Introduction to Zug FCI guidelines
Download your copy of the full Guidelines.
By Martin Palmer
The story of
the relationship between faith and finance is as old as
the story of the world’s faiths. The tension between
guiding the faithful towards a more spiritual life in
the midst of material temptation is one which has both
guided and bedevilled the great faiths for millennia.
The simple fact is that as the faiths grew, they became
important providers of education, of health, of welfare
and of compassion. They have needed to find, and store
up, finance to support their sacred buildings, their
clergy, their lay staff, their publications and their
social care responsibilities.
In ARC we
always talk about two aspects of the impact of the
faiths that are relevant for environmental and
development issues.
First there is the
Wisdom of religions. Each faith has centuries of
experience of working with peculiarities of human
behaviour within the context of a greater vision of the
meaning and significance of life. Faiths have built up
vast store of wisdom, in many cases believed to be a
gift from God or the gods, but often also through
dealing with people and communities through times of
deep distress, great joy and simple ordinariness.
Secondly, there is the Business of
religions. The faiths own about 8% of the habitable land
surface – about 5% of all commercial forests are owned
by faiths. They run, manage or founded around half of
all schools worldwide – 64% in Sub-Saharan Africa
according to UNICEF. They have more TV and radio
stations between them than the whole of the EU and
produce more books, newspapers and journals than any
other network. They also own an estimated 10% of the
world’s total financial investment. The Business of
religion involves managing these assets and through the
investments and ownership of businesses, raising the
funds necessary to support their medical, educational,
organisational and social care responsibilities.
If we (whether we think of ourselves as
living within or outside religious structures) are to
understand the social, environmental and sustainable
development role the faiths can play, it is vital to
consider both these aspects. Simply focusing on the
wisdom without appreciating the business dimension is to
produce a lopsided view. To only concentrate on the
business without understanding the beliefs and values
which motivate it, is to miss the point of why the
faiths are potentially so vital to planning
environmental and sustainable development around the
world.
These Guidelines take you into what
the faiths own (where that is possible to be detailed)
and into what their priorities are for future investment
in environmental and sustainable development. But they
also all look at core values. Without understanding what
motivates Buddhists based on the Buddha’s teachings;
what inspires Hindus from the sacred book Bhagavad-gita;
why the Methodists of the UK find inspiration in their
founder John Wesley – it is impossible to understand the
values which will drive their positive investment
programmes.
To put it simply. You need to
know why in order to understand how.
This is
why these Guidelines have been created.
The
tension between faith beliefs and financial practice is,
as mentioned earlier, an ancient conundrum. Many faiths
have traditionally been quite clear about what they will
not invest in. “Negative screening” has been happening
for millennia. So for example, Islam, Daoism and
Christianity have traditionally had a ban on usury. In
all three cases, but in different ways and for a variety
of reasons, this ban has sometimes slipped. But the
reintroduction of Islamic Banking in the early 1970s
marked a dramatic return of this core religious
principle.
Many faiths have explicitly
banned investment in armaments, alcohol, tobacco,
gambling and anything to with crimes such as
prostitution or illegal drugs. Some have also banned all
investment in certain kinds of husbandry, be that the
ban in Judaism and Islam on pig farming, or the ban in
Hinduism and Buddhism on killing cattle – and in some
cases in causing the death of any animal.
In
recent years this negative screening has increased with
new issues and aspects of investment coming on the
scene. For example, many faiths are now engaged in the
carbon disinvestment movement – removing their
investments from fossil fuel industries. In October 2017
40 major Catholic funds publicly divested from fossil
fuels to commemorate St Francis Day, the Catholic day of
ecology. This kind of action is in response to awareness
of the impact of burning fossil fuels on the climate and
can be partly seen in the light of the United Nations’
long-term programme on addressing climate change. Other
religious fund managers have taken stances on issues to
do with human rights or social justice – for example
disinvesting from businesses invested in regimes which
oppress a sector of the community such as the stance
against apartheid in South Africa and the religions’
support for the Civil Rights movement in the USA in
1950s and 1960s.
It is now fairly easy to
find out what the faiths are against. This set of
Guidelines takes us to another question: What are the
faiths for? Or: What could or should the faiths be
investing in to support the creation of an environmental
and sustainable world? Or as the cover question on this
book asks:
What do you do with your wealth to make a better
planet?
In 2015 ARC was asked by the United Nations
to co-host a meeting of the world’s major faiths with
senior representatives of several sectors of the UN to
discuss the forthcoming Sustainable Development Goals
(SDGs) a set of 17 “Global Goals” which represent a
collective vision and aspiration for what a world in the
future could represent, and what we could all,
collectively, work to make happen.
The
meeting took place in Bristol, UK in September 2015 and
24 faith groups presented Commitments (known now as the
Bristol Commitments) to action in support of various
SDGs. At the event, many faith representatives observed
how the SDGs were predicated on one economic model –
essentially consumerist capitalism and the desirability
of economic growth – and that there were alternatives
that should be acknowledged and considered.
In studying these Commitments, the UN
noticed that nine of them spoke of either having decided
to move some aspects of their investments into
environmental and sustainable development ventures or
that they were planning to do so. This piqued the
interest of both the United Nations Development
programme (UNDP) and the Organisation for Economic
Cooperation and Development (OECD). This is because if
the SDGs have a chance of being implemented there has to
be a huge values shift in the world of investment. If we
are going to have a world with good health and
well-being, with quality education, clean-water and
sanitation, affordable and clean energy, where the goal
of no poverty and all the other SDG goals will have come
true, then investment and attention need to move now
into supporting environmental and sustainable
development products and initiatives. The faiths, with
clear values, ought to be one of the very first
communities to be able to respond to this.
