain to tenants. See Dolinger, supra note 46. 47. See infra Part II.B.2; see also Sharon Delgado, Next Step for UMC Net Zero Agencies: Divest from Fossil Fuels, UNITED METHODIST CREATION JUST. MOVEMENT: BLOG (Jan. 25, 2025), https://umcreationjustice.org/next-step-for[https://perma.cc/295A-5SCD] umc-net-zero-agencies-divest-from-fossil-fuels (urging United Methodist agencies to divest from fossil fuels as part of faithbased climate commitments); Appeal Letter to the National Association of Evangelicals on the Issue of Global Warming, CORNWALL ALL. (Jan. 31, 2006), https://cornwallalliance.org/appeal-letter-to-the-national-association-of [https://perma.cc/RQR8-7GLK] -evangelicals-on-the-issue-of-global-warming (urging the National Association of Evangelicals to refrain from taking a position on climate change).

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48. U.S. CONST. amend. I; Religious Freedom Restoration Act, 42 U.S.C.

§§ 2000bb to bb-4 (1994). 49. See infra Part V.B. for a discussion of the sincerity standard in religious liberty cases. See generally Nathan S. Chapman, Adjudicating Religious Sincerity, 92 WASH. L. REV. 1185 (2017).

50. Shareholder Proposals: Staff Legal Bulletin No. 14M (CF), SEC. & EXCH. COMMÊN: DIV. OF CORP. FIN. (Feb. 12, 2025), https://www.sec.gov/about/ shareholder-proposals-staff-legal-bulletin-no-14m-cf [https://perma.cc/HEC6 -RUG4] (providing updated SEC staff guidance on shareholder proposal exclusions); C. Alex Bahn et al., SEC Staff Issues New Guidance on Shareholder Proposals and Rescinds Staff Legal Bulletin No. 14L, WILMERHALE (Feb. 14, 2025), https://www.wilmerhale.com/en/insights/blogs/keeping-current-disclosure-andgovernance-developments/20250214-sec-staff-issues-new-guidance-on -shareholder-proposals-and-rescinds-staff-legal-bulletin-no-14l [https://perma .cc/9GV4-DBWN] (summarizing how Bulletin 14M affects shareholder review); Paul S. Atkins, Chairman, Sec. & Exch. CommÊn, Keynote Address at the John L. Weinberg Center for Corporate Governance 25th Anniversary Gala (Oct. 9, 2025), https://www.sec.gov/newsroom/speeches-statements/atkins-10092025keynote-address-john-l-weinberg-center-corporate-governances-25th -anniversary-gala [https://perma.cc/2KAD-4N58] (discussing the SECÊs approach to corporate governance and shareholder engagement); see Jill Fisch, Sarah Haan, Anne Lipton & Amelia Miazad, Stockholder Proposals·Law and Policy Considerations, HARV. L. SCH. F. ON CORP. GOVERNANCE (Dec. 9, 2025), https://corpgov.law.harvard.edu/2025/12/09/stockholder-proposals-law-and -policy-considerations [https://perma.cc/E4HN-76UL] (examining how Chair AtkinsÊs interpretation of 14a-8 conflicts with Delaware law). 51. See infra Part V.B.

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52. See infra Part V.B (discussing church pension plans).

53. 29 U.S.C. § 1003(b)(2); see infra Part V.B (discussing how religious lib-

erty protects church pension plans).

54. David Levine, Kim Boberg & Louis T. Mazawey, Church Plan Litigation – Out of the ERISA Woods into the State Law Forest, GROOM L. GRP. (Dec. 28, 2021), https://www.groom.com/resources/church-plan-litigation-out-of-theerisa-woods-into-the-state-law-forest [https://perma.cc/9HBW-37F4]; see infra Part V.B (detailing how state laws have applied to church pension plans).

55. This argument builds on recent scholarship on public pension funds by Jill Fisch and Jeff Schwartz, who argue that state pension funds have been mischaracterized as agents of their beneficiaries, but are primarily political actors, and thus not bound by the fiduciary duties that apply to private asset managers. See Jill Fisch & Jeff Schwartz, The Singular Role of Public Pension Funds in Corporate Governance, 104 TEX. L. REV. 735, 735–36 (2026).

56. Basich v. Bd. of Pensions, 540 N.W.2d 82, 86 (Minn. Ct. App. 1995) (concluding the court lacked jurisdiction to resolve the dispute because it would require it to „entangle itself in issues of church doctrine‰); see infra Part V.B (discussing Basich). 57. Live Anti-ESG State Action Tracker, PLEIADES STRATEGY, https://www .pleiadesstrategy.com/pleiades-anti-esg-bill-tracker-state-legislation-attackson-responsible-investing [https://perma.cc/7Y7H-CKZ4] („Anti-ESG policies are designed to drive publicly managed funds to . . . curtail corporate engagement with . . . climate change, DEI (diversity, equity, and inclusion), workersÊ rights, and governance.‰). Curiously, the language of the anti-ESG movement is

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imbued with religious rhetoric·prominent members of the administration, such as Elon Musk, famously referred to ESG as „the devil incarnate.‰ Elon Musk (@elonmusk), X (formerly TWITTER) (Apr. 3, 2022, 12:14 AM), https://x.com/elonmusk/status/1510485792296210434 [https://perma.cc/WY5Q -HMZE]; see also Robert Netzley (@robertnetzly), X (formerly TWITTER) (Aug. 22, 2022, 1:28 PM), https://x.com/RobertNetzly/status/1561782255818657792 [https://perma.cc/SUN2-PTSB] („We must be clear-eyed about the very real agenda that anti-God cultural Marxists have deployed within ESG and oppose it.‰).

58. This Article introduces the term „faith-washing‰ to describe when organizations claim to align with religious or faith-based values without genuinely adhering to those principles. 59. See Press Release, Sec. Exch. CommÊn, SEC Charges Advisory Firm Inspire Investing with Misleading Investors Regarding Its Investment Strategy (Sept. 19, 2024) [hereinafter SEC Inspire Press Release], https://www.sec.gov/ newsroom/press-releases/2024-139 [https://perma.cc/AQE6-LJC4]; see also infra Part V (discussing Inspire); Melanie Waddell, Biblical ETF Firm Misrepresented Its Investing Strategy: SEC, THINK ADVISOR (Sept. 19, 2024), https://www.thinkadvisor.com/2024/09/19/biblical-etf-firm-misrepresented-itsinvesting-strategy-sec [https://perma.cc/HJP8-SFGG] (discussing the SECÊs fine and InspireÊs response).

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60. See Schragger et al., supra note 1 (explaining recent disruptive shifts in religious freedom); see also supra notes 3–4 (discussing current political pressures on religious freedom). 61. See, e.g., Lucian A. Bebchuk & Roberto Tallarita, The Illusory Promise of Stakeholder Governance, 106 CORNELL L. REV. 91, 98 (2020) (offering a critical view of ESG); Stavros Gadinis & Christopher Havasy, The Quest for Legitimacy: A Public Law Blueprint for Corporate Governance, 57 UC DAVIS L. REV. 1581, 1652 (2024) (arguing that corporations should legitimize their engagement on ESG issues by eliciting more input from stakeholders); Jennifer S. Fan, Woke Capital: The Role of Corporations in Social Movements, 9 HARV. BUS. L. REV. 441, 485–86 (2019) (describing concerns about a lack of accountability for corporate social commitments).

62. Whether corporate purpose must adhere to a shareholder wealth maximization norm remains one of the most important questions in corporate law. See Michael C. Jensen & William H. Meckling, Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, 3 J. FIN. ECON. 305, 305–06 (1976) (discussing the complexity of questions about firm structure); Lynn A. Stout, On the Rise of Shareholder Primacy, Signs of Its Fall, and the Return of Managerialism (in the Closet), 36 SEATTLE U. L. REV. 1169, 1172 (2013) („Limited in their ability to serve themselves, directors and executives instead chose to spend a fair amount of their time and energy serving their firms. At least, that is what seems to have occurred.‰ (footnote omitted ; Ann M. Lipton, Will the Real Shareholder Primacy Please Stand Up?, 137 HARV. L. REV. 1584, 1585 (2024) (book review) (noting that corporate purpose has been debated for over 100 years); see also Edward B. Rock, Essay, For Whom Is the Corporation Managed in 2020? The Debate over Corporate Purpose, 76 BUS. LAW. 363, 363 (2021) („One of the oldest corporate law issues·For Whom Is the Corporation Managed?·has become one of the hottest public policy issues.‰). 63. See Dorothy S. Lund, Asset Managers as Regulators, 171 U. PA. L. REV. 77, 95–130 (2022) (describing the nebulous role of asset managers); Benjamin Braun, Asset Manager Capitalism as a Corporate Governance Regime, in THE AMERICAN POLITICAL ECONOMY: POLITICS, MARKETS, AND POWER 270, 271–73 (Jacob S. Hacker et al. eds., 2021) (outlining the role of asset managers). 64. See infra Part V (discussing the SECÊs regulatory authority); Sean J. Griffith, WhatÊs „Controversial‰ About ESG? A Theory of Compelled Commercial Speech Under the First Amendment, 101 NEB. L. REV. 876, 877 (2023) (describing controversy in the SECÊs ESG rules).

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65. See Gard, supra note 41 (summarizing investment behavior for Christian and Muslim organizations); Faith-Based Investing Map, GLOB. IMPACT (2022), https://giin-web-assets.s3.amazonaws.com/ INVESTING NETWORK [https://perma.cc/ giin/assets/faith-based/faith-based-investing-map-v3.pdf 93RJ-QLE8] (summarizing the current faith-based investing landscape, including the „actors, resources, and services available‰); Inspire Growth ETF (NYSE: GLRY) Celebrates 5-Year Anniversary and 5-Star Morningstar Rating, MORNINGSTAR (Dec. 17, 2025), https://www.morningstar.com/news/pr-newswire/20251217la49167/inspire-growth-etf-nyse-glry-celebrates-5-year -anniversary-and-5-star-morningstar-rating [https://perma.cc/9VQ7-Y69R] (describing InspireÊs growth and success since 2020); Jennifer Sor, Faith-Based Investing is Having a Moment, BUS. INSIDER (Mar. 23, 2025), https://www .businessinsider.com/trump-christian-investing-faith-based-trump-trade -inspire-funds-2025-3 [https://perma.cc/PWK9-SKYR] (discussing the rise in faith-based investing and investment services); Dave Zellner, 2025 Saw Growing Momentum for Faith-Consistent Investing, FAITH INV. (Dec. 11, 2025), https://www.faithinvest.org/post/2025-saw-growing-momentum-for-faith -consistent-investing [https://perma.cc/NJ29-NX3K] (same).

66. See supra note 65.

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A. THE KEY PLAYERS

Churches, hospitals, universities, pensions, families/trusts, banks, and individuals.

Forums where faith investors can collaborate on investing or shareholder advocacy.

The Church of England, Church Pension Fund, Vatican Bank, Trinity Health

Interfaith Center for Corporate Responsibility, Faith-Driven Investor Network, Faith-Driven Entrepreneur Network, Christian Investment Forum

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67. See Alex Nicholls et al., Oxford Faith-Aligned Impact Finance Project Phase 1 Report, UNIV. OF OXFORD: SAþD BUS. SCH. 4 (2022), https://www.sbs .ox.ac.uk/sites/default/files/2022-10/oxfaif-phase-1-report.pdf [https://perma .cc/6SNZ-74KQ]. 68. See id. at 17 (displaying twenty-six known countries contributing to Christian-aligned capital).

69. Janet Nguyen, How Much Money Does „God‰ Have?, MARKETPLACE (Feb. 11, 2023), https://www.marketplace.org/2023/02/10/how-much-moneydoes-catholic-church-have [https://perma.cc/CKJ7-5HDF].

70. 2024 Annual Report: Rooted in Mission; Growing into the Future, WESPATH 2, 40 (2024), https://www.wespath.org/about-wespath/annual-report [https://perma.cc/H7RR-RLSV]. For an in-depth discussion of Wespath, see infra Part II.B.1.

71. Palash Ghosh, ESG Has Long Been Part of the DNA of Faith-Based Pension Funds, PENSIONS & INVS. (Mar. 29, 2024), https://www.pionline .com/esg/church-based-pension-funds-remain-anchored-esg-issues-despite-ongoing-controversy-over-movement [https://perma.cc/HLG3-P5UF]. 72. Id. 73. Id. („As a faith-based pension fund, there are additional considerations in the context of that fiduciary obligation. We are committed to supporting church values in all that we do.‰).

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74. See Nathan DiCamillo, Bound by Faith and Thrift: The Double-Edged Sword of Christian CUs, AM. BANKER (last updated Aug. 26, 2020), https://www.americanbanker.com/creditunions/news/bound-by-faith-andthrift-the-double-edged-sword-of-christian-credit-unions PS6Z-FNT7]. 75. Our History, CHRISTIAN CMTY. CREDIT UNION, https://www.mycccu .com/about-us/history [https://perma.cc/AP6H-HWRH]. 76. Mission, Vision, & Values, CHRISTIAN CMTY. CREDIT UNION, https://www.mycccu.com/about-us/mission-vision-values [https://perma.cc/ 3CRZ-W8DY]. 77. See Asset Managers, Positive Social Purpose Lending Program Intermediaries, Banks, Auditors and Consultants, WESPATH (last updated Mar. 9, https://www.wespath.org/retirement-investments/investment 2026), -information/asset-managers [https://perma.cc/BF95-C4JQ].

[https://perma.cc/

78. See BlackRock Catholic Charities Growth & Income Fund, BLACKROCK (2026), https://www.blackrock.com/uk/literature/kiid/ucits_kiid-blackrock-catholic-growth-income-fund-a-acc-gbp-gb-gb00bfk3m961-en.pdf [https://perma.cc/KBN3-SE2Y]. 79. BRIGHTLIGHT, supra note 40, at 8. 80. Id. at 9–10.

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81. About Us, THRIVENT, https://www.thrivent.com/about-us

[https://

perma.cc/7239-99LF].

82. Annual Report 2024: Celebrating Impact, Performance and Growth, THRIVENT, https://www.thrivent.com/governance/annual-report-2024-thrivent [https://perma.cc/J2ZU-JK3P].

83. About Us, supra note 81. 84. Envision a World Transformed by Christian Investing, GUIDESTONE

FUNDS, https://www.guidestonefunds.com [https://perma.cc/V3ES-L4R5].

