Ethical consistency in investments: Reflection on the Mensuram Bonam document and the impacts of mining

Executive Summary

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MENSURAM BONAM – FAITH-BASED MEASURES FOR CATHOLIC INVESTORS: A STARTING POINT AND A CALL TO ACTION, is a Vatican document that seeks to provide religious and ethical principles for Catholic investors. The premise with which it is guided is decisive for believers and people of good will: it says that faith-based investments are a way of practicing the following of Jesus today (MB 10).

The article we present here is based on an analysis of the document Mensuram Bonam (MB) and is part of the proposals that the Latin American Network of Churches and Mining has been making, within the framework of the Divestment Campaign, to promote ethical alternatives in the investments of faith-based organizations. This process is the result of years of accompaniment to territories affected by the extractivist economic model, with emphasis on the violations of human rights and nature perpetrated by mining companies, which, in turn, occupy important places as beneficiaries of investments in the global economy.

The document Mensuram Bonam takes up the proposals of the Social Doctrine of the Church, which is inspired by the following principles: the dignity of the person, human rights, the common good, solidarity, subsidiarity and participation, and the universal destination of the goods of the earth (MB 22-23). In this analysis, other current principles are added: social justice, care for the common home, inclusion of the most vulnerable and integral ecology.  A very important contribution to these reflections: for the first time in an official document, the Vatican includes mining among the sectors that are not recommended for ethical investments, due to the growing impact of these ventures.

Mensuram Bonam suggests that the Social Doctrine of the Church has three particular resonances for investors (MB 24):

• Escape from «fiduciary absolutism», the closed logic of financial engineering focused on short-term profits, which rejects all ethical responsibility. What this means in a positive way is: to embrace the call to change one’s vision and assume ethical responsibilities in investments.
• Using faith-based measures to encourage groups in society and the economy that are committed to change on the basis of ethics (social and environmental). Hence the call to develop and deepen best practices in social and environmental responsibility.
• Imagining what is needed and what is possible for integral and future-oriented human development.

To effectively offer individuals and Christian institutions investment criteria, the document presents a framework in which each principle of the Social Doctrine of the Church is articulated with implications for investment and questions for discernment (MB 25).

The prophetic imperatives of faith are increasingly aligned with the needs of social justice and sustainability. MB aspires to a new investment culture, combining technical knowledge with the ethical orientation of faith.

The aim of this contribution is for financial asset managers to not only seek to benefit themselves, but also to care for society and Creation with a view to the Common Good (MB 32).

We recognize that adopting a different investment culture is not easy. It requires learning and unlearning, changing assumptions and expectations, and carefully rethinking each stage of the investment process.

A key to moving forward in these terms can be found in Pope Francis himself and his methodology for reading the signs of the times, which can be applied to faith-based investments. His three steps are to contemplate, discern and propose.

This methodology involves an institutional process that rethinks financial investments and proposes:

• Formulate a financial investment policy statement.
• Reviewing risk parameters, to take due account of both financial conditions and ethical expectations.
• By adopting faith-consistent objectives, reshape the investment reasoning system. Performance questions and criteria impact strategies and become a filter for investment choices.
• From faith-consistent criteria, make more precise decisions about asset types, securities, properties, issues and other fund options.
• By monitoring and evaluating progress, invest safely for the institution and, at the same time, in line with the vision and values of the faith.

Financial investment consistent with faith is a journey, rather than an income or a guarantee of fixed results. Any Catholic institution that uses financial resources to fulfill its mission faces a dual responsibility: to manage resources prudently and to provide financial support for its mission.

Sometimes it can be difficult to determine whether an investment is socially responsible. Information is either unavailable or incomplete. But that can’t stop us from looking for ethical investments. Some say that «ethical investments can jeopardize profitability». Well, recent experience shows that socially and ecologically sustainable investments can offer an equal or superior final return in the long term; ethical criteria must take precedence over profitability (MB 39-41).

Investment policy is complex and cannot be left to a single person in the organization. It must be consistent with the management and governance of the institute of consecrated life or the diocese. For this reason, it is advisable to have an advisory team. The investment of financial assets (or patrimony) should take into account the possible immediate and long-term impacts, direct or collateral, on people, communities, the climate and the earth, our common home (MB 41).

Choosing which organizations to invest in is not a neutral task. It has to do with our charisms, our spirituality and our mission.

Proposals from the Churches and Mining Network:

• Mining is an economic activity that in Latin America and the Caribbean has a dark face and devastating practices. Even mining companies that operate legally leave behind a trail of destruction. Affected communities and scientific research point to the negative consequences of extractive activities.
• Mining companies claim to be sustainable, but mitigation (damage reduction) and compensation measures are insufficient to repair the damage caused. These and other negative impacts on nature and human beings, especially the poorest, are justified in the name of a «progress» that is guaranteed for a privileged few.
• Christian faith and charity call us to care for our Common Home, God’s gift to all. The Lord Jesus calls, today and always, to practice fraternity as the greatest commandment. And mining, as it is carried out in our continent, shows clear signs of what the Pan-Amazonian Synod calls «ecological sin», which is also social.

Investing ethically in the financial market is no easy task. There is a serious structural problem. Global capitalism is increasingly marked by «financialization». In other words, those who have money to invest in the financial market earn more than those who work in the production of goods and services. Economist Ladislau Dowbor calls it «the domination of unproductive capital» (Dowbor, 2019, p.9-34).

• Several of our countries have a high interest rate, which favors «rentiers» and financial institutions, which effectively produce nothing.
• Pope Francis, in the apostolic exhortation «The Joy of the Gospel» (Evangelii Gaudium), denounces financial speculation and the absolute power of the market, and calls on governments and economic leaders to carry out financial reform (EG 56-58,202,204).

From the ethical point of view, it is necessary to have a Christian vision in order to make conscious choices that do not seek only profit. The ecclesial institution must choose well, train, supervise and evaluate the work of the economic and financial team. This team must also be in tune with the Church’s choices in favor of socio-environmental justice (Laudato Si) and the promotion of fraternity and social friendship (Fratelli Tutti).

• The Churches and Mining network has already gained several signatories to the Divestment Campaign and some religious congregations are already analyzing their investment portfolio to withdraw from funds that support mining.Other congregations are experimenting with investments in activities that truly benefit people and Mother Earth, such as family farming cooperatives.