Ep. 053 - Investing with Purpose: Aligning Business Practices with Biblical Values

Episode Transcript

Spencer
Our theme the last few episodes has been how to discern the companies that God would have us invest in based on the products and services that they offer. But today, we want to actually go a little bit deeper and think even about the practices that companies use to develop those products and services and offer those, and whether those are God honoring.

Austin
Okay, so, Spencer, again, as we come back to this idea, we're looking at how we deploy capital, how we invest. And then again, that word invest means to clothe somebody. And we look at the scriptures and we say God has clothed us for a good task. We are to be stewards of all of his resources. And as his stewards, we are to use those gifts that God has given and bring them back before the Lord.

Austin
Use them in ways that he would be honored by. Use them in ways that he would want them to be used, not necessarily in the ways that we would. And so as we think about investing clothing companies and capital, we're not just deploying money into this ethereal market. We're actually putting money into companies. And so as we think about this idea of good practices, we want to first start off with the idea of what does God look like in a community.

Austin
And we look at the Trinity for this. So you want to watch us off. And why do we think about practices in the term of community and then community in relation to the Trinity?

Spencer
Right. So if we give a very visceral, tangible example of how a business could offer a good product and service, but not in a way that blesses the community. You know, think back a couple hundred years ago when we had companies that were setting up their operations in the Caribbean to, harvest sugarcane. Well, sugarcane itself is not a bad product.

Spencer
Tastes delicious. You know, you, you know, can make foods taste good. There's nothing necessarily wrong with that. But if you use slaves to in all of your practice is to make those to to harvest that product, then your practices are so abominable to the Lord. That and the way that that slavery, you know, permeated every level of society and hurt so many different people, then you have to say, okay, I don't want to, I would not want to profit from that.

Spencer
So when we think about practices, we want to make sure that those practices are in line with the biblical example. And we go back again, like you said to the Trinity, there is our original kind of look at things, and we look even at creation as a great example here. So if we look at the texts that get us to look at the father, the son, the Holy Spirit's contribution to creation, I guess we could say we go back to the beginning, and God himself is a loving community of persons, you know, three in one.

Spencer
And we see that clearly in the biblical text. So in Genesis one one, in the beginning, God created the heavens and the earth. Well, how does that work out? Well, if we look over at John one one, we say in the beginning was the word, and the word was with God, and the word was God. He was in the beginning with God.

Spencer
All things were made through him, and without him was not anything made that was made. Well, you know, in Genesis one one we see the father, creating. But we see in John one one the word Jesus right there with him also creating everything was created through him, and without him was not anything made that was made. Well, then we we hop over and we look at go back to Genesis chapter one in verse two.

Spencer
And we see now the earth was formless and empty. Darkness was over the surface of the deep, and the Spirit of God was hovering over the waters. Okay, now we have the Holy Spirit there. So we have all three of them taking part in creation. We could go, you know, if we look in the life of Jesus, we could we could see many times when God the Father is is speaking to Jesus, God the Holy Spirit comes down and puts his blessing upon Jesus the Son.

Spencer
So there's this, this unity, you know, within the Trinity, this loving embrace of one another, whether it's in creation, whether it is Jesus's teaching, you know, on, on earth. there are so many different examples, you know, of that. And so if if the world is created by this community of three in one, this natural, community loving community, then in many ways what we are trying to do is we're trying to mimic that, you know, level of love, that level of engagement.

Spencer
Now, we'll do this imperfectly. We are fallen, but we we want to look at the practices that a company has and say, okay, is this in line with that loving relationship that we see as the original design?

Austin
Yeah. And I think this as we really dive into, again, clothing companies and capital products are really easy to say. Well, yes, casinos are addictive. I want to avoid casinos pornography. It can produce sex trafficking. That's bad. I don't want to profit from that. Tobacco is giving cigarets to kids around the third world. I don't want to profit from that.

Austin
When we look at practices, it can be a lot harder to. You've got to really dive into the details and see, okay, this company or are they reflecting that love and care for all of the people, all of the stakeholders around? So when I deploy that capital, am I how do I look and see? Is this company reflecting that goodness of God as the Triune Trinitarian God that cares for this father, that cares for the son, that cares for the Holy Spirit, that lives in community, that is for the good of all of them, and then looks outward to the world and says, how do I bless the world?

Austin
How do I give life to the world? And so when we look at practices, it can be really challenging, because sometimes those are not as easy to discern. Is this company doing good practices? And again, like we've talked about a lot, there is a wide array of gray here because we're all fallen. Every human that runs a company, every employee of a company, every image bearer of God has been marred by sin.

