What is Socially Responsible Investing?

Biblically Responsible Investing (BRI) or Socially Responsible Investing, (SRI) is gaining in popularity around the US.  BRI is an attempt by investors to align their investment decisions with their personal belief system and convictions.

You know there is nothing in the Bible that gives you specific investment advice or tells you which stocks to buy in the stock market. But there are a lot of verses in the Bible about loving our neighbor, caring for the poor, and using everything in our life to honor God in all we say and do. And that “do” part includes how and in what we invest the money God has entrusted to us.

A socially responsible investor considers the nature of the business the company conducts as an investment criterion. This may include avoiding investments in companies that produce or sell addictive substances (like alcohol, gambling, and tobacco.) The investor may also seek out companies engaged in social justice, environmental sustainability and alternative energy/clean technology efforts, as well as investments that support religious beliefs.

The policies of some investment companies have been avoiding businesses that deal in alcohol, gambling and tobacco products since the 1940’s!

There are several formal organizations that advocate SRI. One is the Interfaith Center of Corporate Responsibility (ICCR), which is considered the foundation of the movement. It started in the 1960’s in response to companies making money from tobacco, tainted infant formula being sold to mothers in the developing world, and agent orange.

Paragraph 1926 of the Catechism of the Catholic Church tells us “The dignity of the human person requires the pursuit of the common good. Everyone should be concerned to create and support institutions that improve the conditions of human life.”

The United States Conference of Catholic Bishops (USCCB) has been active in SRI since 2003 when they issued a list of principles that they follow regarding Church investments.

The main points of these principles are:

Principle 1: The Conference should exercise responsible financial stewardship over its economic resources obtaining a reasonable rate of return on its investments.

Principle 2: The Conference should exercise ethical and social stewardship in its investment policy.

Their investment strategy is based on Catholic moral principles which support the virtues of prudence and justice.

The primary strategy of the USCCB is a refusal to invest in companies whose products and/or policies are counter to the values of Catholic moral teaching. Rather, they focus on investing in companies which promote the common good. The investments they choose either produce some significant social good or promote the Church’s service to the poor.

The USCCB reports no negative impact on the financial return of the Conference’s investments since these Socially Responsible Investment Guidelines have been in place.

You may be thinking that this type of investment strategy is great for the church but not applicable to you. But stop for a minute and think of all the issues that are considered “hot buttons” today, such as: pro-life; climate change; human trafficking; handguns; and addictive substances.

Are your investments supporting those issues which align with your faith?

We must be aware of how our investments support businesses that honor God. Money talks and the more we make our investments align with our faith, the louder our money talks.

As a nation full of investors, we can make a difference if we just take the time to do it. If the laity can keep the issues alive we can have more effect than politics ever will.

There are many faith-based investment companies that screen businesses for these issues such as “sin stocks” (tobacco, alcohol, abortion, etc.)

We can use our position as stockholders to help change the policies of various businesses. You can have an effect on the way companies run their organizations.

Baby boomers see the world differently than their parents did. Millennials see the world differently than the boomers. The younger the investor, the more aware they are of the companies they are investing in.

If you want to make a difference, carefully choose the company that you use for investment advice. Most investment advisors and financial planners are only focused on the return and not what the company is doing to get that return.

If you carefully choose your investment company you will be able to help make a difference. Don’t believe the story from 20 years ago that you will not earn as much on your investment if you focus on SRI. Business schools have provided strong evidence that companies operating with sustainability metrics can actually do better than their peers.

That doesn’t mean everyone will agree with you. Even within religious communities, it’s sometimes hard to convince everyone that you can do well while you are also doing good.

Paragraph 1916 of the Catechism tells us, “As with any ethical obligation, the participation of all in realizing the common good calls for a continually renewed conversion of the social partners.”

Our Gospel commitment to Christ’s Kingdom of love, justice, and mercy always includes advocating and supporting fairness for all. God calls us to form a community and to correct both the symptoms and causes of injustice that rip apart the solidarity of a community.  (US Catechism for Adults)

Through SRI we can have an impact in solving the social justice issues of our modern culture.