“Individual Christians who are shareholders and those responsible within church institutions that own stocks in U.S. corporations must see to it that the invested funds are used responsibly…their stewardship embraces broader moral concerns.” (United States Conference of Catholic Bishops, “Economic Justice for All,” 354)
Most people do not realize that the Catholic church presents very clear direction on how an authentic Christian should, and should not, invest their assets. If you think about it for more than 5 seconds, all the dots start to connect.
- In Genesis, humankind was given dominion, and stewardship, over all creation.
- When asked about the greatest commandment, Jesus makes his famous statement about loving God above all else and one’s neighbor as one’s self.
- The Second Vatican Council states “…the social order and its development must invariably work to the benefit of the human person.”
- The parable of the talents is all about investing the gifts God has given us, even to the point where the servant who buries his talent in a field is thrown into the darkness!
I could go on and on. Indeed, investing encompasses nearly every aspect of the Christian life, yet it is too often thought of as outside the sphere of faith. Conscientious Catholics vote in alignment with the precepts of their faith. Many individuals will not shop at a store that is suspected of violating human rights or damaging the environment through the production of goods. Yet, the vast majority of individuals have no idea if those same companies are owned in their portfolio! Or worse, they use a mentality that business and investing somehow get their own set of ethics and disregard their faith completely in these decisions.
Think about your portfolio. Do you own individual stocks or mutual funds? Do you know every stock held in that mutual fund? Are you certain the stocks held, individually or within funds, do not engage in the production of abortifacients or embryonic stem-cell research? These issues are known as intrinsic evils, meaning that no amount of good can justify the evil inherent in them. In other words, no amount of profit or diversification can justify holding stocks that participate in these activities. That is not my opinion, that is Church teaching. What about environmental depletion? Pharmaceutical price gouging? Child labor in supply chains? Are you profiting from these extrinsic evils?
But enough of the “Catholic guilt.” What about all the good that can come from investing ethically? That’s where I, personally, got really interested in socially responsible investing. Active ownership is a process by which an investor engages with the companies held in their portfolio to affect positive social change. Activist investors have encouraged numerous firms to start issuing sustainability reports that seek to measure and improve environmental impact. Some of the greatest active ownership achievements have made material differences on issues like human trafficking, child sexual exploitation, racism and sexism.
Furthermore, impact investing is a strategy whereby an investor proactively invests in companies that do good. There are large, publicly traded companies that make good global citizenship a priority. Those are the kinds of profits I want in my portfolio.
Business and investing should not have its own set of rules. If you’re still unsure, check out my piece “The Catholic Case for Ethical Investing” available on http://www.elinvestments.net/literature.* Talk to your financial advisor about socially responsible investing. If they don’t know as much about it as you do, it’s probably time to start interviewing new advisors and living your faith in your portfolio.
About the Author
KJ Smith, CFP®, ChFC®
KJ Smith founded Ethos Logos Investments after realizing that most socially responsible investment advisors are focused solely on the institutional market, thus leaving individuals and small business owners without the exposure, resources, or guidance necessary to integrate their morals and ethics into their portfolio.
KJ has over a decade of industry experience working with Catholic institutions, Fortune 500 companies, closely-held business owners, independent contractors, and individual investors. He is a CERTIFIED FINANCIAL PLANNER® and a CHARTERED FINANCIAL CONSULTANT®. He has a BBA from Loyola University Chicago where he majored in Finance and minored in Theology, including two summers studying abroad in Rome and Spain. He is a parishioner, a cantor, and a finance board committee member at Our Lady of Mercy Parish in Aurora, IL. He is also on the leadership team for Fit Shepherds.
KJ and his wife, Amanda, just welcomed their 4th child in 2018. KJ enjoys coaching his kids’ sports activities, hunting, working out, and spending as much time outside as possible.
KJ recently presented a workshop on Socially Responsible Investing to a gathering of Life and Justice leaders from throughout the Joliet Diocese. We encourage you and your parish to consider further study of this important, but often overlooked, area of Christian discipleship. We highly recommend KJ for an engaging and informative parish presentation.
*Securities offered through Securities America, Inc Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Ethos Logos Investments and Securities America are separate entities.