Church and ethical investment - A case for Sustainability

Originally published in 'Challenge Magazine' issue No.80 of May and April 2005

We all hear about how corporations have to be socially responsible in their activities, but are the churches practicing what they preach when it comes to their own economic activities? JOHN CAPEL of the Bench Marks Foundation raises the question and invites us ail to think about it.

Historically the churches have been a leading voice on economic justice issues. Economic justice includes the treatment of workers, health and safety, HIV and Aids, empowement, as well as environmental concerns - waste management, pollution control systems, biodiversity and, ultimatley, the sustainibility of life for present and future generations.

While corporations bring many benefits to society, many do not consider social and environmental sustainability. South Africa bears testimony to one of the highest inequalities between rich and poor, high unemployment and destitution and is noted for its levels of toxic emissions into the atmosphere. These practices are not sustainable and arrest the rest of society.

Socially responsible investment practices started here in the 1970s and 80s when the international community, urged by the church's calls for human rights and dignity, persuaded multinational companies investing in South Africa to observe certain standards of socially responsible behaviour. At the time. this included recognition of trade unions and workers rights to collective bargaining. Since then we have come a long way but we are still faced with child labour, health and safety and broader environmental issues.

Church and economic activity

The international community and In particular the churches in the USA, UK, Canada and Australia have been promoting investment decisions that promote human rights and dignity and the integrity of creation. They have decided that how they invest their pension fund monies must be in accordance with their faith. This means that investment decisions must go beyond the fiduciary duty to nuke a positive financial return, but that they should also promote economic social and environmental sustainability.

Corporation are legal personas in terms of the law or juristic persons and therefore have rights and responsibilities. They have rights to operate and to make profit but how this is done must be in a responsible way that takes into account human rights and measures to safeguard the environment. If corporations operate with disregard for the impact of their business on the fabric of society or with scant regard for the environment, people and the atmosphere, then what sort of 'pesson' is this? Would such a person be welcome in your home?

Is it sustainable to bave economic growth that does not create jobs but rather exacerbates poverty and puts wealth in the hands of a few? Is it sustainable to pollute the water systems that feed us all but in particular impact on poor communities? Is it sustainable to burn up the world's fossil fuels without exploring alternative energy sources? These are the questions we all have to ask ourselves.

The church's role

Ethical investment is concerned with these kinds of questions. This is one area of economic justice that the church can influence directly and this should give us hope. Most churches have pension funds that are invested in corporations through fund managers. We need to know what criteria the fund mangers ate using when they invest our money. Is it purely financial criteria or do the criteria take into account human beings, a living wage, job creation, the safety and protection of the environment? Is where we invest out monies sustainable? Yes, we might receive great returns from investments in a corporation that at the same time pollutes our water systems and has lax health and safety standards.

The question we must face is the responsibility of stewardship given to as over the earth and all living things. Just how an we invest ethically according to our faith without compromising the financial returns or our members? How an we influence economic development that benefits our people and safeguards our environment?

The Bench Marks Foundation of Southern Africa for Corporate Social Responsibility (BeFSA) was set up to answer these questions. BeFSA arises from decisions taken in 1993 at the Brooderstroom and Utrecht Conferences on a past apartheid investment policy.