September 16, 2009

Faith-Based Socially Responsible Investing and the Economic Crisis

Rev. Séamus P. Finn OMI addressed the implications of the global financial and economic crisis in his presentation at the Berkley Center on September 16, 2009. 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. “Faith-consistent investors” he said, have a window of opportunity, through the leverage afforded by their vast and varied financial holdings, to press for changes in regulations and corporate practice that would foster a more sustainable, ethical, and equitable global economy.

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. He said, “Through partnership with other like minded investors and by inviting their members to see these opportunities and tools to reshape the financial system and to actively provide opportunities to the poor across the world, the faith traditions can make a very important contribution to a reshaped financial system and the alleviation of the suffering that poverty causes.”

Rev. Finn argued that faith-consistent investing could be seen as being as 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 - to work for adequate governance by the company’s board of directors

Rev. Finn, a director of the International Interfaith Investment Group (3iG), has operated for many years at the intersection of finance and faith, working with religious groups to help them invest in accordance with their beliefs, and speaking for faith groups in extensive negotiations with corporations and financial institutions. He is on the executive committee of the International Interfaith Investment Group and serves on the board of the Interfaith Center for Corporate Responsibility.

Rev. Finn has made available the paper on which his presentation was based.

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Rev. Séamus Finn OMI is a member of the Missionary Oblates of Mary Immaculate and a board member of both the International Interfaith Investment Group (3iG) and Interfaith Center for Corporate Responsibility (ICCR). He is also a leader in faith-based and socially responsible investing, will draw on his experience with the ICCR and 3iG, organizations that help the faith traditions make investments that accord with their beliefs. The cornerstone of his advocacy with corporations and financial institutions is a call for greater transparency and disclosure by the companies and a reliable regulatory and supervisory framework that has a global reach.

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