In all things, I have shown you that by working hard in this way, we must help the weak and remember the words of our Lord Jesus, who said, “It is more blessed to give than to receive (Acts, 20:35).”
When St. Luke wrote those words, around 75-85 A.D., he could have been writing the guidelines for Corporate Social Responsibility today.
Indeed, St. Matthew wrote that “the poor will always be among you” (Matthew 26:11), and Luke also admonished us to “share with those in need.” (Luke 3:1-11).
Yet then, suppose a corporation’s sole purpose is to generate profits for shareholders, as renowned conservative economist Milton Friedman famously argued. In that case, the only social responsibility of a business is to increase its profit. If an executive took on social responsibilities, he (or she) would be in breach of fiduciary duties. Then, the whole idea of corporate social responsibility would be moot.
Wall Street has been further fueled by the myth that socially, faith-based, value-based, or sustainable investing implies losing money while feeling good about it.
Faith-based investing means doing both – making money while employing social and moral factors.
Faith-based investing guides Corporate Social Responsibility under the rubric of how a corporate entity should act in a moral, not just economic, framework. Socially, faith-based, or sustainable investing is about making money while incorporating personal beliefs, feelings, and desires into investment decisions.
It is about adding Christian values to your investment decisions. My research will provide a narrative of the historical journey of value-based choices and how they may impact an investment portfolio.
It includes presenting research on the link between investing and the moral act of exercising good judgment. This includes research on Catholic Social Teaching (CST) and Corporate Social Responsibility (CSR). These areas are the foundation of the little-researched area of faith-based investing and investing practices that violate faith-based dogma.
As a subset of Corporate Social Responsibility, Faith-Based Investing is critical to a corporation’s moral and ethical duty to society. It is argued that despite Friedman’s edict that profit is the prime motivation for corporate activity, shareholders have a duty to family, community, and God by using money to do good. Further, shareholders must hold the boards of directors accountable by screening investments, voting proxies, and being active shareholders.
My research shows increased moral value when shareholders add faith-based strategies and go from passive to active shareholders. With participation from shareholders and investors, boards and executives are accountable, and the act of moral investing might be recovered.
In a free market where profits are paramount, is it moral responsibility to use them for social good?
Faith-based decision-making urges us to make ethical decisions when investing.
Catholic Social Teaching, a subset of faith-based giving, states under its Economic Justice for All that employment is a fundamental right that enables self-realization and consumption. By seeking investments that align with faith-based principles, investors can grow their faith into action by aligning their finances to their beliefs.
Pope Leo XIII and other Catholic social teachers started Catholic Social Teaching and advocated for human dignity in all aspects of Christian life. It is part of the natural right for everyone to improve their lives, but that also means people are meant to work together to improve everyone’s welfare socially.
Catholic social investment is based on Catholic theology and supplies guidelines for investors to make socially responsible decisions.
Religious organizations, in general, have pioneered morally conscious investing principles. As a result, under Christian values, faith-based investing supplies social good, not to mention a positive market differentiation from corporations that do not practice faith-based investing.
Faith-based investing may provide a Christian-based factor of corporate self-interest.
As Luke wrote, “Give, Give, and it will be given to you.”
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References:
Bible. (1983). The holy bible. International Bible Society.
Bishops. (1986). Economic justice for all: Pastoral letter on catholic social teaching and the U.S. economy. In Public letter. Retrieved August 26, 2023, from United States Catholic Bishops: https://www.usccb.org/upload/economic_justice_for_all.pdf.
Editor (2022). All talk, no trousers. The Economist, 2022 (October 1-7), 12.
Editor (2022). The circular economy. The Economist, 2022 (October 29 – November 4), 14.
Editor (2022). Three letters that won’t save the planet. The Economist, 2022 (July 23-19), 9.
Friedman, M. (1970, reprint from 1962). The social responsibility of business is to increase its profit. New York Time Magazine, September 13, 122–126.
Imogen, Rose, & Smith. (2020). The inconvenient truth about esg. BNY Mellon, 2020. https://www.bnymellon.com/content/dam/bnymellon/global-assets/documents/content/the-inconvenient-truth-about-esg.pdf
Leo, X. (1888). Libertas: On the nature of human liberty [Public letter]. Retrieved August 15, 2023, from The Holy See: https://www.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_20061888_libertas.html.
Leo, X. (1891, May 15). Rerum novarum: On capital and labor [Public letter]. In The holy see. https://www.vatican.va/content/leo-xiii/en/encyclicals/documents/hf_l-xiii_enc_15051891_rerum-novarum.html
Smith, B., Lawson, A., Jones, J., Holcomb, T., & Minnich, A. (2022, May 1). Trying to serve two masters is easy, compared to three: Identity multiplicity work by Christian impact investors. Journal of Business Ethics, 2022(179), 1053-1070.
Zimmerman, S. (2015). Why values-based investing might work: characteristics inherent in ESG could give investors an edge. Morningstar, 2015 (August/September), 79-81.