Pope Francis, October 2016 in Malmo, Sweden.
London CNN Business  — 

For some Catholic investors, it’s no longer enough to do no harm. They want their money to help the world’s poorest, and they’ve got the backing of Pope Francis.

While Catholic investment funds have traditionally avoided businesses that are inconsistent with church teachings, there’s a growing movement towards “impact investments” that actively deliver a social good.

Since 2014, the Vatican has held three impact investing conferences that were aimed at helping Catholic institutions understand how private capital can help the poor. One was held as recently as June.

At the inaugural conference, Pope Francis called for “markets (to) serve the interests of peoples and the common good of humanity.”

His endorsement generated momentum across the faith towards impact investing, according to Beth Collins, managing director of impact investing at Catholic Relief Services (CRS).

The humanitarian agency helped organize the Vatican conferences, and Collins said that CRS has put around $4 million of its own funds into impact investments.

Those include a loan to a company that makes products with vanilla sourced from farmers in Madagascar. While the money benefits the farmers, the loan is expected to generate a financial return that will be re-invested.

‘An additional tool in the kit’

Amit Bouri, CEO of the Global Impact Investing Network, said he has seen growing interest from religious groups.

He credits the Pope’s leadership for inspiring Catholics, as well as increased awareness that investors can go beyond simply screening out unethical companies.

“Folks were always acutely aware they could stay away from products and services they didn’t want to be associated with, but were trying to figure out ways to deploy capital in a more constructive fashion,” explained Father Seamus Finn of OIP Investment Trust, a fund that works with over 200 Catholic organizations.

Finn said his organization has invested as much as $50 million in impact investments, including in the 8 Miles Fund, a private equity firm that backs farmers and other businesses in Africa.

“If you help farmers with management of their land … the yield returns are significant in terms of a multiplier effect — and that benefits the farmer, his family, the local community,” said Finn.

CRS acknowledged that there is sometimes a perceived conflict between charitable groups, especially religious ones, doing good and making a financial return. But Finn said that view is slowly changing.

“Everybody’s becoming more educated,” he said. “Some projects initially do need grants or loans, but in terms of long-term viability, everybody wants to see that it’s sustainable.”

“There is still a need for grants, but this brings an additional tool into the kit,” he added.