Ethics and finance” “

The July-August number of “Europe infos”, the monthly of the Commission of the episcopates of the European Community (COMECE) and of the Catholic Office of Information and Initiative for Europe (OCIPE), is entirely dedicated to the question of ethical investments. The director of the periodical and general secretary of COMECE, NOËL TREANOR , introduces the special number. He calls the debate between Church and world of business on the question “necessary and urgent” in the West, and especially in our continent. His thoughts on the subject are quoted verbatim on page 19. A meeting on the question was recently held in Brussels. Held under the auspices of COMECE and the International Christian Union of Business Executives (UNIAPAC)), an ecumenical Christian association that comprises more than 30,000 members in the world, the meeting was attended by churchmen and exponents of the business and financial world. Here are a few thoughts that emerged from the reports. SOCIALLY RESPONSIBLE INVESTMENTS. “For a long time the world of investments has been perceived as soulless, but a relatively new concept, that of socially responsible investments (SRI), looks set to challenge this trend. The question is, will this new trend be sustainable and a real competitor to the norm?”, said PAULO SARAIVA, in his intervention at the meeting. The development of SRI in the European Union, he pointed out, has experienced an “impressive growth”, even if “not a uniform” one, in recent years. In 2003, over 330 billion euros were invested in institutional SRI, especially in the UK and the Netherlands. What are the motivations? According to Saraiva, “quite apart from the financial yield, these investments bring with them advantages at the social level and that of the environment. These advantages shore up a defence mechanism for financial institutions, so that their liability to social irresponsibility is reduced. They are also a way of avoiding having to pay future social or environmental litigation costs for violations of national and international regulations in these fields”. “Pressure – he said – has also come from employees and customers themselves”; they prefer to work for or do business with socially responsible companies. ETHICS AND FINANCE. “Liga-Pax Bank Gbr is a Catholic bank that works with various partners with the aim of spreading, on the basis of values of Christian inspiration, ethical investments on the capital market. In the German-speaking regions it is the exclusive distributor of a product called ‘Global Ethical Index'”, explained CRISTOPH BERNDORFF. It’s a product that permits socially responsible investments to be evaluated and put into practice; it was devised by “E.Capital Partners”, a group of independent financial consultants that works hand in hand with two Italian universities, the “L.Bocconi” in Milan and the Pontifical Lateran University in Rome. “In 2001 – recalled Berndorff – the two universities sponsored the ‘Osservatorio Finetica’, the first watchdog of its kind aimed at studying the relations between finance and ethics”. MORAL QUESTIONS. Is financial speculation compatible with morality? What are the ethically acceptable techniques of investment? How is the use of derivatives to be evaluated? These are the main questions that emerged during the debate. According to the reports, “there do not exist, per se, good or bad systems of investment”, and even “speculation is not per se immoral, because it is no more than the anticipation of a future position on the market”. “The problem arises – it was pointed out – when financial products are proposed to persons who don’t understand them and/or can’t derive any real advantage from them”; in other words when “the speculative activity is devoid of real economic justification other than the hope of striking it rich similar to that of a gambler who risks his money in the casino or who entrusts it to a bookmaker”. TWENTY RULES. In this regard the “Ethical Investment Association” (), created in France in 1983 by a group of women members of religious congregations with the intention of having their own savings managed in a financially responsible way, has formulated “twenty positive criteria”, presented during the meeting in Brussels; a kind of filter “to illuminate the economic world”, the criteria are especially focused on the social policy of firms. A policy of innovation and development, as a way of creating employment”, the “participation of employees in the added value of the firm” and “their responsibility in the organization of the work” are all of strategic importance. The document then underlines the importance of staff training and the “possibility of expression within the firm”. Other crucial points include safety on the workplace, the social utility of the goods and services produced, and active participation in the protection of the environment. The whole text can be consulted on page 11 of “Europe infos” on.