By Catherine Pepinster
Financial experts and church leaders responsible for trillions of dollars in investments meet today at a London summit organised by the head of the Vatican Bank on making investments more ethical and more effective.
Jean-Baptiste de Franssu, president of the Vatican Bank, is joined by 90 financial sector and church leaders to discuss ways to develop the financial markets so that Christian organisations can be more confident that they are investing their portfolios in accordance with church teaching.
Mr de Franssu, who talks of “turbocharging the market”, estimates that Christian funding could be worth as much as $1.75 trillion — a figure that includes the financial investment clout of religious organisations, charities and individuals as well as dioceses.
He and his colleagues want to encourage those with responsibility for investing Christian funds to both avoid investments that contravene church teaching — on topics such as the sanctity of life, war and pornography — and back those that promote it, on issues such as greening the environment and countering poverty.
An example of the difficulties Christian organisations face was Mr de Franssu’s own experience when he was first appointed to chair the Istituto per le Opere di Religione, commonly known as the Vatican Bank, and he found that Christian funds hardly existed. He discovered only 20 to 30 mutual funds out of thousands that were compatible with Roman Catholic teaching.
One impetus for the Christian world doing better as investor is the example set by the Islamic finance industry, which is projected to grow to $6.7 trillion by 2027 thanks to funds aligned to Sharia, Islamic law.
The starting point for today’s summit is Mensuram Bonam (Of good measure), a guide on faith consistent investing published by the Vatican’s Pontifical Academy of Social Science in 2022.
It urges Catholic institutions and individuals entrusted with assets to ensure that they are “invested, rather than merely spent”. Mensuram Bonam says investments should be “directed to reflect this gift of God to the human family, by serving the common good, respecting justice and ethical standards”.
Mr de Franssu told a press conference last week: “The whole purpose of Mensuram Bonam was to help all those people in charge of managing assets in the church or in institutions related to the church, to manage their assets with indispensable ethical criteria that should apply to that management.”
A previous summit explored the Mensuram Bonam document but the London meeting is aimed at bringing together what he calls “the whole eco-system of faith aligned capital”.
Working with five international specialist asset managers based in Europe and the US, he has convened data providers, investment advisers, and fund performance managers to look at how faith-consistent products can stimulate the financial market.
That first summit helped people like him realise that in the Catholic church there had been “no dialogue amongst people responsible [for investment]. So everybody does his little thing in his little corner, and nobody shares with the others. We are trying to break this.”
Although the aim of the summit is to encourage faith-consistent investing, Mr de Franssu said it was not a one-size-fits-all policy, with marked differences between Catholic organisations across the globe. He cited German bishops as being opposed to nuclear energy while the French were in favour of it and so would invest in such a business.
“In the Catholic church, money is totally decentralised … no one can dictate to anyone else … What matters is that you put in place an ethical policy that you believe meets your values,” he said. “But the process is going to be the same: the need to reflect; the need to discern; the need to ask the right question; to get to a portfolio that you believe is ethical and follows the values of Scripture.”
Publication of Mensuram Bonum highlighted that many people in the Catholic church, such as members of religious orders, charged with responsibility for investment, have little knowledge of finance and the Vatican is now working on an education programme to help such people better understand finance and become more able to make ethical decisions.
“If we achieve this, it will be a great leap forward,” Mr de Franssu said.
View the press conference on our YouTube channel here