85. Our History, GUIDESTONE FUNDS, https://www.guidestonefunds

.com/About-Us/Our-History [https://perma.cc/5ZE2-UXRZ].

86. Id. 87. Christian Brothers Investment Services, Inc. (CBIS), CHRISTIAN BROS.

INV. SERVS., https://cbisonline.com/us [https://perma.cc/A6MW-RCZ9].

88. Jeffery A. McCroy, CEO Annual Message, CHRISTIAN BROS. INV. SERVS. https://cbisonline.com/us/wp-content/uploads/sites/2/2026/01/CBIS-

(2025), 2025-Letter.pdf [https://perma.cc/3BZ2-LNKX].

89. Who We Are, CHRISTIAN BROS. INV. SERVS., https://cbisonline

.com/us/who-we-are [https://perma.cc/M5UW-LCCF].

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90. A Purpose You Can Believe in, EVENTIDE, https://www.eventide

investments.com/purpose-and-values [https://perma.cc/7WMU-ZHMC].

91. Eventide Asset Management, LLC: Firm Brochure – Form ADV Part (2025), https://www.morganstanley.com/content/dam/ms [https://

2A, EVENTIDE 4 dotcom/en/wealth/investmentsolutions/pdfs/adv/Eventide-ADV.pdf perma.cc/PV7V-9RMP].

92. Our Founding Story, EVENTIDE, https://www.eventideinvestments

.com/our-founding-story [https://perma.cc/6PT2-JT2Q].

93.

About Us, CROSSMARK GLOB.

INVS., https://www.crossmark

global.com/about [https://perma.cc/TH8B-WHMV].

94. Crossmark Global Holdings Inc. AUM, HOLDINGS CHANNEL,

https://www.holdingschannel.com/aum/crossmark-global-holdings-inc-aum [https://perma.cc/74ZZ-B77C].

95. Why Crossmark?, CROSSMARK GLOB. INVS., https://www.crossmark

global.com [https://perma.cc/ANW7-2L47]. 96. See Our History, THRIVENT, https://www.thrivent.com/about-us/history [https://perma.cc/2CBX-Q2TV].

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97. See Become a Certified Kingdom Advisor, KINGDOM ADVISORS, https://kingdomadvisors.com/get-certified [https://perma.cc/97E3-H7AC]; Bruce Kelly, Christian Financial Advisor Designation Gains Traction at Edward Jones, INV. NEWS (Nov. 20, 2025), https://www.investmentnews.com/regulationand-legislation/christian-financial-advisor-designation-gets-traction-at-edward -jones/263177 [https://perma.cc/7YRH-Q3PH]. 98. Ron Blue, RETHINKING WEALTH 2019, http://rethinkingwealth.org/ ron-blue [https://perma.cc/AW6Y-83KV]. 99. See CKA Directory Search, KINGDOM ADVISORS (Feb. 15, 2025), https://www.faithfi.com/find [https://perma.cc/UQX9-KPYC] (choose „investing‰; then choose „IÊm looking for Faith-Based Investing options‰; then type in the desired address, city, or zip code; then choose „view professionals‰). This search function allows potential clients to find a Certified Kingdom Advisor at these larger companies. 100. About Us, BIBLICALLY RESPONSIBLE INVESTING INST., https://www .briinstitute.com/about.htm [https://perma.cc/JBB2-LQT4]. 101. Id. 102. Id. 103. Id.

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104. See, e.g., Helping Kingdom Organisations Be Faithful and Fruitful, KINGDOM IMPACT, https://www.kingdomimpact.co.uk [https://perma.cc/GK3Q -QBE2]. 105. See infra Part IV.A; see also Portfolio Advisory Bd., Celebrating 40 Years of Socially Responsible Investing, ADRIAN DOMINICAN SISTERS 2 (2015), https://www.adriandominicans.org/Portals/1/Pdf/peacejusticecare/PAB% 2040th%20Anniversary%20Commemorative%20Brochure%20lo%20res.pdf [https://perma.cc/AMT6-FTQL] („Forty years later, I continue to be amazed by the PABÊs ever-evolving response to community growth, social concerns, and environmental issues.‰). 106. Andrew Abela & Nicholas Schmitz, Proxy Advisers Get Religion, WALL ST. J.: OP. (Oct. 30, 2025), https://www.wsj.com/opinion/proxy-advisers-get -religion-a40c592e [https://perma.cc/8VGE-PM43]. 107. United States Catholic Faith-Based Proxy Voting Guidelines: 2024 Policy Recommendations, INST. SÊHOLDER SERVS. 8 (2024), https://www.iss governance.com/file/policy/2024/specialty/Catholic-US-Voting-Guidelines.pdf [https://perma.cc/3ZGC-HHUK]. 108. Id. 109. Id. at 14.

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110. Id. at 16, 73. 111. Id. at 86. 112. Catholic Thematic Voting Policy Guidelines, GLASS LEWIS 6 (2025), https://grow.glasslewis.com/policy-guidelines-2025-catholic [https://perma .cc/R744-R2BT]. 113. Our Origin Story, INTERFAITH CTR. ON CORP. RESP., https://www.iccr .org/mission-history [https://perma.cc/4KF6-GXUF]. 114. See infra Part IV.A (discussing the ICCR); Catalyzing Corporate Change, INTERFAITH CTR. ON CORP. RESP, https://www.iccr.org [https://perma.cc/4B76-EJ96]. 115. See Church Proxy Resolutions, INTERFAITH CTR. ON CORP. RESP. (1983), https://projects.kora.matrix.msu.edu/files/210-808-6423/proxy83opt.pdf [https://perma.cc/U76L-HLL6] (providing examples of corporate proxy resolutions opposing apartheid and pushing to adopt anti-apartheid policies); Member Directory, INTERFAITH CTR. ON CORP. RESP., https://www.iccr.org/member -directory [https://perma.cc/5PBQ-D7J8] („Our membership comprises faith communities, asset management companies, labor unions, pension funds, foundations and other institutional investors engaging in sustainable investing strategies.‰). 116. See Our Mission, THANK GOD FOR BITCOIN, https://tgfb.com [https://perma.cc/3EEZ-WDUS] („TGFB exists to educate and equip Christians to use Bitcoin for the glory of God and the good of people everywhere . . . .‰).

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B. GROWTH IN FAITH-BASED INVESTING PRODUCTS AND

SERVICES

https://www.faithdrivenentrepreneur.org

117. Every Investment Makes an Impact, FAITH DRIVEN INV., https://www.faithdriveninvestor.org [https://perma.cc/8UZG-6XYX] („We exist for one reason: to equip, connect, and inspire investors to align their capital with their calling.‰); We Serve Entrepreneurs in 4 Ways, FAITH DRIVEN ENTREPRENEUR, [https://perma .cc/Q5FN-MXX2] („[FDEN] is a movement dedicated to gathering one million Christ-following entrepreneurs and equipping them, so they can fulfill their call to create and transform the world around them.‰). 118. Faith Driven Entrepreneur and Faith Driven Investor are educational websites hosted by Faith Driven Movements (501(c)(6 and FDM Foundation (501(c)(3 nonprofit corporations. See sources cited supra note 117. 119. See sources cited supra note 117. 120. Why Faith Driven Investors Exist, FAITH DRIVEN INV., https://www .faithdriveninvestor.org/mission-and-vision [https://perma.cc/C7K2-AGNB]. 121. New Guide ÂA Practical RoadmapÊ to Help Faith Invest In Line with Values, FAITHINVEST (Oct. 7, 2025), https://www.faithinvest.org/post/our-newguide-provides-a-practical-road-map-to-help-faith-groups-invest-in-line-withtheir-values [https://perma.cc/Y63H-LBZZ]. 122. Cf. id. (mentioning increase in religious groups seeking to invest in line with their values). 123. See, e.g., Steven Doerr, Investing for Kingdom Impact, FAITH DRIVEN INV., https://www.faithdriveninvestor.org/blog/investing-for-kingdom-impact [https://perma.cc/F2H6-P5HV] (explaining faith-based impact investing and its modes); About SovereignÊs Capital, SOVEREIGNÊS CAP., https://sovereign

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scapital.com [https://perma.cc/PUF9-W5KY] (discussing the five market segments the organization invests in); Doug MacGray, Christian Private Equity: Investing Beyond Returns, STONECROP WEALTH ADVISORS (Jun. 23, 2025), https://www.stonecropadvisors.com/post/christian-private-equity-investing -beyond-returns-1 [https://perma.cc/AEA9-U46B] (discussing Christian private equity); Welcome to Faith Driven Venture Capital, FAITH DRIVEN VC, https://faithdriven.vc [https://perma.cc/G3E5-55CF] (discussing Christian venture capital); Lauren Goode, The Silicon Valley Christians Who Want to Build ÂHeaven on EarthÊ, WIRED (May 14, 2025), https://www.wired.com/story/ christians-silicon-valley-religion-venture-capital [https://perma.cc/9ZX3-9XD7] (same). 124. See Elias Bengtsson, A History of Scandinavian Socially Responsible Investing, 82 J. BUS. ETHICS 969, 973 (2008). 125. New Name, Same Philosophy: The Pax World Funds Are Now Impax Funds, IMPAX ASSET MGMT.: CONNECTION 1 (2023), https://impaxam.com/ assets/pdfs/connection/connection_winter2023.pdf [https://perma.cc/6YZN -RRMG]. 126. See, e.g., Catholic Responsible Investments Funds Prospectus, CHRISTIAN BROS. (2026), https://cbisonline.com/us/wp -content/uploads/sites/2/2022/06/Catholic-Responsible-Investments-Prospectus .pdf [https://perma.cc/GU5H-2L3P] (describing an investment strategy „designed specifically to help investors seek sound financial returns while remaining faithful to the teachings of the Roman Catholic Church‰); see also FAITH & FINANCE WITH ROB WEST: History of Faith-Based Investing with Jason Myhre at 1:22 (Spotify, June 28, 2021) („The first faith-based mutual fund began in the 1990s.‰). 127. Jilian Mincer, 403(b) Plans Being Revamped, FIN. ADVISOR (June 2, 2010), https://www.fa-mag.com/news/403b-plans-being-revamped-5511.html [https://perma.cc/CE3P-6M9P].

INV. SERVS. 4

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128. BRIGHTLIGHT, supra note 40, at 6. The performance of these funds is beyond the scope of this Article·existing studies are both scant and inconclusive. See, e.g., CIF Fund Performance Study 2020, FAITH DRIVEN INV., https://www.faithdriveninvestor.org/content-page/cif-fund-performance-study2020 [https://perma.cc/CR2X-R45H] (finding that faith-based investing produces favorable results comparable to traditional investing); Miles K. Davis et al., The Performance of Faith-Based Mutual Funds: A Matched-Pair Approach, 19 J. APPLIED BUS. ECON. 75, 75 (2017) (finding that „faith-based funds do not systematically underperform similar secular SRI or conventional funds‰). 129. Leslie P. Norton & Ruth Saldanha, A Matter of Faith, MORNINGSTAR (Dec. 6, 2023), https://www.morningstar.com/sustainable-investing/matterfaith [https://perma.cc/AZ8F-JN9G]. 130. BRIGHTLIGHT, supra note 40, at 8. 131. Id. at 3. 132. Id. at 8. 133. The new ETF offers a 0.09% expense ratio, the lowest price point for biblically screened companies. PTL: Inspire 500 ETF, INSPIRE, https://www .inspireetf.com/ptl [https://perma.cc/WD96-WUY8]; see infra Part V.A.3 (detailing InspireÊs screening methodology). 134. See Gard, supra note 41. 135. BRIGHTLIGHT, supra note 40, at 3. 136. Investment Company Fact Book, INV. CO. INST. 35 https://www.ici.org/system/files/2023-05/2023-factbook.pdf 5P5K-JGPR]. 137. See 2023 Annual Report, WESPATH https://www.wespath.org/assets/1/7/6034.pdf [https://perma.cc/46NT-ESW7].

(2023), [https://perma.cc/

(2023),

12–18,

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138. See id. at 9. For a discussion of Wespath, see infra Part II.B.1. 139. Cf. David Crary, Ideological Rifts Among U.S. Bishops Are in the Spotlight Ahead of Momentous Vatican Meeting, ASSOCIATED PRESS (last updated Sept. 24, 2023), https://apnews.com/article/catholic-us-bishops-lgbtq-womenpope-francis-81a602274dd604b7cc532425a289b00c [https://perma.cc/9FDK -TZKH] (describing ideological differences in the Catholic clergy). 140. See, e.g., GodÊs Word and Prayer as a Handbook for Investing, FAITH DRIVEN INV., https://faithdriveninvestor.org/gods-word-and-prayer-as-a-handbook-for-investing [https://perma.cc/J9Q8-4MZL] („We believe that God speaks to us through His word . . . . This includes our motive for investing well, the importance of saving, and how we might invest.‰). 141. See Talib Visram, Inside the Rise of Biblical Responsible Investing · Or the Christian Version of ESG, FAST CO. (July 20, 2023), https://www .fastcompany.com/90925253/inside-the-rise-of-biblical-responsible-investingor-the-christian-version-of-esg [https://perma.cc/D9AR-2LVH].

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A. FOUNDATIONAL PRINCIPLES FOR FAITH INVESTORS

142. This table broadly summarizes characteristics of faith investors and those engaging with investors, referred to in publications and semi-structured qualitative interviews.

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143. See Howard L. Dayton, Jr., 2350 Verses on Money and Possessions: A Resource for Your Financial Discipleship Journey, COMPASS FIN. MINISTRY (2022), https://compassfinancialministry.org/wp-content/uploads/2025/05/2350Verses-Catalog.pdf [https://perma.cc/4GFW-W36F]. 144. We Believe in the Power of Prayer, FAITH DRIVEN INV., https://www.faithdriveninvestor.org/pray-with-us [https://perma.cc/9HZB -52ZX]. 145. See, e.g., Lucian Bebchuk & Scott Hirst, Index Funds and the Future of Corporate Governance: Theory, Evidence, and Policy, 119 COLUM. L. REV. 2029, 2045–46 (2019) (describing stewardship as monitoring, voting, and engaging). 146. See Amelia Miazad, Investor Climate Alliances, 102 WASH. U. L. REV. 797, 805–07 (2025) (discussing the relationship between universal ownership and systemic risk). 147. See, e.g., id. at 797 (addressing how climate change requires collaboration among „diverse and transnational actors‰); Madison Condon, Externalities and the Common Owner, 95 WASH. U. L. REV. 1, 17–18 (2020). But see Roberto Tallarita, The Limits of Portfolio Primacy, 76 VAND. L. REV. 511, 525–29 (2023) (advocating for the „portfolio primacy theory‰). 148. Marks of a Faith Driven Investor, FAITH DRIVEN INV., https:// [https://perma faithdriveninvestor.org/marks-of-a-faith-driven-investor-page .cc/3QJ9-SSQM]. 149. Psalms 24:1 (New International Version) (emphasis added).