Austin
And so there is not going to be any one company that says, yes, every one of your practices is good and true and beautiful and holy. But we want to say, okay, how do we avoid those companies that are destroying the communities that they're around? Are are they not loving their employees well? Are they going into communities and exploiting the the neighbors that they're around?

Austin
Those are things that we want to really look at as we think about this idea of good practices.

Spencer
Well, and as we think about it as well, we're we're not just mimicking God, you know, here, in and thinking about a triune God that interacts, but also what God did in creating Adam and Eve in the garden. You know, we even look back and say, the Lord God said, you know, in Genesis two verse 18, it is not good for the man to be alone.

Spencer
I will make a helper suitable for him. Yeah. So there is a relationship, and, and we could reasonably ask, well, what a helper for what? And, and so this was again before the fall. It is a helper to do the work that God has given us. So to build out creation. So there is even within the design, it wasn't just Adam that was working in the garden to build out, the, and innovate and cultivate and keep it was Adam and Eve together because it was the thing that was not good was that he was alone.

Spencer
So God had created everything perfect. but there were limitations there. He had not built everything out. And he was actually putting Adam and Eve together in community in the garden.

Austin
Yeah. And we think about this, in, in a work, there are things, even in our roles where I need you and you need me, and we need the rest of our team because we cannot operate independently if we operated in a silo, things would not go well. Right. And I think that's true of any industry as we need others.

Austin
And so we are co laborers amidst a global community of other laborers. And so we want to think where are those redemptive practices. Are we working well with one another. Are we really embodying that Triune God? Are we showing that beautiful communal aspect of work, or are we just trying to do whatever is best for me?

Spencer
Right. And we really like what Pope John Paul the II said here, the purpose of a business firm is not simply to make a profit, but it is to be found in its very existence as a community of persons who in various ways, are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole society.

Spencer
So there's a lot to unpack there. But basically we are a community of persons. We're trying to help each other satisfy basic needs, and we're also is a part of the whole society, thinking about how we do that, loving one another. Well, in the midst of this, yeah.

Austin
And even as we look at the word company, it's a mixture of two words from Latin com, which means with and panis bread, which I suggest we break bread together. We are in this together. And so if we think about just that idea of the word of company, we are a body. If we look at corporation etymology, their corpus is body.

Austin
suggest a group of people united together. Companies are intended to be a group of people working together towards a common and towards a common good. And so that's where we really start to thinking about those practices of companies. Are we a are we breaking bread together? Are we really working with one another? Are we collaborative or are we just trying to get ahead?

Austin
Are we fighting for the next dollar.

Spencer
Right. And we kind of think about this in different ways. We'll put within the show notes a visual that we really like the Eventide came up with. But as shareholders, we're thinking about, okay, we're investing in this company, but they've got customers, employees, suppliers, society, environment, communities. There are a lot of different stakeholders here, and most of them are people.

Spencer
Yeah. it comes down to it, you know, whether it's the employees, the customers, the suppliers, a broader society, the individual communities that people are a part of. The these are these are communities of people, and, and a company is going to have an impact on that. And the products and services, the products and services certainly will.

Spencer
But it's also the way that they go about providing those that we we really have to to grapple with at times.

Austin
Yeah. And I think, again, we come back to this idea of cultivating and keeping when we think about good practices and this idea of we have been given dominion, but we don't just need to imprint our thumbprint and say, this is what is what I want, and start taking a dominating approach towards this. We have been given responsibility by the Lord to be cultivators.

Austin
And so when we think about our customers, are we loving and serving them well? When we think about our employees, are we loving and serving them well? Are the companies that we put funds in that we close in capital? Are they doing this for their suppliers, for their society, or are they just taking a domineering approach and saying, this is my stake in the ground, and I'm going to do whatever I want to manipulate to make a profit?

Austin
So Spencer, let's first touch on we're going to talk through each of these six stakeholders and how a company can really embody good practices towards these folks. And so we're just going to hit on this at a high level. We might give a little bit of example of some industries, but we're we're going to dive in a little bit more deeply into the contrast between good and practices in the next episode.

Austin
So we've got customers, employees, suppliers, society, environment and communities. We'll start off with customers. I think this one is fairly easy to look at when you have a company that just tries to eke out the most dollar and generate as much revenue as they can for a good or a service, they're not providing a a good that's actually good.