In 2016 ARC was commissioned to research the
potential for the faiths to become more pro-active as
investors and the result was the launch of a booklet
titled Faith in Finance at an international multi-faith
meeting in Nanjing. This short book explored how and why
faiths invest. It traced the rise of what is known as
‘faith-consistent investment’; put this in the context
of the SDGs; compiled core teachings on finance from
seven faiths and ended by proposing an international
meeting of the major faith investment groups to take
forward the potential for faith-consistent investment.
The Zug meeting (October 30-November1 2017) and these
Zug Guidelines are the direct result of that research
and that book.
When we invited the many
faiths and faith investment advisory groups (including
for example the US-based Interfaith Center for Corporate
Responsibility and JLens, the main Jewish financial
advisory group) to send us their guidelines for
positive, pro-active investment in environmental and
sustainable development, we were not sure what response
we would get.
For some faith groups this was
an area that they were already engaged in. For example
the Council of the Evangelische Kirche in Deutschland
(EKD) were able to send us the third edition of their
Guideline for Ethically-Sustainable Investment in the
German Protestant Church. Others had touched upon this
issue only primarily in the context of negative
screening, such as the SGPC Governing Council of the
Sikhs of India. Yet others including the China Daoist
Association (because it is still recovering from nearly
being wiped out in the Cultural Revolution) and Shinto
of Japan (for whom offering advice is not part of their
tradition) had never thought about this for a variety of
reasons. Several traditions, including the Buddhist
Association of China, are interested in what is
happening in Zug this year, and although they are not
represented in this booklet, will be discussing their
own Guidelines.
This is why, when you read
the many Guidelines in this book, you will see they
offer a huge variety of levels of engagement and
understanding of their potential role in the ‘impact’ or
ESG/SDG world. This reflects both cultural and religious
diversity. And if this were not so then you would not be
truly hearing the voices of the world’s oldest and most
successful sustainable communities because they are
hugely diverse.
The wisdom and insights
contained here come from communities who have steered
their people through wars, ecological collapse, civil
wars, famine, drought, plague, delight, terror,
opportunities, hope and despair over millennia. As
Gunnela Hahn of the Church of Sweden said at a
preparatory meeting, the time perspective of the faiths
represented here “is eternity”. And, as they always are,
those faiths that are in this movement are in it for the
long haul.
At one point there was concern
from some of our advisors that there was too much wisdom
and not enough business. However these Guidelines are
about why there are the values capable of driving a
“value-driven” investment programme. These values do not
appear from nowhere. They arise from the core beliefs
and teachings of the faiths and this book opens up this
fascinating and highly motivated world for outsiders.
We asked each group to write Guidelines not
just for the faith’s institutional investment programme
but to also act as advice to, or a model for, individual
believers. For example in our research we found there
are some 70 Christian entrepreneur groups around the
world helping wealthy Christians to invest in a
faith-consistent way and many of the Christian
Guidelines in this book will be useful to such groups.
We also found that the Oxford Centre for Hindu Studies
is the main advisory group on faith-consistent Hindu
investment worldwide and offers this as much to families
and individuals as it does to Hindu organisations.
It was also decided by our steering group
(funded by WWF-UK) to ask each of our sponsors if they
wished to write (or send us their existing statement of)
a document about their own values. Most of them did and
it was clear that for some this was also a journey
beyond negative screening and into positive investment
and that they too sometimes found it difficult to fully
articulate what that would really look like. We are
grateful to all those who did contribute. You can see
summaries of their values document at the end of this
book.
Zug was planned as a unique event
bringing together eight faiths (and 30 traditions within
them) as well as bringing together for the first time a
number of faith investment advisory organisations: ICCR,
Muslim Charities Forum, JLens, the Church of Sweden
(representing Lutheran Churches of Scandinavia), the
Oxford Centre for Hindu Studies and Globethics. Between
them they have outreach to over 500 other faith
investment groups. It is estimated that between them all
they have access to some three trillion US dollars of
investment money, a proportion of which could be
committed to actively engaging in investing in
environmental and sustainable development projects.
As a result, a platform for continuing this
emerging partnership, not just between the faiths but
also with the UN, development banks and the private
sector, is being developed, to be based in Geneva. The
Zug meeting was planned to be the launch of a new level
of engagement and it could change the faith finance
scene in a profound way, and with it, the kind of
businesses that find finance.
This
publication is just the start of a journey. We invite
all those interested in faith-consistent investment –
the faiths themselves; lay members of the faiths; the
UN; philanthropies, the investment world and the wider
environmental and development world, to work with these
Guidelines to help ensure that the wealth and the wisdom
of the faiths working with so many others interested in
such investment, helps to make a better planet.
Finally a big thank you to our generous
sponsors who made this possible: Charles Stewart Mott
Foundation; Earth Capital Partners; Hermes Investment
Management; Linius Capital; The Pilkington Foundation;
Rathbone Greenbank; Resiliance Brokers; Sarasin and
Partners, Tribe Impact Capital, Triodos Investment
Management, WHEB, WWF UK. Special thanks also to R20,
Swiss Impact Investment Association (SIIA) Globethics
and Geneva Agape.
Bath, October 2017
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