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150. See generally Comm. on Budget & Fin., supra note 23; Responsible and Ethical Investment Policy, CHURCH COMMÊRS FOR ENG. (2024), https://www .churchofengland.org/sites/default/files/2024-04/ccfe-responsible-and-ethicalinvestment-policy-2024-public-version-23apr2024.pdf [https://perma.cc/PTU3 -ZTDR]; Investment Exclusions, WESPATH BENEFITS & INVS., https://www .wespath.org/retirement-investments/investment-information/investment -philosophy/investment-exclusions [https://perma.cc/BZ96-NKVF] („Wespath studied the United Methodist Social Principles to understand the ChurchÊs positions regarding climate change and human rights.‰). 151. See BRETT JOHNSON, KINGDOM ECONOMICS 37–50 (2021) (providing definitions of terms used throughout the book). 152. See generally BILL WICHTERMAN, STEWARDS NOT OWNERS: THE JOY OF ALIGNING YOUR MONEY WITH YOUR FAITH (2025) (explaining that the concept of Christian financial stewardship begins with the premise that „all of our money belongs to the lord‰); CHURCH ON THE MOVE, Stewardship: Being Faithful with What God Has Given (YouTube Oct. 16, 2022), https://www.youtube .com/watch?v=SSGS02ISOXw. 153. See, e.g., MICHAEL B. DORFF, BECOMING A PUBLIC BENEFIT CORPORATION: EXPRESS YOUR VALUES, ENERGIZE STAKEHOLDERS, MAKE THE WORLD A BETTER PLACE (2024) (discussing public benefic corporations and how this type of organization can help leaders balance profits and mission); Deborah Burand & Anne Tucker, Legal Literature Review of Social Entrepreneurship and Impact Investing (2007-2017): Doing Good by Doing Business, 11 WM. & MARY BUS. L. REV. 1, 5 (2019) (discussing how the focus on „investing and organizing businesses to advance social and environmental objectives as well as financial returns reflects, at least in part, a demographic change taking place in the investor community‰); Innovative Finance: Channeling Private Capital https://www.rockefeller for Public Good, ROCKEFELLER

FOUND.,

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foundation.org/what-we-do/innovative-finance [https://perma.cc/Z5B9-7NY4] (discussing how the organization leverages impact investing to „shap[e] the next wave of financial solutions that deliver profitable investment models, alongside deep social impact‰); Dana Brakman Reiser, Theorizing Forms for Social Enterprise, 62 EMORY L.J. 681, 681 (2013) (defining social enterprise as „an organization formed to achieve social goals using business methods‰). 154. See, e.g., Bebchuk & Tallarita, supra note 61, at 98. 155. See, e.g., TONY EVANS, KINGDOM STEWARDSHIP: MANAGING ALL OF LIFE UNDER GODÊS RULE (2020); KINGDOM IMPACT, supra note 104. 156. „Double Materiality‰ is a concept that refers to accounting for financial materiality (a corporationÊs impact on value) and impact materiality (a corporationÊs impact on society). See, e.g., Carol A. Adams et al., The Double-Materiality Concept: Application and Issues, GLOB. REPORTING INITIATIVE 5 (2021), https://www.globalreporting.org/media/jrbntbyv/griwhitepaper-publications .pdf [https://perma.cc/3XD2-DUMW]. 157. FAITH DRIVEN INV.: Episode 075 – An Eternal Time Horizon with Brent Beshore at 18:41 (Podcast Republic, Aug. 2, 2021).

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B. CASE STUDIES

158. See Investment Criteria, PERMANENT EQUITY, https://www .permanentequity.com/investment-criteria [https://perma.cc/4JP8-S3FA]. 159. Id. 160. See, e.g., Faith-Based Investment Governance, FAITHINVEST (2024), https://1a956828-fe29-43d1-a8f0-31f34ea86a62.filesusr.com/ugd/391154_ 26a95018ecfe4a5fb6f30e459ed9c0c7.pdf [https://perma.cc/EDA6-36LJ]. 161. See, e.g., Responsible and Ethical Investment Policy, supra note 150; From Faith Values to Investment, FAITHINVEST 22, 29 (2024), https://1a956828fe29-43d1-a8f0-31f34ea86a62.filesusr.com/ugd/72b7c5_214b61cb297c486a956b b53dee2b6841.pdf [https://perma.cc/84FZ-LK4S] (discussing faith-aligned investment policy statements and providing case studies).

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162. About Wespath Institutional Investments, WESPATH, https://www .wespath.com/about-wespath-institutional-investments [https://perma.cc/M8P2 -9X4T]. 163. See Wesley, supra note 30. 164. Glossary: General Conference, UNITED METHODIST CHURCH, [https://perma https://www.umc.org/en/content/glossary-general-conference .cc/R5KN-GULL] (defining the UMCÊs General Conference and its structural importance); Who We Are, CHURCH, https://www.umc.org/en/who-we-are („The United Methodist Church is a worldwide connection of approximately 10 million members in Africa, Asia, Europe and the United States.‰). 165. See Sustainable Investing: Transforming Companies Through Environmental, Social and Governance Best Practices, GEN. BD. OF PENSION & HEALTH BENEFITS 6 [https:// perma.cc/8LN3-XDYV]. 166. Id. at 7. 167. Id. 168. Id.

(2014), https://www.wespath.org/assets/1/7/4631.pdf

[https://perma.cc/2YVR-K9E5]

UNITED METHODIST

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169. Id. at 8. 170. See id. at 1 (describing how the Social Principles serve as the foundation for the investing practices of the General Board). 171. Id. at 12. 172. Id. 173. See Gen. Bd. of Church & SocÊy, All Sections of the Revised Principles Officially Adopted, https://www.resourceumc.org/en/ RESOURCEUMC, content/all-sections-of-the-revised-social-principles-officially-adopted [https:// perma.cc/VXM9-ZVDN] („TodayÊs vote completes the historic adoption of the entire Revised Social Principles document after [twelve] years of development and engagement from thousands of United Methodists around the world.‰). 174. Id. 175. See Our Living World, Part 3: Water, UNITED METHODIST CHURCH, https://www.umc.org/en/content/ask-the-umc-our-living-world-part-3-water [https://perma.cc/T26M-CV6Z] (quoting the Social Principles). 176. See GEN. BD. OF PENSION & HEALTH BENEFITS, supra note 165, at 19– 20 (describing the General BoardÊs concentration on environmental advocacy). 177. See id. at 1 (highlighting Resolution 4071).

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(2015),

178. Resolution 4071 Amendment, GEN. BD. OF PENSION & HEALTH https://www.wespath.org/assets/1/7/Resolution-4071 BENEFITS -Amendment.pdf [https://perma.cc/3BMY-KUAG]. 179. GEN. BD. OF PENSION & HEALTH BENEFITS, supra note 165, at 2. 180. See, e.g., Blackrock ESG Integration Statement, BLACKROCK (2025), https://www.blackrock.com/corporate/literature/publication/blk-esg -investment-statement-web.pdf [https://perma.cc/2FDC-KXXF] (discussing how BlackRock assesses ESG risk while managing client portfolios). 181. See id. 182. See id. at 4 (describing how UMC has been involved in ESG integration). 183. See Wespath Investment Management: Using SASB for Manager Evaluation and Monitoring, SUSTAINABILITY ACCT. STANDARDS BD. 1, 4 (2016), https://sasb.ifrs.org/wp-content/uploads/2020/03/ESG-Integration-Insights-Q42016-WESPATH-021420.pdf [https://perma.cc/L9LK-W9KL]. 184. See KLAUS SCHATZ, PAPAL PRIMACY: FROM ITS ORIGINS TO THE PRESENT 10–12 (John Otto & Linda M. Maloney trans., 1996); see also Paul Misner, Papacy and Development: Newman and the Primacy of the Pope 32 (2022) (discussing papal primacy); M. Carmen Molina & Magui Pérez-Garrido, LAUDATO SIÊ and Its Influence on Sustainable Development Five Years Later: A First Look at the Academic Productivity Associated to this Encyclical, EnvÊt Dev., Sept. 2022, at 1 (discussing the Laudato SiÊ encyclical and describing encyclicals as „solemn letter[s] from the Catholic Church to the faithful on some matters of the Church‰).

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185. See Holy Father Francis, Encyclical Letter Laudato SiÊ on Care for Our Common Home, VATICAN PRESS (2015), https://www.vatican.va/content/ dam/francesco/pdf/encyclicals/documents/papa-francesco_20150524_enciclicalaudato-si_en.pdf [https://perma.cc/ZDR5-SGPY]. 186. See id.; Joseph Tulloch, Laudato SiÊ: Pope Francis on the Environment, VATICAN NEWS (April 21, 2025), https://www.vaticannews.va/en/pope/news/ 2025-04/laudato-si-pope-francis-death-environment-advocacy.html [https:// perma.cc/2L5C-6BGV]. 187. Holy Father Francis, supra note 185, ¶¶ 17, 23. 188. Id. ¶¶ 1–16. 189. See Carol Glatz, World Must Come Together to Fight Climate Change, Pope Leo Says, U.S. CONF. CATH. BISHOPS (Oct. 2, 2025) https://web .archive.org/web/20251114022221/https:/www.usccb.org/news/2025/worldmust-come-together-fight-climate-change-pope-leo-says [https://perma.cc/XEL2 -QWTN]. 190. See Holy Father Francis, supra note 185, ¶ 165. 191. Laurie Goodstein & Justin Gillis, On Planet in Distress, a Papal Call to Action, N.Y. TIMES (June 18, 2015), https://www.nytimes.com/interactive/ 2015/06/18/world/europe/encyclical-laudato-si.html [https://perma.cc/U4ZX -7FTR]. 192. See David Wallace-Wells, The PopeÊs Journey to Climate Outrage, N.Y. TIMES (Oct. 11, 2023), https://www.nytimes.com/2023/10/11/opinion/the-popesjourney-to-climate-outrage.html [https://perma.cc/DY9Q-FDBP].

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193. See id. (describing how the language used in Laudate Deum is radical). 194. Holy Father Francis, Apostolic Exhortation Laudate Deum to All People of Good Will on the Climate Crisis, HOLY SEE ¶ 55 (Oct. 4, 2023), https://www.vatican.va/content/francesco/en/apost_exhortations/documents/ 20231004-laudate-deum.html [https://perma.cc/PN3E-6J4Z]. 195. See Philip Pullella, Pope Backs Carbon Pricing to Stem Global Warming and Appeals to Deniers, REUTERS (June 14, 2019), https://www.reuters .com/article/us-oil-vatican-conference/carbon-pricing-essential-to-stem-globalwarming-pope-tells-energy-leaders-idUSKCN1TF1IE [https://perma.cc/6JRY -JLMB] (describing Pope FrancisÊs position that „carbon pricing is ÂessentialÊ to stem global warming‰). 196. See Brian Roewe, Pope Francis Launches Program to Put Laudato SiÊ into Action Throughout Church, EARTHBEAT (May 25, 2021), https://www .ncronline.org/earthbeat/justice/pope-francis-launches-program-put-laudato-siaction-throughout-church [https://perma.cc/648J-B3Y6]. 197. Richard Valdmanis, Insight: Defying PopeÊs Calls for Climate Action, US Catholic Bishops Cling to Fossil Fuels, REUTERS (Nov. 29, 2023), https://www.reuters.com/business/environment/defying-popes-calls-climate -action-us-catholic-bishops-cling-fossil-fuels-2023-11-29 AA4R-XTJE]. 198. See Comm. on Budget & Fin., supra note 23. 199. Id.

[https://perma.cc/

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200. Id. 201. Id. 202. See Christopher C. Lund, Second-Best Free Exercise, 91 FORDHAM L. REV. 843, 843 (2022) („The future of Free Exercise is up in the air.‰). 203. See Jesse H. Choper, The Free Exercise Clause: A Structural Overview and an Appraisal of Recent Developments, 27 WM. & MARY L. REV. 943, 944 (1986) („[T]he Constitution absolutely forbids the federal or state governments from regulating religious beliefs.‰); see also Lund, supra note 202, at 843; Ira C. Lupu & Robert W. Tuttle, The Remains of the Establishment Clause, 74 HASTINGS L.J. 1763, 1765 (2023). 204. Church of the Lukumi Babalu Aye v. Hialeah, 508 U.S. 520 passim (1993) (explaining that targeting goes beyond the text of the law and must

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assess how the law implicates religion in practice and need not involve any animus towards a religion). 205. See Frederick Mark Gedicks, The Normalized Free Exercise Clause: Three Abnormalities, 75 IND. L.J. 77, 80 n.9 (2000) (discussing articles that critique the Smith decision); Alan Brownstein, Protecting Religious Liberty: The False Messiahs of Free Speech Doctrine and Formal Neutrality, 18 J.L. & POL. 119, 121 (2002) („I think not only that Smith is wrong, but also that it is beyond redemption.‰). 206. See Emp. Div. v. Smith, 494 U.S. 872, 879 (1990). 207. See 42 U.S.C. § 2000bb(b)(2); see also Burwell v. Hobby Lobby Stores, Inc., , 694–95 (2014) (discussing RFRAÊs legislative history). 208. 42 U.S.C. § 2000bb-1(b)(2). 209. Id. § 2000bb-1(c). 210. See generally City of Boerne v. Flores, 521 U.S. 507 (1997) (holding that applying RFRA to state law is unconstitutional); Federal and State RFRA Map, BECKET, https://becketfund.org/research-central/rfra-info-central/map [https:// perma.cc/Z6FJ-DADF] (mapping state RFRAs). For a discussion of State RFRA legislation, see generally Christopher C. Lund, Religious Liberty After Gonzales: A Look at State RFRAs, 55 S.D. L. REV. 466 (2010). 211. As Justice Barrett has expressed, while, in practice, strict scrutiny in Free Exercise cases is „here to stay,‰ overruling Smith requires a workable replacement. ORDAIN & ESTABLISH: A Conversation with Justice Amy Coney Barrett at 25:23 (Apple Podcasts, Sept. 25, 2023); see Fulton v. City of Philadelphia, 141 S. Ct. 1868, 1882–83 (2021) (Barrett, J., concurring); see also Stephanie H. Barclay, Replacing Smith, 133 YALE L.J.F. 436, 436–37 (2023).

