Beyond ESG: Why One Faith-Driven Investor Says Impact Requires Infrastructure, Not Labels

The era of ESG investing is drawing to a close. Politically embattled, commercially discredited, and increasingly abandoned by institutional investors, environmental, social, and governance investing has left behind both a vacuum and a hard lesson. The vacuum represents a genuine opportunity. The lesson is more uncomfortable: impact language without impact infrastructure does not work, and investors who bought the label without examining the substance paid for both failures.

Steven Libman, founder of Investing With Purpose™, offers a distinct perspective on what went wrong and what a better framework looks like. His firm has spent 15 years building a faith-driven multifamily investment model in which community impact is not a marketing claim but an operating system. The ESG conversation, he argues, asked the right question and then answered it badly.

What ESG Got Right

One thing, by Libman’s account: it reminded investors that investing is not neutral. “It made people start to realize – oh, my investment matters,” he says. “It is not just a neutral act.” That realization was genuine and valuable. For a generation of investors told to chase returns and ignore everything else, ESG introduced the idea that capital goes somewhere and does something. The premise was sound. The execution collapsed under its own contradictions.

Where It Failed

The failure was structural. ESG tried to build a universal moral scorecard for a diverse investor base with fundamentally different values. It became political. It became vague. Fund managers applied the label inconsistently, and investors had no reliable way to evaluate whether an ESG designation meant anything at all. “You could really slap an ESG label on almost anything,” says Libman. “But where was the measurable impact?”

The returns confirmed the problem. A framework that promised investors they could do good while making competitive returns instead delivered below-benchmark performance and limited verifiable impact. The implicit bargain – accept lower returns, get meaningful impact – turned out to be a bad deal on both sides. For faith-driven investors specifically, the ESG framework carried an additional flaw: it outsourced the definition of values to Wall Street. “Faith-driven investors do not need Wall Street to tell them what is good,” says Libman.

Caring as Strategy, Not Charity

The alternative Libman describes is not a softer version of ESG. It is a different thesis entirely. Where ESG treated impact as something layered on top of an investment – a cost absorbed in exchange for a values designation – his model treats community investment as upstream of financial performance. The on-site Purposed Care Initiative (PCI) that Investing With Purpose runs inside its multifamily properties drives measurable outcomes: turnover falls when residents feel cared for, delinquency improves, reputation scores rise, and staff morale strengthens. The property becomes more stable as a result. “Caring is not charity,” says Libman. “It is a strategy. Better communities create better assets, and better assets create better investments.”

The distinction matters because it changes the economics. ESG asked investors to trade returns for impact. The conviction-based model argues that genuine community investment produces both – and that the assumption of a tradeoff was always the flaw in the ESG premise.

Measuring What Actually Matters

One of the more concrete departures from the ESG model is in how Investing With Purpose tracks and reports performance. Standard real estate KPIs – net operating income, occupancy, expense ratios – are tracked and reported monthly. The firm has also developed a measurement framework called Purposed Care Indicators (PCIs): metrics that track the Purposed Impact being built at each Purposed Care Community. How many resident events ran this month, how many people connected with on-site pastoral care, how many acts of service were completed. These are reported to investors alongside the financial data, creating a dual-track accountability structure that ESG funds never managed to build. “We do not want to be ESG with a cross on it,” says Libman. “We offer real disciplined investing with real underwriting and real returns, but coupled with real care and real accountability associated with that care.”

The Vacuum and Who Fills It

With ESG in retreat, the space it occupied is genuinely open. Libman’s view on who should fill it is straightforward: investors with conviction, not consultants with acronyms. The better framework, as he describes it, is not complicated. Biblical stewardship, transparency, purposed impact, and excellent investment discipline. The same operating rigor that any institutional investor would apply – with the addition of a community infrastructure that is built into the asset, not bolted on from outside. The Purposed Care Initiative framework is one early signal of what that accountability structure looks like in practice. Whether it gains traction beyond firms already operating with a faith-driven mandate remains to be seen – but the gap ESG has left is real, and the demand for something more rigorous is growing.