The Ireland-based Kiltegan Fathers of the St. Patrick Missionary Society are amongst the followers worldwide to answer Pope Francis's call upon the Church and the global community to acknowledge everyone's responsibility to care for the planet. Since the release of the encyclical letter Laudato Si’ in 2015, their congregation has been actively implementing strategies to reduce its environmental footprint and move towards impact investments.
First steps: The change starts at home
Fr. Seamus O'Neill, one of the Kiltegan Fathers, describes Laudato Si’ as a wake-up call followed by a commitment to its take on theology and spirituality. The year following its publication, the St. Patrick Missionary Society shifted its focus toward energy transition by harvesting alternative energy sources at the Wicklow congregation's retirement home.
The sixty-bedroom real estate compound had been using an oil-based heating system during the winter months. To adopt a new energy source, the congregation decided to reorganize its farmland, reserving thirty-five acres to grow biomass through willow crops. The choice for willow crops came from the understanding that this particular woody bioenergy is carbon-neutral since the amount of carbon dioxide liberated during power production has been extracted by the plant from the atmosphere during its lifetime. The new heating system replaced 45000L of heating oil annually, saving 133 metric tons of carbon from reaching the stratosphere yearly.
In addition to carbon-neutral biomass, they invested in solar panels and a wind turbine, which feed one-third of the house's electricity needs. Altogether, the adoption of renewable energy sources translated into a 12 to 15% yearly return on their initial investment.
A next step: Recasting the investment portfolio
Financial regulations in Ireland require congregations to hold a reserve equivalent to two years of operating costs. Traditionally, management of the investment portfolio (aka fund reserves) lies in the hands of a third party, a team of fund managers hired from the conventional market.
When the ESG movement began, finding finance professionals in tune with this holistic framework for sustainability was challenging. Even then, the Kiltegan Fathers committed to adjusting their investment portfolio to the ESG standards in addition to their long-lasting approach of banning any investments into the arms industry, pornography, and other inappropriate ventures.
Nevertheless, in recent years following Laudato Si’ and their joining the Catholic Impact Investing Collaborative, Fr. O’Neill notes that the Kiltegan Fathers have recognized that there is still a significant disparity between their mission and the businesses that compose their funding portfolio. By allocating their resources in the conventional market, their investments feed European and American multinationals, further enriching the wealthiest individuals and organizations and widening the inequality gap as a result.
Fr. O'Neill emphasized that this is far from their mission, which is to assist the most vulnerable community members in Africa and South America. The most aligned finance methodology would be to allocate resources into impact investments in those areas where the congregation focuses its missions. However, the unfamiliarity of fund managers with impact investing and private markets initially frustrated the congregation's appeal to identify appropriate investment opportunities in Africa and South America.
Building bridges through the Catholic Impact Investing Collaborative
To overcome their fund managers' lack of understanding of impact investing and implement a mission-centered funding strategy, the Kiltegan Fathers reached out to CIIC, a growing community of Catholic asset owners driven by faith and values towards socio-economic and environmental impact.
The collaborative exposed the Kiltegan Fathers to the kind of mission-aligned opportunities they were looking for in the Global South. This was owing to CIIC's broad knowledge and experiences among those committed to using capital as a transformative force for good, inspiring others to do the same.
Through CIIC conversations, Fr. Seamus O'Neill learned about the One Acre Fund in Africa, which would become the first beneficiary in the Kiltegan Fathers' journey towards impact investing.
Aligning investment and mission
Since the 1920s, even before its official foundation on St Patrick’s Day in 1932, the St Patrick’s Missionary Society has pursued its missionary work in Southern Nigeria and has steadily expanded to Cameroon, Zambia, South Africa, Malawi, Kenya, South Sudan, Zimbabwe, and other vulnerable places in the Global South. The Kiltegan Fathers' presence in Africa has always centered on impoverished and marginalized communities, with attention to their health, education, and infrastructural needs, caring for the local ecology and land use.
Thus, investing in the One Acre Fund in Africa, Fr. O’Neill observes, was a natural choice. One Acre Fund works to solve three of the local most pressing issues: poverty, hunger, and environmental damage, which are also central concerns of the Kiltegan Fathers. The fund operates as a non-profit social enterprise serving one million families annually by financing and training smallholder farmers to improve their harvests as a strategy to eradicate hunger in their communities.
The steps to align investment and mission started with identifying a compatible recipient organization, consulting impact-aware financial advisors, convincing the congregation leadership – which was promptly welcoming to the idea – and finally proceeding with the due diligence. After placing the first investment in One Acre Fund, St Patrick’s Missionary Society is already working with three other organizations in the pipeline to deepen their efforts in this kind of investing.
Going forward, the Kiltegan Fathers expect to transfer fully ten percent of their reserves into impact investments by the end of 2023, gradually expanding that initial target in the following years.
