Faith-Based Socially Responsible Investing and the Economic Crisis
Rev. Séamus P. Finn, O.M.I., addressed the implications of the global financial and economic crisis in this presentation. The crisis is unique in the extent of its reach (global); the scale of its impact (trillions of dollars of capital destroyed); the genesis of the problem (at the center--Wall Street--and not the periphery); and the role of the state(s) in response (bailouts and stimulus packages). The global financial crisis offers a rare opening for true reform of financial institutions and corporations.
The poor around the world, Finn said, are the most vulnerable to economic shocks, and thus there is an imperative for faith groups, which have in common a mission to alleviate suffering, to work to demand of governments, financial institutions, and corporations changes that will minimize the kinds of systemic risk-taking that led to the most recent downturn. Finn argued that faith-consistent investing could be seen as equally integral to the mission of faith groups to alleviate suffering as the humanitarian relief work for which they are well-known. He outlined a set of specific measures faith groups could take (and in many cases, he said, already are taking) to best leverage their investments:
- to consider the sustainability of the activities that the faith group's investment is financing, as well as the leveraged nature of the company being invested in and the character of the risks it takes;
- to carefully examine, and work for changes in as necessary, company policies about human rights and the environment;
- to require that the company be transparent to shareholders and regulators;
- to require that the company be honest and comply with legal requirements in business lines;
- to require that they company be inclusive in those it employs and serves;
- to demand accountability for decisions about the company's products and services;
- to demand a fair compensation structure for top executives; and
- to work for adequate governance by the company's board of directors.