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212. See Douglas Laycock & Steven T. Collis, Generally Applicable Law and the Free Exercise of Religion, 95 NEB. L. REV. 1, 22–23 (2016). 213. See Thomas C. Berg & Alan Brownstein, Giving Our Better Angels a Chance: A Dialogue on Religious Liberty and Equality, 21 J. APP. PRAC. & PROCESS 325, 335–38 (2021) (explaining that a law fails the Smith test when it targets religion or devalues it compared to other activities); see also Nathan S. Chapman, The Case for the Current Free Exercise Regime, 108 IOWA L. REV. 2115, 2123–25 (2023). 214. Tandon v. Newsom 141 S. Ct. 1294, 1296 (2021) (per curiam) (emphasis omitted). 215. Id. 216. There are variations in the strict scrutiny standards articulated in state RFRA legislation. See, e.g., Marci A. Hamilton, The RFRA Gauntlet: The Indiana RFRA May Be Bad, but the Arkansas RFRA Is Even Worse, VERDICT (Apr. 1, 2015), https://verdict.justia.com/2015/04/01/the-rfra-gauntlet-the-indianarfra-may-be-bad-but-the-arkansas-rfra-is-even-worse [https://perma.cc/9Y2U -QQFA ] (comparing the state RFRA statutes in Indiana and Arkansas); Christopher C. Lund, RFRA, State RFRAs, and Religious Minorities, 53 SAN DIEGO L. REV. 163 (2016).

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217. See generally John C. Jeffries, Jr. & James E. Ryan, A Political History of the Establishment Clause, 100 MICH. L. REV. 279 (2001) (discussing the history of the Establishment Clause). 218. See Lupu & Tuttle, supra note 203, at 1766. 219. See id. 220. See generally Lemon v. Kurtzman, 403 U.S. 602 (1971) (providing the test formerly used in these cases). 221. See Kennedy v. Bremerton Sch. Dist., 142 S. Ct. 2407, 2414 (2022) (explaining how the Court overrules Lemon). 222. Id. at 2428. 223. See, e.g., Sherif Girgis, Living Traditionalism, 98 N.Y.U. L. REV. 1477 (2023) (explaining how judges may view and apply original meaning and historical practices differently); see also Lynch v. Donnelly, 465 U.S. 668, 686 (1984) (rejecting the Establishment Clause challenge because public Christmas displays had a 200-year history). 224. See generally Lupu & Tuttle, supra note 203. 225. Anti-entanglement concerns are also rooted in the Free Exercise Clause. 226. ERWIN CHEMERINSKY & HOWARD GILLMAN, THE RELIGION CLAUSES: THE CASE FOR SEPARATING CHURCH AND STATE 43–94 (2020) (discussing the history of the Establishment Clause).

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227. See Kennedy, 142 S. Ct. at 2420–21. 228. Our Lady of Guadalupe Sch. v. Morrissey-Berru, 140 S. Ct. 2049, 2052 (2020). 229. 565 U.S. 171, 181 (2012). Hosanna-Tabor was the first case to situate church autonomy in both the Establishment and Free Exercise Clauses. See id. („Both Religion Clauses bar the government from interfering with the decision of a religious group . . . .‰). 230. 140 S. Ct. at 2052. 231. Hosanna-Tabor, 565 U.S. at 178–79. 232. Id. at 196. See generally Douglas Laycock, Hosanna-Tabor and the Ministerial Exception, 35 HARV. J.L. & PUB. POLÊY 839 (2012). For a critical view of the expansive church autonomy doctrine, see Leslie C. Griffin, The Sins of Hosanna-Tabor, 88 IND. L.J. 981 (2013), and Ashutosh Bhagwat, Religious Associations: Hosanna-Tabor and the Instrumental Value of Religious Groups, 92 WASH. U. L. REV. 73, 105–07 (2014) (rejecting that Hosanna-Tabor arose out of the Religion Clauses and instead arguing that it is rooted in freedom of assembly). 233. 140 S. Ct. at 2041.

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234. See generally Cath. Charities Bureau, Inc. v. Wis. Lab. & Indus. Rev. CommÊn, 145 S. Ct. 1583 (2025). 235. See id. at 1587–89. 236. Id. at 1594–95. 237. Id. at 1595 (Thomas, J., concurring). 238. See Hosanna-Tabor Evangelical Lutheran Church & Sch. v. Equal Emp. Opportunity CommÊn, 565 U.S. 171, 188–89 (2012); Morrissey-Berru, 140 S. Ct. at 2060–61 (applying the church autonomy doctrine in the context of the ministerial exception). 239. See Cath. Charities Bureau, Inc., 145 S. Ct. at 1596–97; see also Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94, 116 (1952) (holding that churches have the „power to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine‰).

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240. See, e.g., Elizabeth Sepper, Zombie Religious Institutions, 112 NW. U. L. REV. 929, 931 (2018) („[A] number of legal scholars advocate granting nearabsolute immunity from governmental regulation to churches . . . .‰). 241. See Richard Schragger & Micah Schwartzman, Against Religious Institutionalism, 99 VA. L. REV. 917, 919 (2013) (critiquing „religious institutionalism‰ and arguing against a broad articulation of church sovereignty); see also Sepper, supra note 240. But see Richard W. Garnett, A Hands-Off Approach to Religious Doctrine: What Are We Talking About?, 84 NOTRE DAME L. REV. 837 (2009) (framing church autonomy as a broader constitutional freedom enjoyed by religious institutions, not merely individual clergy). 242. See generally Lael Weinberger, The Origins of Church Autonomy: Religious Liberty After Disestablishment, https:// papers.ssrn.com/sol3/papers.cfm?abstract_id=49 (forthcoming 2026) (exploring the origins of church autonomy and the Supreme CourtÊs endorsement of it). 243. See Paul Horwitz, Churches as First Amendment Institutions: Of Sovereignty and Spheres, 44 HARV. C.R.-C.L. L. REV. 79, 79, 83 (2009); Lael Weinberger, The Limits of Church Autonomy, 98 NOTRE DAME L. REV. 1253, 1257 (2023) („Courts have been struggling to find the limiting principle for church autonomy.‰). 244. See infra notes 364–67 and accompanying text.

L. REV.

VA.

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A. OVERVIEW OF FAITH-DRIVEN SHAREHOLDER ENGAGEMENT

245. See infra notes 348–50. 246. This Article acknowledges that there is a distinction between religious practice and religiously motivated secular activities. Yet, this is an area of considerable debate, and courts and scholars have not drawn bright line rules. See Ira C. Lupu, Hobby Lobby and the Dubious Enterprise of Religious Exemptions, 38 HARV. J.L. & GENDER 35, 72 (2015) („For fifty years, judges at all levels have looked for ways to avoid privileging religiously motivated behavior over its secular counterparts.‰). Therefore, while acknowledging the doctrinal complexity, the next Parts discuss faith investor practices without formally delineating if these practices constitute religious activity or religiously motivated activity. 247. For an overview of the shareholder proposal process, see Kobi Kastiel & Yaron Nili, The Giant Shadow of Corporate Gadflies, 94 S. CAL. L. REV. 569, 579–81 (2021).

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248. See Sarah C. Haan, Shareholder Proposal Settlements and the Private Ordering of Public Elections, 126 YALE L.J. 262, 265 (2016). 249. Id. at 280. 250. See, e.g., Matt DiGuiseppe, The DirectorÊs Guide to Shareholder Activism, HARV. L. SCH. F. ON CORP. GOVERNANCE (July 14, 2024), https://corpgov .law.harvard.edu/2024/07/14/the-directors-guide-to-shareholder-activism-3 [https://perma.cc/V25P-Q6CZ] (discussing different strategies that investors take regarding shareholder proposals). 251. See Haan, supra note 248, at 266. 252. See id. 253. See id. at 266, 310. 254. See generally Lisa M. Fairfax, From Apathy to Activism: The Emergence, Impact, and Future of Shareholder Activism as the New Corporate Governance Norm, 99 B.U. L. REV. 1301 (2019). 255. See Sarah C. Haan, Civil Rights and Shareholder Activism: SEC v. Medical Committee for Human Rights, 76 WASH. & LEE L. REV. 1167, 1214–15 (2019); see also 50 Years of Advocacy: Interactive Timeline, INTERFAITH CTR. ON CORP. RESP., https://www.iccr.org/50-years-of-advocacy-2 [https://perma.cc/ CLY6-RLBE]. 256. See Haan, supra note 255, at 1168, 1177. 257. See id. at 1218 („Medical Committee also had some religious institutional investors on its side . . . .‰); see also Jennifer Goodman et al., Social Shareholder Engagement: The Dynamics of Voice and Exit, 125 J. BUS. ETHICS 193, 197 (2014) („[Religious investors] are widely recognised as important and experienced actors in [Social Shareholder Engagement].‰).

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258. BEVIS LONGSTRETH & H. DAVID ROSENBLOOM, CORPORATE SOCIAL RESPONSIBILITY AND THE INSTITUTIONAL INVESTOR: A REPORT TO THE FORD FOUNDATION 43–48 (1973). 259. See VOGEL, supra note 31, at 1. It was, in part, prompted by civil rights activist James FormanÊs 1969 „Black Manifesto,‰ which demanded reparations from churches for their participation in segregation and slavery. See generally James Forman, Black Manifesto Delivered to the White Christian and the Jewish Synagogues in the United States of America and All Other Racist Institutions (Apr. 26, 1969), reprinted in BORIS I. BITTKER, THE CASE FOR BLACK REPARATIONS (1973). 260. LAUREN TALNER, THE ORIGINS OF SHAREHOLDER ACTIVISM 29 (1983). 261. Id. at 29–30. 262. Id. at 30. 263. See Omari Scott Simmons, Selective Patronage, 46 SEATTLE U. L. REV. 331, 350 (2023) (discussing Reverend Leon SullivanÊs impact on Campaign GM). 264. Id. at 350–51. 265. Id. 266. See TALNER, supra note 260, at 30–32.

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B. UNIQUE ATTRIBUTES OF FAITH INVESTORS

267. ANNE T. LAWRENCE & JAMES WEBER, BUSINESS AND SOCIETY: STAKEHOLDERS, ETHICS, PUBLIC POLICY 331 (13th ed. 2011). 268. ICCRÊs officers were originally shared with the Interchurch Center (ICC). See Chris Herlinger, ÂGod BoxÊ in New York More Diverse as It Turns 50, (Nov. 24, 2010), https://www.christiancentury.org/ CHRISTIAN CENTURY article/2010-11/god-box-new-york-more-diverse-it-turns-50 [https://perma.cc/ D66J-GPV7]. 269. Church Proxy Resolutions, supra note 115, at i. 270. About ICCR, supra note 14 (stating that the organizationÊs membership „comprises a broad range of organizations both religious and secular‰). 271. For a longitudinal study comparing ICCR membersÊ engagement with General Motors versus Ford, see Fabrizio Ferraro & Daniel Beunza, Creating Common Ground: A Communicative Action Model of Dialogue in Shareholder Engagement, 29 ORG. SCI. 1187, 1203–04 (2018) (describing ICCRÊs engagement with Ford as „a sequence of repeated encounters that make incremental progress possible‰). 272. This table broadly summarizes characteristics referenced by ICCRÊs faith and secular investors, as well as others in the faith-investors ecosystem who engage with faith investors. It relies on publications, ICCR archival materials, and a series of semi-structured interviews. This table reflects recurring themes and not systematic findings; it is intended to be illustrative as opposed to comprehensive.

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273. See Kastiel & Nili, supra note 247, 619–23. 274. John C. Coffee, Jr., Liquidity Versus Control: The Institutional Investor as Corporate Monitor, 91 COLUM. L. REV. 1277, 1283 (1991). 275. See W. Trexler Proffitt, Jr. & Andrew Spicer, Shaping the Shareholder Activism Agenda: Institutional Investors and Global Social Issues, 4 STRATEGIC ORG. 165, 166 (2006) (noting that religious investors were the first to file

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CORP.

RESP.,

https://www.iccr.org/about-shareex

resolutions on social issues and introduced these issues as part of the shareholder agenda). 276. The shareholder proposals discussed in this section are on file with the author and were obtained from a review of the ShareEx Database, a proprietary database maintained by ICCR. ICCRÊs Shareholder Exchange, INTERFAITH CTR. [https://perma ON .cc/3XB2-RKNY]; see also 50 Years of Advocacy: Interactive Timeline, supra note 255. This shareholder proposal, along with the following, were obtained through ICCRÊs proprietary database. 277. See Shareholder Proposal from Sisters of St. Joseph of Peace on Portrayal of Women in Advertising to Colgate-Palmolive Co. (1976) (on file with author). 278. See, e.g., Shareholder Proposal from United Christian Missionary Society on Women on the Board of Directors to Am. Fletcher Corp (1977) (on file with author) (requesting that the Board of Directors „take whatever steps as may be necessary and appropriate for the nomination of qualified women to the board of directors‰). Notably, 9.6% of shareholders voted in favor of this proposal. See Shareholder Proposal from United Methodist Church – National Division on Community Reinvestment/Redlining to First National Boston (1979) (on file with author). 279. See Shareholder Proposal from Episcopal Church Executive Council on Environmental Impact of Operations to American Metal Climax (AMAX) (1972) (on file with author). 280. See Shareholder Proposal from American Baptist Home Mission Society on Renewable Energy Policy to Houston Industries Incorporated Exxon (1974) (on file with author); see also Susana McDermott, 50 Years of Impact: ICCR Member Advocacy of the Environment, ICCR (April 16, 2025), https://my.visme.co/view/1jzyg9j3-iccr-environment-timeline-2025, [https:// perma.cc/GL32-X28F] (showing that ICCR members continued filing resolutions „calling for . . . renewable energy policies‰ in 1984). 281. See McDermott, supra note 279.

