What comes to mind about corporate social responsibility or faith-based investing? Wall Street has persistently fueled the myth that socially, faith-based, value-based, or sustainable investing implies losing money while feeling good about it. Instead, faith-based investing is about making money while employing social and moral factors in investment decisions.
As conservative economist Milton Friedman argued, if a corporation’s sole purpose is to generate profits for shareholders, then its only social responsibility is to increase profits. Corporate Social Responsibility suggests a corporation should act in a moral, not just economic, framework.
Despite Friedman’s edict, shareholders have a duty to family, community, and God to use their money to do good. Socially, faith-based, or sustainable investing refers to investors generating positive returns by investing in companies that align with their beliefs and values. Investors can hold the boards of directors accountable by screening investments, voting proxies, and being active shareholders.
A brief look at the historical journey of value-based choices and how they may impact an investment portfolio adds perspective to the topic. Catholic Social Teaching (CST) and Corporate Social Responsibility (CSR) are the foundation of faith-based investing and present the link between investing and the moral act of exercising good judgment.
Pope Leo XIII and priests, bishops, cardinals, and popes started Catholic Social Teaching, advocating for human dignity in all aspects of Christian life. It is part of everyone's natural right to improve their lives, and people are meant to work together and support those in need.
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 in about the years 75-85 A.D., he could have been writing the guidelines for Corporate Social Responsibility in current times.
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). By seeking investments that align with faith-based principles, investors can grow their faith into action by aligning their finances to their beliefs.
In a free market where profits are paramount, the question arises: Is utilizing these profits for social good a moral imperative? Faith-based investing advocates for ethical decisions, encouraging us to align our financial choices with our values while yielding positive returns. By integrating our values into our investment strategies, we "feel good" about our options and actively contribute to positive change. Ready to invest in a better future? Join the movement towards impactful investing today!
References:
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