Finance is at the service of people

“Give, and it will be given to you: a good measure will be poured into your bosom, it will be squeezed, shaken and overflowed. » It is this extract from the Gospel of Luke that gives its name to the Roman document devoted to ethics in finance. mensuram bonam. The Vatican has been working on this issue for years. We know that Pope Francis, like his predecessor, is very sensitive to this. With good reason: the economic and financial world has faced several warnings in recent years, most notably the subprime crisis of 2007-2008. The Pope emphasized that it is a crisis that we have not learned from If Laudatoand yet who was “an opportunity for the development of a new economy more attentive to ethical principles and a new regulation of speculative financial activity and fictitious wealth”. But he added: “There was no reaction that would lead to a revision of the outdated criteria that continue to govern the world”.

Finance continued to develop without any connection to real economic activity as if nothing had happened; an automated, robotic finance invaded by mathematics and new technologies, a finance that is slightly above the ground, tends to apply its own laws to economics and politics, encourages sometimes reckless risk-taking, often pursues the goal of immediate profitability, and ignores the real utility of the economy: to serve and in the end, from a man. Money, the good servant, seems to have become the master. gold, “Money is not a command, it should serve”mentions the document.

Is morality good for business?

Do investors have an interest in respecting morality – even if morality is not to support their interests, in this case to make money? According to Pierre de Lauz, the answer is nuanced. “In the short term, you can make money, for example, with a hedge fund, without respecting moral principles. But usually not long term. Anyone who breaks morals almost always breaks his face. »

According to mensuram bonam, “Responsible investing can ultimately deliver equivalent or better performance over the long term. […] In times of crisis, companies with high self-confidence suffered smaller losses and recovered more quickly than the market average..

“Ethical investments have increased significantly in the secular world”Economist Pierre de Lauzun, one of the authors of the Roman text, explains to FC. “But there was no synthetic text in the Church, prompting congregations and dioceses to improvise in their corners. » Thus, this document compiled by the Dicastery for the Service of Integral Human Development, then the Pontifical Academy of Social Sciences, which synthesizes the opinions of many experts from several countries. His title, mensuram bonamthe “good size”, shows its purpose: that people who want to invest their money correctly measure the resources at their disposal and allocate them in the best way. Its caption is self-explanatory: “Faith-Continuity Measures for Catholic Investors: A Starting Point and Call to Action”. Therefore, we deal with a doctrinal, theoretical text, even if it contains doctrinal elements, but with a series of practical recommendations designed for action.

“Good job, good product, good profit!” »

What are these recommendations? All are inspired by the great principles of the Social Doctrine of the Church. The document refers to eight of them: human dignity, common welfare, solidarity, social justice, subsidiarity, attention to the common home, integration of the most sensitive and integral ecology. Common welfare is understood to be the cornerstone, the foundational principle of the whole. Purpose, reminds Le Figaro Cardinal Peter Turkson, president of the Pontifical Academy of Social Sciences “It’s about producing quality goods made in decent conditions for workers. The profit must be shared by all involved in the production: good work, good product, good profit! ». The goal is not only to demonize the financial world, which reflects what is happening in our society.

An example of a great principle to observe: human dignity. The text mentions this“Like human activity, investments are never neutral: integral human development will either be enhanced or diminished by this or that financial decision”. It is a useful reminder to those who believe that finance is a purely technical field – as the technicalization of the sector leads one to believe. An investor is urged to ask the right questions: Does the activity I am putting my money into promote or demean human freedom? Are human rights fully respected there? For example, one might be interested in Asian companies that charge low prices by employing low-wage workers with no social protection – or Western companies that have moved operations to Asia. Hence, unfair competition against companies that pay their employees properly. Another example: subsidiarity, the principle that everything does not come from above, it is necessary to respect the autonomy of civil society. The principle applies within the company, where every level of responsibility and decision-making must be respected.

The text emphasizes the concept of comprehension

To drive the point home, mensuram bonam indicates the exclusion criteria (twenty-four in total) from ethical investment, indicating the sectors in which it cannot invest: activities that harm life – abortion, armaments, contraception, research on embryos and even experiments on animals; addictive products – electronic games, alcohol, pornography. Of course, we cannot put all these activities in one bag. “We should avoid investing in harmful or immoral sectorsPierre de Lauzun notes. Sometimes it’s obvious: the abortion pill, pornography, these are bad things in themselves. So, no. Sometimes it’s less: for example, alcohol. Wine contains it. If one drinks it in a reasonable manner, it is not blameworthy in any way. In short, it’s not black or white. »

One of the strengths of the text is its insistence on the concept of understanding. “No investment algorithm will ever be able to simulate the human mind”, he says. In other words, investment freedom, judgment and respect for fundamental principles must be reconciled. So don’t be a maniac. “Investors are invited to exercise their acumen and therefore judgement, continues Pierre de Lauzun. It can’t be an automatic method, cross each criterion and voila! A mandatory sentence is needed.

There can be dialogue with the company other than “I opt/opt out”. For example, Total Energies is often chosen. Will I avoid investing in it altogether because it produces oil and gas, or will I support this company if I think it is moving toward a different business model? Here everyone is brought back to the information, reason and conscience at their disposal.

Avoid clichés

Let’s go back to the example of “clean” energies – that’s how they’re sold to us, anyway. Is it really more ethical to invest in electric cars than thermal cars? The latter, of course, consume oil, carbon and polluting energy, but electric car batteries require, among other things, graphite, much of which comes from China, where it is mined under deplorable conditions, with general indifference; the same goes for copper, an excellent conductor essential for electric motors and power supply terminals: at least the copper mines in Chile (13% of world demand) are not industrial. clean and human rights. Likewise, we know that wind turbine engines contain products that are not very environmentally friendly. Thus, the integration of respect for the environment into investment criteria, yes, a hundred times yes, but avoid fads, clichés, ready-made ideas. And the horse green wash, this way of greenwashing polluting activities to meet environmental criteria and give a clear conscience. Money was to be damned by the Catholic world; not so, he says mensuram bonam in essence it should be neither taboo nor totem.

It is a tool that should only be used in the best way. “The Church does not point the finger of accusation against business circles, Cardinal Turkson insists. We want to show that we appreciate this human activity. Making money implies ethical conditions. The idea of ​​our document is to create an investment culture in the Catholic world with investment criteria related to our Christian faith. »

A final question: what would be the scope of such a text? Does it only apply to Catholics, or is it of general interest to people of good will? “This text has more religious content than most texts of the Social Doctrine of the ChurchPierre de Lauzun regrets. I think it’s a shame. It is addressed to ecclesiastical institutes, dioceses and religious congregations, and, by the way, to Catholic believers. By the way, the text says that it may be suitable for others. It’s not emphasized from the start, which can make those outside the church feel like it’s not for them. » Indeed, the principles of the Social Doctrine of the Church addressed to reason can be observed by everyone. “Everything inspired by natural law – consistent with human nature – is accessible to everyone with a conscience and a brain.Pierre de Lauz summarizes. So that mensuram bonam aimed at all investors, professional or not, Christian or not. »

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