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282. Shareholder Proposal from Sisters of the Order of St. Dominic, Inc.] on Package Recycling/Plastic Reduction to Gen. Mills Inc. (1994) (on file with author). 283. Shareholder Proposal from Sisters of St. Dominic of Caldwell, N on GHG Emission Reduction to Ford Motor Co. (2008) (on file with author). 284. Shareholder Proposal from The Domestic and Foreign Missionary Society of the Protestant Episcopal Church on Political Contributions to 3M (1974) (on file with author). Remarkably, the resolution at 3M garnered ninety-seven percent support. See 50 Years of Advocacy: Interactive Timeline, supra note 255. 285. See, e.g., Shareholder Proposal from The Domestic and Foreign Missionary Society of the Protestant Episcopal Church to Prohibit Political Contributions to Phillips Petroleum Co. to Tenneco, Inc. (1979) (on file with author). 286. See Catalyzing Corporate Change 2024, INTERFAITH CTR. ON CORP. RESP. (Aug. 19, 2024), https://www.iccr.org/catalyzing-corporate-change-2024 [https://perma.cc/LT4S-ZQWP]. 287. See ICCRÊs Shareholder Exchange, supra note 276.

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02_MIN_110_5_text.indd 2301 02_MIN_110_5_text.indd 2301

288. Carroll and Buchholtz continue to credit religious groups as the major participants in social policy stockowner activities. ARCHIE B. CARROLL & ANN K. BUCHHOLTZ, BUSINESS & SOCIETY: ETHICS AND STAKEHOLDER MANAGEMENT 572 (4th ed. 2000) („Institutional investors (pension funds, church groups, foundations) now dominate the marketplace and thus wield considerable power because of their enormous stock holdings.‰). 289. ICCRÊs 2024 Proxy Resolutions & Voting Guide, INTERFAITH CTR. ON CORP. RESP. (2024), https://www.iccr.org/wp-content/uploads/2024/02/2024ICCR-Proxy-Resolutions-and-Voting-Guide02.26.24-MED.pdf [https://perma .cc/3ZTP-WVSQ]. These numbers were obtained from ShareEx, a proprietary database of shareholder proposals filed by ICCR members since 1974. See ICCRÊs Shareholder Exchange, supra 287 (explaining the ShareEx platform). Figures were also drawn from a proprietary database of shareholder proposals provided by Heidi Welsh, Executive Director of the Sustainable Investments Institute, [hereinafter Welsh, Sustainable Invs. Inst. Proprietary Database] and are on file with the author. 290. Welsh, Sustainable Invs. Inst. Proprietary Database, supra note 289. 291. Id.; see, e.g., Jennifer Goodman et al., supra note 257, at 197 („They . . . have been the most active shareholders in submitting social policy and human rights proposals.‰). 292. Shareholder Resolutions, https://www.iccr.org/shareholder-resolutions [https://perma.cc/7JF7-JHRL].

INTERFAITH CTR. ON CORP. RESP.,

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293. Shareholder Proposal from Project on Social Responsibility on Board Diversity to Ford Motor Company (1972); Shareholder Proposal from United Church Board for World Ministries on International Political Contributions Disclosure to Ford Motor Company (1976); Shareholder Proposal from Evangelical Lutheran Church on Operations in South Africa in America to Ford Motor Company (1981); Shareholder Proposal from Congregation of the Sisters of Charity of the Incarnate Word-Incarnate Charitable Trust on Human Rights in Maquiladora (1994); Shareholder Proposal from Congregation of the Sisters of Charity of the Incarnate Word on Executive Compensation, Houston to Ford Motor Company (1997); Shareholder Proposal from Sisters of St. Dominic of Caldwell, NJ on Global Warming to Ford Motor Company (2000); Shareholder Proposal on Lobbying Expenditures Disclosure – Climate Change from Unitarian Universalist Association to Ford Motor Company (2000). Note that many of these proposals were co-filed with other congregations and this Article references only the lead filer or first filer listed on the resolution. 294. The sub-attribute of persistence over time, which this Article characterizes as patience, has been correlated with successful ESG shareholder advocacy. See, e.g., Jean-Pascal Gond & Valeria Piani, Enabling Institutional InvestorsÊ Collective Action: The Role of the Principles for Responsible Investment Initiative, 52 BUS. & SOCÊY 64 (2013). 295. See Ferraro & Beunza, supra note 271, at 1203–04. 296. See Fabrizio Ferraro, Going Political? Towards Deliberative Corporate Governance, 23 J. MGMT. & GOVERNANCE 3, 14 (2018) („To understand why private dialogue works, we conducted a longitudinal comparative study of the engagement of ICCR with both Ford and General Motors (GM) on the issue of climate change.‰). 297. Catalyzing Corporate Change 2024, supra note 286. 298. See, e.g., Richard Sandomir, Sister Patricia Daly, 66, Dies; Took on Corporate Giants on Social Justice, N.Y. TIMES (Dec 23, 2022), https://www [https:// .nytimes.com/2022/12/23/business/sister-patricia-daly-dead.html

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perma.cc/7CUM-X9V3]; Kevin Roose, Nuns Who WonÊt Stop Nudging, N.Y. TIMES (Nov. 12, 2011), https://www.nytimes.com/2011/11/13/business/sisters-ofst-francis-the-quiet-shareholder-activists.html [https://perma.cc/X658-DV3N] (discussing the activism of Sister Nora Nash and the Sisters of St. Francis of Philadelphia). 299. Jill E. Fisch & Simone M. Sepe, Shareholder Collaboration, 98 TEX. L. REV. 863, 889 (2020) (discussing the value of collaborative initiatives and dialogue between shareholders and directors). 300. Ferraro & Beunza, supra note 271, at 1196. 301. See Annual Report 2024-2025, supra note 37, at 10 („An initiative of ICCR, the Investor Alliance is a collective action platform for responsible investment grounded in respect for peopleÊs fundamental human rights. With more than 240 investors based in 21 countries representing over $20T in assets, the Investor Alliance builds investorsÊ and companiesÊ capacity to meet their responsibilities under the UN Guiding Principles on Business and Human Rights, and embed respect for human rights into investment and business activities.‰). 302. See Miazad, supra note 146, at 820–23 (discussing how Investor Climate Alliances, such as Climate Action 100+, allow investors, including faith investors, to overcome capacity constraints by sharing information and resources); see also About ICCR, supra note 14 („Over the years ICCR has developed a growing network of NGOs and civil society groups which serves as an early warning system in identifying and understanding the impacts of corporate practices on the ground . . .‰). 303. See Church Proxy Resolutions, supra note 115, at i. 304. See, e.g., Gadinis & Havasy, supra note 61, at 1643 (discussing standardizationÊs impact on legitimacy of ESG efforts).

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305. Mark C. Suchman, Managing Legitimacy: Strategic and Institutional Approaches, 20 ACAD. MGMT. REV. 571, 574 (1995). 306. See Katinka C. van Cranenburgh et al., Religious Organisations as Investors: A Christian Perspective on Shareholder Engagement, 9 SOCÊY & BUS. REV. 195, 195 (2014) (identifying, within a sample of Christian organizations, three significant features that relate to their religious nature and affect their social shareholder belief system: „having a structured belief system, a grassroots network and a long-term perspective‰). 307. See Gordon L. Clark et al., Social and Environmental Shareholder Activism in the Public Spotlight: US Corporate Annual Meetings, Campaign Strategies, and Environmental Performance, 2001 – 04, 40 ENVÊT & PLAN. A: ECON. & SPACE 1370, 1376 (2008). 308. See, e.g., Goodman et al., supra note 257, at 203–04. 309. See id. at 197. 310. See About ICCR, supra note 14. 311. Interview with James McRitchie (May 2, 2024) (discussing the intricacies of the Disney CorporationÊs shareholder proposal). 312. See Katinka. C. van Cranenburgh et al., supra note 306, at 195–203 (detailing the various features that influence shareholder engagement and common practices); Corporate Dialogues, INTERFAITH CTR. ON CORP. RESP., https://www.iccr.org/corporate-dialogues [https://perma.cc/7NTF-AVVV] („Corporate dialogues are the primary tool and main vehicle ICCR members use to raise issues with corporate management.‰). 313. See, e.g., Where Is Your Treasure?, LAUDATO SIÊ MOVEMENT, https://laudatosimovement.org/divestment [https://perma.cc/NP78-C2J5] (highlighting how and why one should divest money from fossil fuels).

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314. See UNIF. PRUDENT INV. ACT 1 (UNIF. L. COMMÊN 1994); Jill Fisch & Jeff Schwartz, Corporate Democracy and the Intermediary Voting Dilemma, 102 TEX. L. REV. 1, 8 (2023) (arguing that „pension fund managers fail to live up to this duty by not ascertaining the interests of their beneficiaries on voting and engagement issues‰ and that pension funds are political actors that can divest for political reasons). 315. See Benjamin Braun, From Exit, Control, and Politics: Structural Power and Corporate Governance Under Asset Manager Capitalism, 4 POL. & SOCÊY 630, 635–37 (2022) (describing the „end of exit‰ for institutional investors); see also Anne M. Tucker, Locked in: The Competitive Disadvantage of Citizen Shareholders, 125 YALE L.J.F. 163, 164 (2015) („The Essay challenges the widely accepted view that exit is the best strategy for all mutual fund investors by showing that exit is not a viable option for CSHs and that the exit of other investors actually creates a competitive disadvantage for CSHs.‰). For citizen shareholders or 401K plans, see Senate Bill 252 (Gonzalez) – Divestment from Fossil Fuel Companies, CALPERS (Mar. 13, 2023), https://www [https://perma .calpers.ca.gov/documents/202303-full-item8c-00-a/download .cc/6GAH-X7F2], and Salar Ghahramani, Divestment Laws, Fiduciary Duty, and Pension Fund Management: An Empirical Examination, 56 INTÊL J.L. & MGMT. 29 (2014) (arguing that divestment mandates put pension trustees at odds with fiduciary responsibilities). 316. See Goodman et al., supra note 257, at 195 (discussing how divestment „may be used to relieve guilt and enhance feelings of purity and righteousness by not being involved in any companies which do not meet their strict social, environmental, or ethical criteria‰). 317. The Presbyterian Church deploys such a method. Its Mission Responsibility Through Investment (MRTI) has historically added companies to a „focused engagement‰ list·meaning they remain shareholders in certain energy companies to exert influence through engagement·while, at the same time, recommending divestment only for companies where engagement is judged as not promising. This account of strategic divestment is informed by conversations with multiple faith investors. 318. See Fisch & Schwartz, supra note 314, at 8; 50 Years of Impact, supra note 36.

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C. THE PRESENT MOMENT: SHAREHOLDER ENGAGEMENT SPANS

THE IDEOLOGICAL DIVIDE

319. See 50 Years of Impact, supra note 36. 320. For a discussion of EEO-1 reports, see Atinuke O. Adediran, Disclosing Corporate Diversity, 109 VA. L. REV. 307, 358–59 (2023); Mona Patni, Companies Disclosing Their EEO-1 Reports Saw Higher 2022 Returns, JUST CAP. (Mar. 16, 2023), https://justcapital.com/news/companies-disclosing-their-eeo-1reports-saw-higher-2022-returns [https://perma.cc/2TGT-WHQE]; Workplace Diversity and Financial Performance: An Analysis of Equal Employment Opportunity (EEO-1) Data, AS YOU SOW 4 (2022), https://www.asyousow .org/s/AsYouSow2022_DiversityPerformance_v9_FIN_20221201.pdf [https:// perma.cc/A456-5F5Q] („From August 2020 to October 2022, the number of S&P 100 companies releasing Equal Employment Opportunity Component 1 data (EEO-1) forms publicly more than quadrupled.‰). 321. These numbers were obtained from ShareEx, a proprietary database of shareholder proposals filed by ICCR members since 1974. See ICCRÊs Shareholder Exchange, supra note 287. 322. The exception to this is abortion, but, until recently, faith investors had not used shareholder engagement (as opposed to negative screening) to address abortion. See, e.g., Tim Schwarzenberger, Our Biggest Year is Yet to Come! Speaking Biblical Truth to Corporate Power in 2026, INSPIRE INVESTING (Feb. 2026), https://www.inspireinvesting.com/post/our-biggest-year-is-yet-to2, [https://perma.cc/ come-speaking-biblical-truth-to-corporate-power-in-2026 SQV6-238R] (noting how Inspire filed four shareholder proposals in 2022–23 and thirty-eight in 2025–26). 323. Netzley, supra note 57. 324. Heidi Welsh, Anti-ESG Shareholder Proposals in 2023, HARV. L. SCH. F. ON CORP. GOVERNANCE (June 1, 2023), https://corpgov.law.harvard.edu/2023/ 06/01/anti-esg-shareholder-proposals-in-2023 [https://perma.cc/PB92-TM68] (describing Inspire Investing as a „new entrant‰).

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INSPIRE

INVESTING

325. Luke 12:48. 326. Tim Schwarzenberger, 2022/2023 Inspire Corporate Engagement Report, INSPIRE INVESTING (Nov. 6, 2023), https://www.inspireinvesting .com/post/2022-2023-inspire-corporate-engagement-report [https://perma.cc/ HPK8-5TAB]. 327. Id. 328. See, e.g., Eric Smyth, Inspire Investing Removes ESG from All Fund Names, (Aug. 19, 2022), https://www.inspireetf .com/news/inspire-investing-removes-esg-from-all-fund-names [https://perma .cc/YJ3A-P9LC]; Robert Netzly, Faith-Based Investors Celebrate WalmartÊs Advance into Post-DEI World, INSPIRE INVESTING (Dec. 4, 2024), https://www .inspireinvesting.com/post/faith-based-investors-celebrate-walmarts-advanceinto-post-dei-world [https://perma.cc/RDF3-P5EP]; Schwarzenberger, supra note 322. 329. Schwarzenberger, supra note 326. 330. Id. 331. Id. 332. See Inspire Investing Receives Perfect Score for Proxy Voting Behavior, INSPIRE ADVISORS (Jun. 12, 2023), https://www.inspireadvisors.com/post/ inspire-investing-receives-perfect-score-for-proxy-voting-behavior [https:// perma.cc/R2TH-UEUW]; see also Our Mission, UNLEASH PROSPERITY, https://committeetounleashprosperity.com/our-mission [https://perma.cc/PP76 -6M8F].

