Catholic institutions have hundreds of millions of dollars to invest – but almost no investment options if they want to ensure their funds are aligned with Catholic Social Teaching and reflect Catholic values.
That was the message coming out of the second Mensuram Bonam Faith-Consistent Investment Conference held in London, UK, on November 11-12 – and given the intensity, pace and enthusiasm of discussions at the two-day event, this will have to change in order to turbocharge Catholic-aligned investing.
Participants called for greater collaboration on FCI between Catholic institutions; the development of a framework for practical implementation of FCI with Catholic values; and for the establishment of a category for Christian/Catholic funds to make it easier for faith-based investors to identify suitable investment opportunities.
The two-day summit brought together people responsible for investing on behalf of the Catholic Church, Catholic religious orders and institutions from across the world, as well as asset managers and other organisations including FaithInvest.
Speaking before the event, Jean-Baptiste de Franssu, president of the Institute for the Works of Religion (known as the Vatican bank), which organised the summit, said the Vatican, Catholic dioceses and religious congregations have an estimated $1.75 trillion to invest.
But there are very few investment funds that are consistent with the teaching of the Catholic Church, he added, unlike the choice available to Muslim investors, who can find dozens of Sharia-compliant funds listed on investment-tracking websites such as Morningstar.
The Mensuram Bonam summit was aimed at coming up with practical recommendations on how to enable Catholic institutions to implement guidelines contained in the Pontifical Academy of Social Sciences' 2022 document Mensuram Bonam ('For Good Measure'), subtitled 'Faith-Based Measures for Catholic Investors: A Starting Point and Call to Action'.
It was supported by the Netherlands-based Anthos Fund and Asset Management, and US-based firms CBIS Catholic Responsible Investments, Catholic Investment Services and Knights of Columbus Asset Advisors, and hosted by the UK’s largest charity fund manager, CCLA, a significant provider of investment management services to faith groups in the UK.
In the first Mensuram Bonam summit in Rome last year, which brought together representatives of Catholic institutions, it was clear that there had not been enough dialogue on these issues among those responsible for investing, and that too few people really understood finance, said De Franssu: 'So there is a risk that lots of them do their little thing in their little corner, and there isn’t enough sharing with the others. We are trying to break this.'
FCI guidelines research
His words were reinforced by several presentations at the meeting, including the results of a research project looking at publically available investment guidelines from Bishops' Conferences (groupings of Catholic bishops in a specific region) around the world. It was able to point to only four 'full' guidelines and a few 'partial' guidelines – a clear indication of how FCI is still a relatively new concept for faith organisations, including Catholic institutions.
The full guidelines included:
Austrian Bishops' Conference
German Bishops' Conference
Italian Bishops' Conference
United States Bishops' Conference.
The partial guidelines included:
Belgian Bishops' Conference;
Catholic Bishops' Conference of England and Wales
Bishops' Conference of France
Irish Catholic Bishops' Conference;
Diocese of Christchurch (New Zealand)
Secretariat for the Economy of the Holy See (city state).
The paper found that while there were many areas of consensus in the different guidelines, they were also quite varied, both in terms of the subjects covered as well as style. For example, the Austrian Bishops' Conference guidelines were most emphatic about FCI as a hard requirement for all Church investors in Austria, whereas other guidelines give more discretion to investors, with words such as 'could' or 'might'.
However, the paper's authors concluded that 'this variety in opinions and approaches should be considered normal for these early stages of the Church's journey into FCI', adding: 'We should allow a lot of leeway for many voices in this dialogue between faith and finance. Progress towards greater FCI alignment should be an organic process that is driven by real world experience and by the search for what works well.'
'The richness of thought and high degree of alignment in the bishops' guidelines, and Mensuram Bonam, give us a strong foundation for further development... the implementation of FCI can become simpler and therefore more widespread' – The Mensuram Bonam Guidelines Comparison Research Project
Problems identifying Christian funds
Supporting Jean-Baptiste de Franssu's assertion that Catholic investors currently cannot find enough investment funds aligned with Catholic values came in a presentation made by investment research and ratings company Morningstar during the breakout session on fund classification and performance monitoring.
Although there is no category for Christian funds, Morningstar's Monika Calay said she had identified close to $80 billion in Christian assets in global funds, mostly in the US (nearly 70%) with the rest divided between the UK, Luxemburg and Ireland.
However, she admitted there were gaps in her research because she relied on key words such as 'Christian', 'Catholic' or 'Biblical' to identify funds. And some of the funds identified, such as those managed by CCLA, were not exclusively focused on Christian groups.
Conclusion
This was an inspiring, energising and forward-looking event. Indeed, it felt like a watershed moment for Catholic investors. The changes needed to transform the landscape to grow Catholic-aligned investing are being identified and the solutions sought. This will turbocharge faith-consistent investing – not just for Catholic investors but for all faiths seeking to invest in line with their values.