The era of ESG (environmental, social, and governance) investing is winding down, politically retreating, commercially discredited, and increasingly abandoned by the institutional investors who once championed it. In its wake, it leaves a vacuum and a hard lesson: 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™, has spent 15 years building a faith-driven multifamily investment model in which community impact is not a marketing claim but an operating system. He argues that ESG asked the right question but answered it badly. The one thing ESG got right, by his accounting, was reminding investors that investing is not neutral. “It made people start to realize – oh, my investment matters,” says Libman. “It is not just a neutral act.”
However, the execution collapsed under its own contradictions. ESG tried to build a universal moral scorecard for a diverse investor base with fundamentally different values. It became political, vague, and inconsistently applied. Fund managers slapped the label on almost anything, and investors had no reliable way to evaluate whether it meant anything. “You could really slap an ESG label on almost anything,” says Libman. “But where was the measurable impact?” Returns confirmed the problem: a framework that promised doing good while making competitive returns instead delivered below-benchmark performance and limited verifiable impact. For faith-driven investors, ESG outsourced the definition of values to Wall Street. “Faith-driven investors do not need Wall Street to tell them what is good,” says Libman.
The alternative Libman describes is not a softer version of ESG but a different thesis entirely. Where ESG treated impact as 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. “Caring is not charity,” says Libman. “It is a strategy. Better communities create better assets, and better assets create better investments.”
This distinction 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. Investing With Purpose tracks standard real estate KPIs – net operating income, occupancy, expense ratios – monthly and also developed Key Care Indicators (KCIs): metrics tracking the Purposed Impact at each Purposed Care Community, such as resident events, connections with on-site pastoral care, and acts of service. These are reported to investors alongside financial data, creating dual-track accountability that ESG funds never built. “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.”
With ESG in retreat, the space it occupied is genuinely open. Libman’s view is that investors with conviction, not consultants with acronyms, should fill it. The better framework is not complicated: biblical stewardship, transparency, purposed impact, and excellent investment discipline. The Purposed Care Initiative is one early signal of what this accountability structure looks like in practice, and whether it gains traction beyond faith-driven mandates remains to be seen. But the gap ESG has left is real, and the demand for something more rigorous is growing.