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333. See, e.g., FAITH DRIVEN INV.: Episode 170 – A Catholic Perspective on Faith Driven Investing with Tony Minopoli and Andrew Abela at 9:44 (Podcast Republic, Apr. 22, 2024). 334. Id.

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D. RECENT SEC RULEMAKING AND LEGISLATION THREATEN

SHAREHOLDER PROPOSALS

335. See 17 C.F.R. § 240.14a-8 (2026). 336. See Christopher A. Iacovella, SEC Must Stop Political Operatives Who Hijack Shareholder Process, HILL (Nov. 12, 2018), https://thehill.com/opinion/ finance/416234-sec-must-stop-political-operatives-who-hijack-shareholder -process [https://perma.cc/VG2W-9V76]; Paul Kiernan, SEC Seeks to Curb Shareholder Resolutions, WALL ST. J. (Feb. 9, 2020), https://www.wsj.com/ articles/sec-seeks-to-curb-shareholder-resolutions-11581264001 [https://perma .cc/TA58-PUYH] (noting how the shareholder proposal process has „devolved into a free-for-all that a small minority of interests use to advance idiosyncratic agendas at the expense of Main Street investors‰). 337. Michael R. Littenberg et al., Unpacking a Busy Last Week for US ESG Disclosure and Compliance, ROPES & GRAY LLP (Sept. 16, 2025), https://www .ropesgray.com/en/insights/viewpoints/102l587/unpacking-a-busy-last-weekfor-us-esg-disclosure-and-compliance [https://perma.cc/5QNE-TWFC]. 338. See Randi Lesnick et al., Texas Enacts New Law to Regulate Proxy Advisory Firms, HARV. L. SCH. F. ON CORP. GOVERNANCE (July 13, 2025), https://corpgov.law.harvard.edu/2025/07/13/texas-enacts-new-law-to-regulateproxy-advisory-firms [https://perma.cc/KT8H-93HY]. 339. 17 C.F.R. § 240.14a-8 (2026). 340. Id.

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341. Id. 342. See Shareholder Proposals: Staff Legal Bulletin No. 14L (CF), U.S. SEC. & EXCH. COMMÊN (Nov. 3, 2021) [hereinafter SLB 14L], https://www.sec .gov/rules-regulations/staff-guidance/staff-legal-bulletins/shareholder -proposals-staff-legal-bulletin-no-14l-cf [https://perma.cc/B7YG-N8H4]; see also Lovenheim v. Iroquois Brands, Ltd., 618 F. Supp. 554 (D.D.C. 1985). 343. See SLB 14L, supra note 342; see also Trinity Wall St. v. Wal-Mart Stores, Inc., 792 F.3d 323, 354–55 (3d Cir. 2015). 344. See Lovenheim, 618 F. Supp. at 561; Trinity Wall St., 792 F.3d at 351. 345. See SLB 14L, supra note 342. 346. See SEC Staff Legal Bulletin Makes Exclusion of Certain Shareholder Proposals More Challenging, COOLEY LLP (Nov. 17, 2021), https://www .cooley.com/news/insight/2021/2021-11-17-sec-staff-legal-bulletin [https:// perma.cc/RAL3-2MBP]. 347. See id. 348. See Bahn et al., supra note 50. 349. See, e.g., Paul S. Atkins, CommÊr, U.S. Sec. & Exch. CommÊn, Speech on Shareholder Rights, the 2008 Proxy Season, and the Impact of Shareholder

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Activism (July 22, 2008), https://www.sec.gov/news/speech/2008/spch072208 psa.htm [https://perma.cc/R588-DB66]. 350. See Paul S. Atkins, CommÊr, U.S. Sec. & Exch. CommÊn, Keynote Address at the John L. Weinberg Center for Corporate GovernanceÊs 25th Anniversary Gala (Oct. 9, 2025), https://www.sec.gov/newsroom/speeches -statements/atkins-10092025-keynote-address-john-l-weinberg-center -corporate-governances-25th-anniversary-gala [https://perma.cc/3UEG-PRGD]. 351. See id. 352. See id. (speculating that the SEC would side with a company arguing the position that „a precatory shareholder proposal submitted to a Delaware company is excludable‰). 353. See Jill Fisch et al., supra note 50. 354. Id. 355. See Complaint ¶ 8, Interfaith Ctr. on Corp. Resp. & As You Sow v. Sec. Exch. CommÊn, No. 26-cv-00957 (D.D.C. Mar. 16, 2026) („ICCRÊs faith-based members . . . also have investment policies based on the faith, values, and principles of their religious institutions, which undergird their fiduciary obligations.‰). 356. See Griffith, supra note 64, at 877 (explaining that sixty-five percent of all proposals in 2023 were social policy proposals).

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357. No. 23-60230, 2025 WL 139160 (5th Cir. May 14, 2025). 358. See Petition for Review, NatÊl Ctr. for Pub. PolÊy Rsch. v. Sec. & Exch. CommÊn, No. 23-60230 (5th Cir. May 14, 2025). 359. See Press Release, NatÊl Ctr. for Pub. PolÊy Rsch., National Association of Manufacturers Joins National Center for Public Policy Research to Challenge Securities and Exchange Commission on First Amendment Violations (May 25, 2023), https://nationalcenter.org/ncppr/2023/05/25/national-association-ofmanufacturers-joins-national-center-for-public-policy-research-to-challenge -securities-and-exchange-commission-on-first-amendment-violations perma.cc/6NPS-292G]. 360. See Motion for Leave to Intervene by the National Association of Manufacturers at 1, NatÊl Ctr. for Pub. PolÊy Rsch., No. 23-60320. 361. Compare Brief of First Amendment and Securities Law Scholars as Amici Curiae in Support of Respondent, NatÊl Ctr. for Pub. PolÊy Rsch., No. 2360230, with Brief of Amicus Curiae Professor Sean J. Griffith in Support of Intervenor, NatÊl Ctr. for Pub. PolÊy Rsch., No. 23-60230. 362. See Jon Solorzano et al., ESG in 2025: What to Expect in Trump 2.0, VINSON & ELKINS LLP (Jan. 22, 2025), https://www.velaw.com/insights/esg-in2025-what-to-expect-in-trump-2-0 [https://perma.cc/Q3HZ-TLAY] („We anticipate that SLB 14L will be formally amended to make it clear that issues of social importance may be excluded by companies, consistent with historical norms.‰). 363. Complaint ¶ 59, Interfaith Ctr. on Corp. Resp. v. Paxton, No. 25-CV01803 (W.D. Tex. Nov. 10, 2025).

[https://

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E. SHAREHOLDER PROPOSALS AND RELIGIOUS LIBERTY

364. See, e.g., Press Release, Ralph Norman, Congressman, Rep. Ralph Norman Introduces the Business Over Activists Act (July 25, 2023), https:// norman.house.gov/news/documentsingle.aspx?DocumentID=1683 [https:// perma.cc/Q8ZN-HGGX]. 365. H.R. 4655, 118th Cong. (1st Sess. 2023). 366. Id. at 2 („The federal government cannot force companies into discussions regarding politically motivated proposals and mandate their subsidization of activist speech by publishing these proposals in their proxy materials.‰). 367. See H.R. 4767, 118th Cong. (1st Sess. 2023). 368. While outside the scope of this Article, limitations on social policy proposals also raise unexplored First Amendment issues for secular investors.

02_MIN_110_5_text.indd 2314 02_MIN_110_5_text.indd 2314

369. See generally Shareholder Proposals: An Essential Investor Right, INTERFAITH CTR. ON CORP. RESP., https://www.iccr.org/reports/shareholder -proposals-an-essential-investor-right [https://perma.cc/7PYZ-7AUD]. 370. Rob Fohr, Opinion: SEC Rule Change Would Muzzle the Religious Liberty of Faith-Based Investors, COURIER J. (Feb. 3, 2020), https://www.courier -journal.com/story/opinion/2020/02/03/sec-rule-change-muzzles-religious -liberty-faith-based-investors/4623009002 [https://perma.cc/EA5K-5YVX]. 371. Ferguson, supra note 21. 372. Elaine McArdle, UUA Pushes Back on Congressional Critique of Climate 100+ and ÂWokeÊ Investing, UU WORLD (Sept. 26, 2024), https://www.uuworld.org/articles/uua-common-endowment-fund-congress

02_MIN_110_5_text.indd 2315 02_MIN_110_5_text.indd 2315

-climate-action-100-unitarian-universalism [https://perma.cc/WSB3-BQVS] (stressing that the endowment fundÊs participation in Climate Action 100+ is an example of „longstanding religious activity‰). 373. S.B. 2337, 89th Leg., Reg. Sess. (Tex. 2025) (amending TEX. BUS. ORGS. CODE ANN. §§ 6A.001–.202 (West 2025 . 374. See Josh Zinner & Timothy Smith, Complaint Challenging Texas Senate Bill 2337, HARV. L. SCH. F. ON CORP. GOVERNANCE (Nov. 13, 2025), https:// corpgov.law.harvard.edu/2025/11/13/complaint-challenging-texas-senate-bill2337 [https://perma.cc/6UHX-8DRX]. 375. See Letter from Adrienne K. Walker, Gen. Couns., Unitarian Universalist AssÊn, to Jim Jordan & Thomas Massie, Chairmen, Comm. on the Judiciary, House of Representatives (Aug. 15, 2024), https://web.archive.org/ web/20250317180112/https://uucef.org/files/2024/09/UUA-Response-to-July30_-2024-Letter-for-Information_-Climate-Action-1008.15.24.pdf [https:// perma.cc/2BC4-D38M] („For over seven decades, the UUA has centered valuebased investment as an expression of our religious liberties and shared values.‰). 376. See United States v. Ballard, 322 U.S. 78, 93 (1944) (discussing the sincerity standard). 377. Id. 378. United States v. Seeger, 380 U.S. 163, 186 (1965) (discussing conscientious objector doctrine and explaining that a protected action does not have to be based on established religious principles to be considered sincerely held; what matters is that the person genuinely believes in the practice or principle).

02_MIN_110_5_text.indd 2316 02_MIN_110_5_text.indd 2316

379. See Holy Father Francis, supra note 185, ¶ 67 (stating that, while Christians have at times „incorrectly interpreted the Scriptures,‰ the Church must now „forcefully reject the notion‰ that dominion over the earth justifies „absolute domination over other creatures‰). 380. Divesting from Fossil Fuels, LAUDATO SIÊ MOVEMENT, https://web .archive.org/web/20250523091036/https://www.laudatosi.org/action/take -action/divestment [https://perma.cc/85FX-KBFV]. 381. See 42 U.S.C. § 2000bb-1(a).

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382. See id. § 2000bb(a)(3) („[G]overnments should not substantially burden religious exercise without compelling justification . . . .‰); see also id. § 2000bb1(b) (enumerating an exemption, which allows the government to substantially burden oneÊs exercise of religion). 383. (2014); see Amicus Curiae Brief of Corporate and Criminal Law Professors in Support of Petitioners at 2–3, Hobby Lobby, (Nos. 13-354 & 13-356). 384. Hobby Lobby, 573 U.S. at 688–91. 385. See, e.g., Elizabeth Pollman, The Supreme Court and the Pro-Business Paradox, 135 HARV. L. REV. 220, 220 (2021) („At times, the Court has ignored or dismissed as irrelevant the corporate identity of a rights claimant or litigant, or it has simply acted pragmatically, such as to discard an Âold and exploded doctrineÊ that no longer fit societal realities regarding corporate liability.‰ (footnote omitted ; see also Amicus Curiae Brief of Corporate and Criminal Law Professors in Support of Petitioners, supra note 383, at 7–8. 386. See supra Part I. 387. Meese & Oman, supra note 6, at 277.

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388. Id. at 279. 389. See Justin McLellan, Pope Prays for Conversion of Those Resisting Climate Action at New Mass, U.S. CONF. OF CATH. BISHOPS (July 9, 2025), https://www.usccb.org/news/2025/pope-prays-conversion-those-resisting -climate-action-new-mass [https://perma.cc/NUU8-TEQ2]. 390. See supra Part IV.

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391. Walt Disney Co., SEC No-Action Letter, 2023 WL 9119046 (Feb. 1, 2024). 392. About Robert Netzly, CEO, INSPIRE ADVISORS, https://www.inspire advisors.com/author/robert-netzly [https://perma.cc/Z6G8-S5WG]. 393. TEX. CIV. PRAC. & REM. CODE ANN. §§ 110.001–.012 (West 2025). 394. S.B. 2337, 89th Leg., Reg. Sess. (Tex. 2025) (amending TEX. BUS. ORGS. CODE ANN. §§ 6A.001–.202 (West 2025 .

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395. See Federal and State RFRA Map, supra note 210. 396. See Emp. Div. v. Smith, 494 U.S. 872, 879 (1990).

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A. ETHICAL SCREENING

397. See Brightlight Research, BRIGHTLIGHT https://www.brightlight impact.us/brightlight-research [https://perma.cc/XSQ3-RVNE] (providing various reports that highlight screening for prohibited products, such as alcohol and tobacco). 398. See Our Funds, NEW COVENANT FUNDS (last updated Feb. 28, 2026), https://www.newcovenantfunds.com/funds [https://perma.cc/H4GD-CP2F] (providing information sheets for New Covenant FundsÊ growth and balanced income funds); Rick Jones & Randy Hobson, Sadness, Anger, Frustration, PRESBYTERIAN CHURCH USA (June 24, 2022), https://www.pcusa.org/ news/2022/6/24/sadness-anger-frustration [https://perma.cc/9284-HWU5] (expressing dissatisfaction with the overturning of Roe v. Wade and its negative impact); Yonat Shimron, This Presbyterian Minister Wants Churches to Talk More About Abortion, WASH. POST (July 14, 2023), https://www .washingtonpost.com/religion/2023/07/14/this-presbyterian-minister-wantschurches-talk-more-about-abortion (quoting Reverend Rebecca Todd Peters, a Presbyterian minister, „Â[a]bortion is a moral good. Abortion is an act of love. Abortion is an act of grace,Ê and finally: ÂAbortion is a blessingʉ). 399. See Core Characteristics of Impact Investing, GLOB. IMPACT INVESTING NETWORK [https:// perma.cc/5TLD-MM5M] (defining impact investing as „[i]nvestments made with the intention to generate positive, measurable social and environmental impact alongside a financial return‰ and also noting that the amount of capital for impact investing has increased dramatically in the past ten years, with the current impact investing market estimated to be $1.571 trillion USD); What

2019), https://thegiin.org/characteristics

[https://perma.cc/3BG3-9DPV]

(Apr.

