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What one of the world's oldest religions says about investing

Jainism is a member of the Dharmic religions, which include Hinduism, Buddhism and Sikhism, and 'is one of the world’s oldest religions, originating in India at least 2,500 years ago', according to a 2021 article by Pew Research Center.


Estimates of global membership vary from 4 million to over 10 million, with the majority in India, where it’s estimated to be the smallest of the country’s six major religions. It’s a rich religion, with a core tenet of Ahimsa: have as little negative impact on other life forms as possible. As you might expect this has real implications for Jain economics and investing.


In a recent paper by our friend and Jain professor and author Atul Shah, he summarizes the implications of Jainism for economics as 'Jains have developed their own unique approach to economic development which is strongly centred on sincerity and integrity' around Ahimsa, which 'encourages a light footprint in life, where consumption is to be simplified and minimized'.


Further, the Jain principal of Aparigraha – non-possession – offers a 'major departure from neo-classical economics', according to Shah: 'This principle completely rejects material happiness as an end goal..' as 'the more you possess, the more you become possessed'. As such, and possibly unexpectedly given aparigraha, a majority of Jain businesses are family owned – to ensure adherence to ahimsa and avoid aparigraha – as it is believed that the separation of ownership from management (the principal and agent problem to economists) risks both Jain principals in either party.

For investing, as one might expect 'Jains refrain from any industry which involves killing, like the meat industry or forestry', though Jains are allowed to participate in vegetable farming. Jain investors tend to also avoid debt/fixed income which is viewed as a 'transactional and instrumental approach [that] detaches any sense of obligation or responsibility' by the lender to the borrower. They also prefer to 'hold and sustain' their investments (read – low turnover/trading) as 'there is no desire to gamble or speculate…'. Cash may also play a larger role as a risk management measure to 'have sufficient reserves to cope…' with financial uncertainty.

For asset managers, consultants and others looking to work with Jain investors – be prepared for a deeply personal relationship, as 'business is conducted on the basis of relationships and trust' where how you conduct your business is very important: 'corporate social responsibility…[is a] duty, not a choice'.


In our ongoing search for investment policies and guidelines (IP&Gs) from across the faith-based asset owner universe, we’ve yet to encounrer a Jain IP&G. Though from this study and research we may imagine how a Jain IP&G might read, and we can also get a sense using other Dharmic IP&Gs and through our work on a Dharma Equity Index. We would be very happy to share these insights to those interested.

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