Austin
They're just trying to eke out as much revenue as they can towards that customer. We think back on the products last time. Are they creating these things that are addictive, and then advertising it in such a way that they know they're going to manipulate the customers to come in into these addictive practices, into these addictive behaviors, or are they exploiting their customers?

Austin
Are they trying to gain as much revenue as they can by exploiting the people that buy their goods and services?

Spencer
Well, and again, we could say, are they also creating an adversarial relationship? Yeah. Where it's it's really more of a hate hate relationship with the, the consumer. And you could even look at it like the payday loan places oftentimes, there's no one that really walks in there that's like, oh yeah, I understand all of the legal fees.

Spencer
And you know, I understand that you're and charge me, you know, 1% a day or whatever it is and and feels good about that. Yeah. It's just it just doesn't happen. Right. the same kind of thing you could say for a lot of the insurance, you know, types of products for small appliances. You know, most of the time, people they're preying on people or the extended car warranties there, preying on people that just haven't really thought through this.

Spencer
And even the people who make the claims now, they're in an adversarial relationship, typically with folks who are on the other end of the line, who are attorneys, you know, that are hired by these people. So, you know, do we have a business that, yeah, they're going to be profitable, but it's entirely adversarial.

Austin
Yeah.

Spencer
so the second place that we look at is the employee side of things. And this is there's a lot of gray, you know, to this, any company that is employing people, they are paying those people. hopefully. but, you know, are they, are they setting up their wages, their compensation, their benefits in ways that they're really trying to bless them?

Spencer
They're trying to give them a path forward? Or are they saying, okay, I'm just going to go minimum wage. There's going to be no real skill development. There's going to be real no opportunity set here. Are they really thinking about their employees as, people that they want to invest in over a period of time? And certainly a company needs to be able to garner, a, a level of, of benefit, you know, from those employees.

Spencer
But are they looking at it more collaboratively, or are they looking at it in a way that they're really trying to, you know, bless employees significantly? Or is it just, again, it's kind of that adversarial relationship of I'm gonna crack the whip, you need to get in here. You need to do exactly what I say I do. There's no level of, you know, autonomy or creativity or those kinds of things.

Spencer
Yeah.

Austin
And I think what we'll see as we look around this, these different stakeholders is that idea of is it an adversarial relationship or is it a harmonious relationship with a lot of these companies, the the good practice companies, they create a harmonious relationship where they know that if they treat their employees well, then they'll probably get more return out of them.

Austin
They'll they'll get a higher level of productivity out of them, where if you're cracking the whip, you might have a lot of turnover. you didn't pay them well, so you don't really care. Right. And so it's adversarial. And so when we think about suppliers, this idea of, again, is it adversarial or am I trying to constantly undercut you constantly cut back on the profit that you make by selling me a good or a service?

Austin
I think about, a big box retailer that had a partnership with a bean company and they said, hey, we want to cut the prices back. And so you're going to have to cut the prices on us. Well, the bean company was like, we can't make any money off of this. So they said, well, we will now not sell your beans in your stores.

Austin
Well then the customers were like, I want those beans. Those are the best beans. And they got mad at the big box store. And so the reality is, when you try to pull one of these layers and take advantage of a supplier, then it's going to directly affect customers, which then also directly affects the employees, because the employees have to take on the pain of the customer just by trying to eke out 12 more cents.

Austin
And so the reality is sometimes these practices, they don't seem bad. But if you're trying to undercut at every single level, then it it oftentimes contained the entirety of that relational, relational agreement and not just a supplier. So are you treating your suppliers well? Are you honoring that they are creating goods that are helping your business thrive?

Spencer
you know, another area that we think about is the suppliers, you know, that relationship between, different firms and there are better and worse versions of this. You know, we think about, one fast food company, for instance. I'm aware of that. They're looking to partner with local farmers in lots of different places. And this is an international company, but they're trying to find locally grown food to be able to put into their supply chain as much as possible.

Spencer
And they're trying to honor those relationships and pay them well because they know that the food is going to taste better at the end of the day, and that they're going to bless those communities that they're part of. Another example would be, you know, even the big box, you know, retailers there are better and worse ways that they go about working with suppliers.

Spencer
So I'm aware of one that, as they work with their suppliers, they may say, hey, you know, we're looking at the marketplace and we need the cost of these goods that we're selling on behalf of you. We need these to come down because we see it's not sustainable in the marketplace. You know, you're pricing them too high, but we're willing to work with you over time.