3,

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You Need to Know About Impact Investing, GLOB. IMPACT INVESTING NETWORK (Jan. 24, 2025), https://thegiin.org/impact-investing/need-to-know [https:// perma.cc/P7CY-QSTD]; Millennial Investors Drive Growth in Impact Investing; 61% Participate, See as Key Way to Create Change, FID. CHARITABLE (Apr. 20, https://www.fidelitycharitable.org/about-us/news/millennial-investors2022) drive-growth-in-impact-investing.html [https://perma.cc/6Y8X-XW5B]. 400. See Socially Responsible Investing, CHURCH PENSION GRP., https:// www.cpg.org/global/about-us/investment-profile/responsible-investing/positiveimpact-investing [https://perma.cc/39SH-XJES]. 401. See Positive Social Purpose (PSP) Lending Program, WESPATH INST. INV., https://www.wespath.com/sustainable-investment/psp [https://perma.cc/ WZR2-TNPB]; see also Catholic Impact Investing Pledge, https://www.catholic impact.org/catholic-impact-investing-pledge [https://perma.cc/JL5M-D4A6] (providing examples of pledge signatories and their investing initiatives, including improving health and well-being in communities). 402. See Robert Wright, Religious Investors Put Their Faith in Impact Funds, FIN. TIMES (Feb. 19, 2023), https://www.ft.com/content/185816de-a8194224-8932-6244484946b4 [https://perma.cc/RV83-E8FL]. 403. Pursuing Faith-Based Impact Investing: Insights on Financial Performance, GLOB. IMPACT INVESTING NETWORK, https://s3.amazonaws.com/giinweb-assets/giin/assets/publication/research/pursuing-faith-based-investing-insights-on-financial-performance-finalwebfile.pdf -PVXU]. 404. See Engaging Faith-Based Investors in Impact Investing, GLOB. (2020), https://s3.amazonaws.com/giin-web IMPACT INVESTING NETWORK -assets/giin/assets/publication/research/engaging-faith-based-investors-in -impact-investing-final.pdf [https://perma.cc/N93Z-QTY3].

[https://perma.cc/KAZ3

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405. See Marketplace, FAITH DRIVEN INV., https://www.faithdriven investor.org/marketplace [https://perma.cc/39QT-5NCE]. 406. See id.; see also Why Faith Driven Investors Exist, supra note 120 („[W]e adhere to the Lausanne Covenant, which serves as a rallying cry for us to work together to make Jesus Christ known throughout the world.‰). 407. See The Lausanne Covenant, LAUSANNE MOVEMENT, https:// lausanne.org/statement/lausanne-covenant [https://perma.cc/5DBS-EWJL]. 408. Andrew Firman, The Growing Impact Space, FAITH DRIVEN INV., https://www.faithdriveninvestor.org/blog/the-growing-impact-space [https:// perma.cc/Q2L8-R8EW] (explaining that faith as evangelism requires „adding a ÂKingdomÊ element to the traditional [ESG] factors that the world uses to define impact‰). 409. See CATH: Fact Sheet, GLOB. X (last updated Feb. 28, 2026), https:// assets.globalxetfs.com/funds/documents/cath/Fact-Sheet_CATH.pdf [https:// perma.cc/9XMJ-8STK]. 410. See id. A similar Catholic ETF, CEFA, includes large cap companies outside of the United States and, more recently, the S&P 500 Catholic Focused 100 Index. See S&P 500 Catholic Values Focused 100 Index, S&P GLOB., https://www.spglobal.com/spdji/en/indices/sustainability/sp-500-catholic -values-focused-100-index/#overview [https://perma.cc/2FMH-7G6K]. 411. See FAITH DRIVEN INV., supra note 333, at 17:50 (interviewing Tony Minopoli, President and Chief Investment Officer of the Knights of Columbus Asset Advisors). 412. See id. at 16:39 (interviewing Tony Minopoli, President and Chief Investment Officer of the Knights of Columbus Asset Advisors).

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413. Id. at 3:45. 414. See CATH: Fact Sheet, supra note 409. This includes large companies, like Johnson & Johnson, UnitedHealth Group, Inc., and Pfizer, Inc. 415. S&P Catholic Values Indices Methodology, S&P DOW JONES INDICES 5 (2024), https://www.spglobal.com/spdji/en/documents/methodologies/ methodology-sp-catholic-values-indices.pdf [https://perma.cc/XN6C-UUHX]. 416. See, e.g., Vanguard 500 Index Fund Admiral Shares (VFIAX), Vanguard (Apr. 10, 2026) https://investor.vanguard.com/investment-products/ mutual-funds/profile/vfiax#portfolio-composition, [https://perma.cc/8FWN -LZKC] (showing holdings for Meta Platforms, Tesla, Apple, and Alphabet); Global X S&P 500 Catholic Values ETF (CATH), Glob. X ETFs (Apr. 10, 2026), https://www.globalxetfs.com/funds/cath [https://perma.cc/ZN4F-C67R] (showing top holdings overlapping with large-cap technology companies, such as Apple, Microsoft, and Alphabet). 417. See Our Timeline – Through the Years, TIMOTHY PLAN, https://timothyplan.com/about-us/our-timeline.php [https://perma.cc/GD2A-54J2]. 418. Id. 419. Id. 420. Our Filters, TIMOTHY PLAN, https://timothyplan.com/about-us/our -filters.php [https://perma.cc/K8MX-TZFE].

02_MIN_110_5_text.indd 2325 02_MIN_110_5_text.indd 2325

421. Know Your Investments, TIMOTHY PLAN (2024), https://timothyplan.com/download/literature/Flyer_Know-Your-Investments_(formerly-Hallof-Shame).pdf [https://perma.cc/QM34-YC83]. 422. Art Ally, Timothy PlanÊs Proactive Approach to Combat Human Trafficking, CHRISTIAN POST (July 16, 2023), https://www.christianpost .com/voices/timothy-plans-proactive-approach-to-combat-human-trafficking .html [https://perma.cc/CZ45-QYM6]. 423. Id. 424. Reed Albergotti, Apple Is Lobbying Against a Bill Aimed at Stopping Forced Labor in China, WASH. POST (Nov. 20, 2020), https://www .washingtonpost.com/technology/2020/11/20/apple-uighur [https://perma.cc/ U5C3-YZ5M]. The bill was passed into law in 2021. Uyghur Forced Labor Prevention Act, Pub. L. No. 117-78, 135 Stat. 1525 (2021). 425. See Available Screen Definitions, EVALUEATOR, https://www .christianinvestingtool.com/screens [https://perma.cc/94W6-LXSG]; Our Filter, supra note 420 („Through the filtering tools provided to us by eVALUEator, we are looking for companies that are actively involved in, profiting from, or financially supporting any one of our eight filters.‰). 426. Screening Tools, EVALUEATOR, https://evalueator.com/tools.php [https://perma.cc/8S6A-4GNF]. 427. Our Screens, EVALUEATOR, https://evalueator.com/screens.php [https://perma.cc/GR8Y-MVA6]. 428. Id. 429. See Screening Tools, supra note 426 (explaining that eVALUEator has been analyzing mutual fund holdings since 1995). 430. See Visram, supra note 141.

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INVESTING

431. Tim Schwarzenberger, Tractor Supply, LoweÊs Added to Inspire 500 ETF After LGBT Activism Policy Changes, INSPIRE INVESTING (Jan. 9, 2025), https://www.inspireetf.com/news/tractor-supply-lowes-added-to-inspire-500etf-after-lgbt-activism-policy-changes [https://perma.cc/E8W3-F6VA]. 432. See Visram, supra note 141. 433. Id. 434. Id. 435. Cf. Molly Blakeman, Inspire Launches 9 Basis Point Faith-Based ETF, INSPIRE (Mar. 26, 2024), https://www.inspireetf.com/news/ inspire-launches-9-basis-point-faith-based-etf [https://perma.cc/D9AQ-SP88]. 436. Id. 437. Discover Inspire ETFs, supra note 42 (listing faith-based ETFs with tickers). 438. Daniel Mastrolonardo, Inspire Investing Ranks #131 in the Financial Times „Fastest Growing Companies in the Americas 2022,‰ INSPIRE INVESTING (Apr. 26, 2022), https://www.inspireinvesting.com/post/inspire-investing-ranks131-in-the-financial-times-fastest-growing-companies-in-the-americas-2022 [https://perma.cc/3R4R-EHH2] (noting that, from 2017 to 2020, „Inspire posted a 577% absolute growth rate, an increase of 179% from the previous yearÊs ranking‰). 439. Blakeman, supra note 435.

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440. See Robert Netzly & Carter Fulcher, Inside the Inspire Impact Score: Calculation & Analysis of InspireÊs Approach to Biblically Responsible Investing, INSPIRE INVESTING 5 (2021), https://assets-global.website-files.com/ 5ed898c402c24b6d359e981a/63ed275f1c7a041076c90930_Inspire%20Impact% 20Scoring%20Methodology.pdf [https://perma.cc/BJH9-2LVH]. 441. Id. at 4. 442. Smyth, supra note 328. 443. Saijel Kishan, What Would Jesus Buy: Investor Charts Course for $2 (Sept. 21, 2022), https://www.bloomberg Billion Fund, BLOOMBERG .com/news/articles/2022-09-21/evangelical-investor-s-2-billion-fund-for-faithbased-stocks [https://perma.cc/8LUV-FBMP]. 444. See Norton & Saldanha, supra note 129. 445. Netzley & Fulcher, supra note 440, at 7. 446. See id. at 14–16. 447. See id. at 14 (listing the SASBÊs „materiality categories‰); Kishan, supra note 443 (showing CEO NetzlyÊs opposition to the ESG label).

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448. Netzley & Fulcher, supra note 440, at 14. 449. See id. at 19 (noting that stocks with positive Inspire Impact Scores generally provide better returns, compared to stocks with negative scores). 450. Pursuing Excellence in Faith Driven Investing Since 2012, SOVEREIGNÊS CAP., https://sovereignscapital.com [https://perma.cc/6K9NLSPK]. 451. Why SovereignÊs Capital Chose FINTRX, FINTRX (Apr. 14, 2026), [https:// https://www.fintrx.com/case-studies/sovereigns-capital-case-study perma.cc/CG68-RYHV]. The Flourish Fund invests in approximately 80–100 publicly traded U.S. companies. 452. In other words, it excludes corporations that profit from alcohol, tobacco, gambling, pornography, and abortion. See SovereignÊs Capital Flourish (Oct. 2025), https://www.scetfs Fund (SOVF), SOVEREIGNÊS CAP. 9 .com/sovf/overview-presentation [https://perma.cc/X75J-K86D]; Prospectus: SovereignÊs Capital Flourish Fund – (SOVF), SOVEREIGNÊS CAP. 2 (Nov. 28, 2025) [hereinafter SovereignÊs Capital Prospectus], https://www.scetfs .com/sovf/prospectus [https://perma.cc/9VMJ-3S7K]. 453. SovereignÊs Capital Prospectus, supra note 452, at 2. 454. SovereignÊs Capital Flourish Fund (SOVF), supra note 452. 455. See id.

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456. See generally Dan J. Slater et al., Do Christian CEOs Make a Difference? Empirical Evidence from the S&P 500, 25 J. BIBLICAL INTEGRATION BUS. 74 (2022) (finding that firms with Christian CEOs have higher returns). 457. SovereignÊs Capital Flourish Fund ETF (SOVF) Factsheet, SOVEREIGNÊS CAP. (Dec. 31, 2025) [hereinafter 2025 Flourish Fact Sheet], https://www.scetfs.com/sovf/factsheet [https://perma.cc/Q7VV-8KSV]. 458. Impact Report 2025, SOVEREIGNÊS CAP. (Apr. 14, 2026), https://www.scetfs.com/sovf/impactreport [https://perma.cc/E84V-H4P2] („Second, and perhaps most uniquely, we host exclusive public company CEO roundtables that serve as catalysts for transformation.‰). 459. See 2025 Flourish Fact Sheet, supra note 457. 460. SovereignÊs Capital Flourish Fund ETF (SOVF) Factsheet, SOVEREIGNÊS CAP. (2024), https://www.scetfs.com/uploads/fund/SOVF_Fact [https://perma.cc/M9DU-UU7T] sheet_1_Pager_WITH_IMPACT_093024.pdf (listing Coca-Cola Consolidated, Inc. (COKE) as a top ten holding in 2024). 461. See 2025 Flourish Fund Factsheet, supra note 457. 462. See J. Frank Harrison, CORP. CHAPLAINS OF AM., https:// chaplain.org/avodah-fellowship/harrison [https://perma.cc/V7RL-FM8D]; „They Drink Coke, but DonÊt Know Who Jesus Is.‰ The Christian Principles Behind Coca-Cola Consolidated, GODLY MONEY (May 23, 2025), https://godly money.com/stories/coca-cola-consolidated [https://perma.cc/3XNP-HMTM]; J. FRANK HARRISON III, THE TRANSFORMATION FACTOR: LEADING YOUR COMPANY FOR GOOD, FOR GOD, AND FOR GROWTH (2014). 463. Purpose, People, Portfolio: Annual Report 2023, COCA-COLA CONSOL. 2 (2023), https://investor.cokeconsolidated.com/static-files/198305e2-2559-4 acc-954c-4123760b0f61 [https://perma.cc/4R2S-KRX2].

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B. RELIGIOUS LIBERTY DOCTRINE PROTECTS ETHICAL

SCREENING BY CHURCH PENSION PLANS

464. See 2025 Flourish Fund Factsheet, supra note 457. 465. Id. 466. See Amicus Therapeutics, Annual Report (Form 10-K) 3 (2024), https://ir.amicusrx.com/static-files/8218ffb0-c24a-4e7d-855b-ad2294972fbb [https://perma.cc/4Q8H-8364]. 467. SovereignÊs Capital Prospectus, supra note 452, at 7 (explaining the risks involved with Faith-Driven Leadership Investing). 468. Id. 469. See George S. Georgiev, The Market-Essential Role of Corporate Climate Disclosure, 56 UC DAVIS L. REV. 2105, 2109–10 (2023) („[I]nvestor preferences are heterogeneous, dynamic, and difficult to aggregate.‰).

