By Debbie Carlson
A mass shooting at an elementary school this week left 19 students and two teachers dead, renewing a debate over gun control.
The Uvalde, Texas, massacre was the 27th school shooting this year, according to Gun Violence Archive , an independent data-collection organization.
Faith-based investment funds have long tried to reduce gun violence through advocacy, with some success.
One fund family, Praxis Mutual Funds, has worked on this issue in conjunction with other faith-based groups for at least 20 years. The fund manager follows pacifist values, so it has no weapons investments in its $2 billion asset pool.
Since the company’s funds don’t own gun stocks, company management doesn’t directly engage with gun companies, unlike other denominations, such as the Adrian Dominican Sisters .
Instead, the fund, which is connected to the Mennonite Church in the U.S., approaches gun violence from a cultural basis, advocating with retailers and banks to limit their business with the gun industry.
An early success, the company says, was a 2004-2008 campaign with other concerned investors around improving implementation of video-game rating systems, which was relatively new at the time.
Mark Regier, vice president of stewardship investing and director of sales for Praxis Mutual Funds in Goshen, Indiana, spoke to MarketWatch about the company’s work, some of the limits of investor advocacy and a solution he wishes for.
This is an edited transcript.
MarketWatch : Faith-based investment funds have tried to reduce gun violence for many years now. What are some of Praxis’ efforts?
Regier : Starting in 2018-2019, we started looking at how the credit-card companies and banks are involved. Citigroup /zigman2/quotes/207741460/composite C -0.55% imposed new restrictions on lending to retail clients involved in the gun business. Car rental companies like Hertz /zigman2/quotes/227855833/composite HTZ +0.48% and Alamo, national hotels like Wyndham /zigman2/quotes/209332327/composite WH -0.85% and Best Western, airlines like Delta /zigman2/quotes/200327741/composite DAL +1.02% and United /zigman2/quotes/205037281/composite UAL +1.45% stopped offering National Rifle Association-related promotions.
We’ve been involved with conversations that led to Dick’s Sporting Goods /zigman2/quotes/200566298/composite DKS +5.41% and Walmart /zigman2/quotes/207374728/composite WMT +1.32% ending the sales of some of their weapons. Kroger /zigman2/quotes/206215053/composite KR -1.89% has chosen to exit the firearms business.
MarketWatch : Gun investments are a complicated issue, aren’t they? When Russia invaded Ukraine, there was talk about whether ESG funds should own defense companies, and now we’re talking about another school shooting.
Regier : [Ukraine] just gets to the complexity of this issue. In that case, weapons are supporting democracy and defending the weaker against the stronger. Weapons aren’t so much, “what’s all good and what’s all bad,” but it’s the idea of how do you orient your perspective on this?
We have screens that deal with military weapons, weapons of mass destruction, chemical weapons and landmines. When you get down to the personal use, it’s a little harder; we have a lot of hunters in our traditions, but the companies that make the hunting rifles also make handguns. And many of them have also moved into other forms of long guns that, sadly, become a regular part of these horrible situations like Texas, and [last week’s mass killing of 10 people] in Buffalo. And so, we’ve found it best to avoid all of those manufacturers.
Like alcohol, there are benign uses of some of those things. People like to have a glass of wine at dinner. It’s not the end of the world. Where it affects the investment process is, how do you want to be involved with it? Sophisticated values-based investors try to get behind the complexity. We have screens for distribution, we have production, screens for retail. We want to separate out the restaurant chain like Chili’s [owned by Brinker International /zigman2/quotes/203470869/composite EAT +4.83% ] and Applebee’s (Dine Brands Global /zigman2/quotes/205160666/composite DIN +2.71% ) that sell beer and wine along with food. Giant liquor conglomerates have a very strong interest in the mass sales and advertising in low-income communities targeting people of color. We don’t want to be involved in that.