Spencer
So we need to see a price cut of 15%. But we're willing to work with you over the next couple of years to help you get there, to keep you profitable, to keep you in business, and to keep that relationship. So there are better and worse ways. There's other companies that just say, hey, you know, this other firm over there, they they're offering a 15% price cut.

Spencer
I know we've been doing business for seven years. but they came to us last week, and so you've got a week to either match or leave. That's not a relationship, you know, that endures over time or that really honors, that, that, relationship. So it's a gray area, but there are better and worse practices, whether it's a large retailer or a fast food company or anything, that's out there.

Spencer
Yeah.

Austin
When we think about these next few society and the environment and again, we look at it and are they creating harmony or are they creating adversarial relationships? When we think about a society is when a company moves in, whether it's a supply chain company, whether it's a manufacturing company, a restaurant, are are the community that they are investing in?

Austin
Are they excited that they're going to be there when they see the sign? Does it bring delight and joy that that company is coming into the community, or do they have a an awareness of this name brand that produces fear and anxiety of what is that going to bring about? And that's what we want to think about in, in the society round here is, does it bring joy to the community where they're launching their business?

Austin
when we think about the environment, one of the big things that I consider here is textile industries. you can create textiles that don't pollute the environment. You can utilize clean technology, clean resources to where it actually makes clothes that people need, which are a good that we need to put on to our bodies. I don't like walking around naked.

Austin
Yeah, I don't want to walk around in a society where everybody's naked. but the reality is the textile industry can be really damaging to the environment. It can produce these byproducts that absolutely destroy water resources. And so are we investing in a company that actually knows what they are doing and dumping their dyes into the river and just says, I don't care, or are they trying to mitigate all of those things?

Austin
And so when we think about how a company invests and their society in their environment, are they realizing that dumping dye into the water source then pollutes the river, that the people that are in the community need a drink from? If so, that's not a practice that is a good practice.

Spencer
Right. And and we again don't see those that level of regulation in the, in the third world oftentimes as we do see in the United States and the West. And so, it's that transfer of pollution, you know, to other parts of the world that we certainly would not be excited about in our own backyard, that we have to grapple with.

Spencer
the final one, would be, you know, more broad. Are we excited about, again, the impact on society writ large? so, you know, there are companies that are out there that, you know, an example would be some of the entertainment companies that are out there are the stories that they're telling. Are they stories that we think help society?

Spencer
Yeah. the entertainment that's out there, do we think that it really is helping society? Now, again, you may say this, this is one of those gray areas I'm just not going to get involved in in discerning here. But I will tell you that the stories that are on, say, Angel Studios are far different than the stories that you will find on Netflix.

Spencer
far more redemptive. Now, you know, there may be some stories there that are corny or, you know, they don't speak to you or whatever, but I'm going to be far more comfortable with my kids or myself being exposed to those stories than I am just picking a Netflix, you know, series at random. Because the, the, the core, the moral fiber is going to be quite different oftentimes.

Spencer
So we kind of think about, again, society when we think about local communities like you're talking about. But then we also think, okay, is this blessing or hurting our moral characteristics, fiber as a whole, the stories that we tell each other, the way that we look at the world, what those companies are offering. Yeah.

Austin
So since we've walked through briefly those six areas of good practices, those stakeholders that we want to ask, are companies really blessing each of those stakeholders? Can you give us that? Maybe a couple questions that we could ask for how do we really evaluate a company?

Spencer
Well, and these are in line with what we've said but are customers delighted. Do employees love their jobs? Our suppliers valued strategic partners. Are communities better offer the companies presence. Is the environment being cared for and protected? And as the world made a better place by this company's existence, those are just a handful of the questions that we could ask ourselves as we kind of evaluate again, do we want to close this company with capital?

Spencer
Do we want to profit from their operations from what they do? we hope that you found value in this episode. If you have any questions, don't hesitate to reach out to us. Love to have a conversation with you. And until next time, take care. We want to thank our friends at the Eventide Center for Faith and investing.

Spencer
Jason Meyer and his team did a fantastic job helping us to grapple with the biblical wisdom on investing. Many of the quotes and thought leaders that we cite come from their original research.

Austin
If you found this episode valuable, share it with a friend and subscribe on your favorite podcast platform so that you don't miss the next episode.

Disclosure
This content was provided by Second Half Stewardship. We're in Knoxville, Tennessee, and you can visit our website at www.SecondHalfStewardship.com. The information in this recording is intended for general, educational and informational purposes only, and should not be construed as investment advisory, financial planning, legal, tax, or other professional advice based on your specific situation. Please consult your professional advisor before taking any action based on its contents.