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470. See Fisch & Schwartz, supra note 55, at 4, 6 („That public pension funds are embedded in the political structure is a feature, not a bug.‰). 471. Id. at 6. 472. Id. 473. Id. at 33–34 (explaining that beneficiaries are „fixed rather than residual claimants‰ and receive payments set by state and local rules, rather than the success of the fund manager).

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474. See supra Part IV. 475. See Pollman, supra note 2, at 428 (explaining that some began to recognize that using ESG in investment analysis could lead to social benefits). 476. Id. at 426 (noting that investorsÊ and asset managersÊ key reason for considering ESG factors relates to the potential impact on „risk-adjusted returns‰); see Dorothy S. Lund & Elizabeth Pollman, Essay, The Corporate Governance Machine, 121 COLUM. L. REV. 2563, 2566 (2021) (explaining that many companies and investors pursue ESG goals today because it provides „sustainable long-term value or higher risk-adjusted returns for shareholders‰ rather than for moral or social benefit). 477. Bebchuk & Tallarita, supra note 61, at 101 n.17. 478. See generally GEORGE SERAFEIM, PURPOSE + PROFIT: HOW BUSINESS CAN LIFT UP THE WORLD (2022).

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479. See supra Part II.B. 480. See generally Basich v. Bd. of Pensions, 540 N.W.2d 82 (Minn. Ct. App. 1995). 481. Id. at 84. 482. Id. at 85. 483. See id. at 87 („If the civil courts were allowed to rescind pension plan contracts every time a group of dissenting participants disagreed . . . the ELCAÊs ability to express its faith through social and moral investment would be substantially compromised.‰). 484. Id. at 85–86. 485. Id. at 86. 486. Id. 487. Id.

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488. See id. at 85–86. 489. Id. at 87. 490. See 29 U.S.C. § 1003(b)(2) (exempting church plans from ERISAÊs requirements). 491. The definition of what constitutes a church plan has been continuously expanded and now includes plans administered by secular organizations, so long as it includes at least one member with a religious affiliation. See Robert B. Wynne & James P. McElligott Jr., Supreme Court: ERISA ÂChurch PlanÊ Exemption Applies to Religiously Affiliated Hospital Plans, MCGUIREWOODS (June https://www.mcguirewoods.com/client-resources/alerts/ 2017/6/supreme-court-erisa-church-plan-religiously-affiliated-hospital-plans [https://perma.cc/6VAA-AJXK]. ERISA defines a church plan in section 3(33) expansively: It includes plans established and maintained for its employees by a church, a convention, or an association of churches and includes organizations controlled by or associated with a church or group of churches. See 29 U.S.C. § 1002(33); see also id. § 1003(b) (providing that the statuteÊs provisions do not apply to church plans). 492. S. REP. NO. 93-383, at 81 (1973); see Rebecca Miller, GodÊs (Pension) Plan: ERISA Church Plan Litigation in the Aftermath of Advocate Health Care

2017),

8,

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Network v. Stapleton, A.B.A. (Jan. 11, 2021), https://www.americanbar .org/groups/labor_law/publications/ebc_news_archive/issue-winter-2021/godspension-plan [https://perma.cc/9MAF-B536] (summarizing potential motivations behind CongressÊs decision to include a church plan exemption in ERISA). 493. See Advoc. Health Care Network v. Stapleton, 137 S. Ct. 1652, 1663 (2017). The Supreme Court has not defined what it means to be „maintained by a church‰; lower courts apply various tests. See id. at 1654; see also, e.g., Medina v. Cath. Health Initiative, 877 F.3d 1213, 1222 (10th Cir. 2017) (asking whether the „plan is maintained by an organization whose principal purpose is administering or funding a retirement plan for entity employees‰); Anderson v. Unum Provident Corp., 369 F.3d 1257, 1265 (11th Cir. 2004) (identifying a list of factors that may show whether an employer has maintained a plan). 494. See generally Danny Miller & Eric Smith, Faith-Based Investing: Considerations for Church Plan Fiduciaries, CONNER & WINTERS LLP (2022), https://www.guidestone.org/-/media/Retirement/WhitePapers/294318_ERISAv-Church-Plan.pdf [https://perma.cc/HT4F-QRWK] (examining the fiduciary rules that apply to church plans that are exempt from ERISA); Dannae Delano, Fiduciary Responsibilities for Church Plans Part II, AM. SOCÊY OF PENSION PROS. & ACTUARIES (Nov. 2, 2017), https://www.asppa-net.org/news/2017/11/ fiduciary-responsibilities-church-plans--part-ii [https://perma.cc/H2XX-KTRL] (explaining that church plan fiduciaries should review various state laws that may apply to church plans that are exempt from ERISA). 495. Understanding a Plan FiduciaryÊs Duties, GUIDESTONE (Dec. 29, 2020), https://www.guidestone.org/Resources/Education/Articles/Retirement/Plan -Fiduciary [https://perma.cc/4VP5-SRCU]. 496. Bacon v. Bd. of Pensions of the Evangelical Lutheran Church in Am., No. A15-1999, 2016 WL 3961960, at *1, *7 (Minn. Ct. App. July 25, 2016) (reasoning that a court should not intervene in issues that would „excessively entangle Minnesota courts with religion and, therefore, violate the Establishment Clause‰). 497. See, e.g., Gaddy v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints, 665 F. Supp. 3d 1263, 1263 (D. Utah 2023) (declining to adjudicate fraud claims by LDS members); Aldersgate United Methodist

02_MIN_110_5_text.indd 2336 02_MIN_110_5_text.indd 2336

Church of Montgomery v. Ala.-W. Fla. Conf. of the United Methodist Church, Inc., 411 So. 3d 328, 333 (Ala. 2024) (finding a lack of subject-matter jurisdiction because it would require the court to „resolve a dispute on the basis of religious practice or doctrine‰). 498. See Understanding a Plan FiduciaryÊs Duties, supra note 495. 499. See, e.g., John H. Langbein, The Uniform Prudent Investor Act and the Future of Trust Investing, 81 IOWA L. REV. 641, 649–50 (1996); see also Alon Brav & J. B. Heaton, Brown Assets for the Prudent Investor, 12 HARV. BUS. L. REV. ONLINE, art. 2, 2021, at 1, https://journals.law.harvard.edu/hblr/ wp-content/uploads/sites/87/2022/02/Brav-and-Heaton-Brown-Assets-for-thePrudent-Investor.pdf [https://perma.cc/D9R7-L65Z]; David H. Webber, The Use and Abuse of LaborÊs Capital, 89 N.Y.U. L. REV. 2106, 2188–89 (collecting state statutes that mirror ERISAÊs exclusive purpose/exclusive benefit rule). 500. 28 R.I. GEN. LAWS § 28-7.1-4 (2025) (requiring covered defined benefit plans to comply with provisions in 29 U.S.C. § 1024(b)(3 ; N.Y. STATE DEPÊT OF FIN. SERVS., REPORT ON THE EXAMINATION OF THE CHURCH PENSION FUND 4 (2013), https://www.dfs.ny.gov/system/files/documents/2021/07/n1400c12.pdf [https://perma.cc/4WES-FZYX] (explaining that, since 1914, the New York State Attorney GeneralÊs Office regularly monitors the Church Pension Fund, which administers the pension system of the Episcopal Church). 501. See, e.g., Langbein, supra note 499, at 641–42, 649–50 (describing the Uniform Prudent Investor Act and noting that many states have enacted it). 502. See Johnson v. Evangelical Lutheran Church in Am., No. 11-23, 2011 WL 2970962, at *10 (D. Minn. July 22, 2011).

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503. Id. 504. Bacon v. Bd. of Pensions of the Evangelical Lutheran Church in Am., No. A15-1999, 2016 WL 3961960, at *1, *2 (Minn. Ct. App. July 25, 2016). 505. See id. at *8. 506. Id. at *4. 507. U.S. GOVÊT ACCOUNTABILITY OFF., GAO-23-105080, RETIREMENT PLANS: IMPROVED COMMUNICATION ON CHURCH PLAN ELIGIBILITY FOR FEDERAL INSURANCE COVERAGE 29 (2023), https://www.gao.gov/assets/gao-23105080.pdf [https://perma.cc/8BLB-KB7Z].

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C. RELIGIOUS LIBERTY DOCTRINE MAY PROTECT FAITH-

ALIGNED MUTUAL FUNDS FROM GREENWASHING CLAIMS BY THE SEC

for

15,

(Nov.

FY22

Results

Enforcement

508. See Press Release, U.S. Sec. & Exch. CommÊn, SEC Announces Enforcement Task Force Focused on Climate and ESG Issues (Mar. 4, 2021), https://www.sec.gov/newsroom/press-releases/2021-42 [https://perma.cc/26FD -V3N9] (introducing a new task force that will „proactively identify ESG-related misconduct‰); Amanda Shanor & Sarah E. Light, Essay, Greenwashing and the First Amendment, 122 COLUM. L. REV. 2033 (2022) (offering a comprehensive overview of greenwashing); Press Release, U.S. Sec. & Exch. CommÊn, SEC Announces 2022), https://www.sec.gov/newsroom/press-releases/2022-206 [https://perma.cc/ 7KRD-KJU2] (indicating increased SEC focus on ESG concerns and giving examples of recent cases against bad actors). For a discussion of these enforcement actions, see Barbara Ballan & Jason J. Czarnezki, Disclosure, Greenwashing, and the Future of ESG Litigation, 81 WASH. & LEE L. REV. 545, 588–91 (2024) (discussing SEC enforcement actions). 509. See supra Part I. 510. See SEC Inspire Press Release, supra note 59; Waddell, supra note 59. Among the firmÊs nine ETFs are products with tickers, such as BIBL (Bible), BLES (Blessed), WWJD (What Would Jesus Do?), GLRY (Glory), and RISN (Risen). See Discover Inspire ETFs, supra note 43. 511. See Inspire Investing, LLC, Investment Advisers Act Release No. 6710, (Sept. 19, 2024), Investment Company Act Release No. 35326 [https://perma.cc/ https://www.sec.gov/files/litigation/admin/2024/ia-6710.pdf 6BMN-YRK5]. 512. Id. at 4.

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513. Id. 514. Id. at 2, 4. 515. See id. at 1 (explaining that the SEC decided to accept InspireÊs settlement offer). 516. Id. at 2. 517. See Ira C. Lupu & Robert W. Tuttle, The Mystery of Unanimity in Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, 20 LEWIS & CLARK L. REV. 1265, 1291 (2017) (detailing how Hosanna-Tabor extended a very longstanding recognition that the Constitution precludes judicial determination of ecclesiastical questions).

02_MIN_110_5_text.indd 2340 02_MIN_110_5_text.indd 2340

518. Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94, 116 (1952). 519. Hosanna-Tabor Evangelical Lutheran Church & Sch. v. Equal Emp. Opportunity CommÊn, 565 U.S. 171, 171 (2012). 520. See, e.g., Gaddy v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints, 665 F. Supp. 3d 1263, 1282 (D. Utah 2023); Huntsman v. Corp. of the President of the Church of Jesus Christ of Latter-Day Saints, 127 F.4th 784, 792 (9th Cir. 2025). 521. Frequently Asked Questions: What Is Biblically Responsible Investing?, [https:// perma.cc/E2BS-URFG] (summarizing InspireÊs biblically aligned mission). 522. SEE Global X S&P 500 Catholic Values ETF: 2025 Summary Prospectus, GLOB. X 2 (2025), https://www.globalxetfs.com/prospectus-regulatory/ ?id=547 [https://perma.cc/9PSB-BGXZ]; see also supra Part III.A.

INVESTING, https://www.inspireinvesting.com/faq

INSPIRE

02_MIN_110_5_text.indd 2341 02_MIN_110_5_text.indd 2341

523. Burwell v. Hobby Lobby Stores, Inc., , 682 (2014) (holding that Hobby Lobby, a closely held corporation, could deny its employees contraceptive coverage due to religious objections). 524. The Names Rule requires a registered investment companyÊs name or fund to accurately reflect its investment practices and not be misleading. 525. See Press Release, U.S. Sec. & Exch. CommÊn, SEC Adopts Rule Enhancements to Prevent Misleading or Deceptive Investment Fund Names (Sept. [https:// 20, 2023), https://www.sec.gov/newsroom/press-releases/2023-188 perma.cc/9VL6-WVE5]. 526. Id. 527. Id. 528. See James Britton, The SEC Names Rule Will End ESG Investing as We Know It – ThatÊs a Good Thing, CORP. COMPLIANCE INSIGHTS (May 14, 2024), https://www.corporatecomplianceinsights.com/sec-names-rule-esg -investing [https://perma.cc/6LD2-SRP9] (noting that the political right is critical of ESG investing); 2025 Names Rule FAQs, U.S. SEC. & EXCH. COMMÊN (last updated Jan. 8, 2025), https://www.sec.gov/rules-regulations/staff-guidance/ division-investment-management-frequently-asked-questions/2025-namesrule-faqs [https://perma.cc/HB3J-V7ZP] (responding to common questions about the revisions to the Names Rule); Press Release, U.S. Sec. & Exch. CommÊn, SEC Extends Compliance Dates for Amendments to Investment Company Names Rule (Mar. 14, 2025), https://www.sec.gov/newsroom/press-releases/ 2025-54 [https://perma.cc/97ST-SHEN] (announcing a six-month extension of the compliance dates for amendments adopted in September 2023 to the Names Rule).

02_MIN_110_5_text.indd 2342 02_MIN_110_5_text.indd 2342

529. See Rick Garnett, Prof. Alan Brownstein on This TermÊs Church-State Cases, PRAWFSBLAWG (Feb. 12, 2014), https://prawfsblawg.com/2014_02_profalan-brownstein-on-this-terms-church-state-cases [https://perma.cc/8MR2 -DCM4] („My key point is that we have to work hard at not seeing religious liberty issues through the red and blue prism of contemporary culture wars.‰). 530. See Alan Brownstein, Religious ÂWokeÊ Capitalism? The Problem with Conservative Arguments Against ESG, HILL 2022), https://thehill.com/opinion/judiciary/3780778-religious-woke-capitalism-the[https://perma.cc/U4ZM problem-with-conservative-arguments-against-esg -TQNQ] (noting that ESG issues can include both religious and secular concerns that cater to both right and left political beliefs).

(Dec.

19,

02_MIN_110_5_text.indd 2343 02_MIN_110_5_text.indd 2343