Ethical Investments – Learning from Others

Originally published in 'Challenge Magazine' in the first of 2006

The past year has come and gone and the Bench Marks Foundation for Corporate Social Responsibility (BeFSA CSR) continues to seek ways of taking the campaign for ethical and socially responsible investment to a higher level. To do this we have been engaging with some churches separately, with the intention of soliciting from them what the best ways would be for the religious community to influence corporate behaviour. Part of our consultations included an Asset Management company which shares the same ideals that we do at BeFSA CSR. Indeed there is a lot that we are learning from these interactions.

What we want to share with the readers is strategies adopted by some of our global partners to enforce ethical responsibility and accountability from business. This we do to demonstrate that collective action by churches has the potential to influence business when it disregards ethical and sustainable values that are important to their investors.

A collective body was set up at the beginning of this year in England by a wide range of churches which include Catholics, Quakers, Anglicans, Salvation Army, Presbyterians, etc. The group, called the Church Investors Group (CIG) is a collaborative ecumenical venture that seeks to empower and inform members as they pursue their own independent views and policies on investments. Through it, the member organizations and religious bodies seek to increase the witness and influence of the church in society. According to a statement released by the CIG, they seek to do this by formulating and implementing policies relating to investment that are based on Christian principles; and acting together on such matters whenever possible. “The re-launch of the CIG demonstrates how seriously the churches take the issues of socially responsible investment (SRI). We wish to act proactively and recognize that, collectively, we carry significant financial and moral weight to promote the SRI agenda”, said John Cunningham, the Group chairman.

Among other things the CIG aims to enable members to make joint representation to company managements with a view of encouraging socially responsible investments. They also seek to enable members to make public statements either individually or in collaboration on matters of ethical principle relating to investment and socially responsible business practices.

This is a positive story that encourages us in the work we do. While BeFSA CSR recognizes that there are fundamental differences in the context and history of European churches and those in South Africa, we nevertheless believe that there are important lessons we can learnt from this initiative. The potential impact of collective church action can never be underestimated. Up to this point ethical investments have not been made integral to the agenda of churches. Secondly when big pension fund companies, for example, are reminded of the power that ordinary members of churches have against them, they will begin to listen more attentively to the concerns of their clients. In a context where corporations still find reason to disregard their moral responsibility towards the community in which they do business, their workers and dependants, rules of fair competition and environmental integrity, the church needs to be empowered to combat these injustices. The churches need to unlock their power as shareholders. A lot of business misconduct thrives because of shareholder apathy, including that of churches.

The third lesson we learn from the CIG is that it allows different members to pursue their own policies. It does not pretend that there is unanimity around what constitutes socially responsible investments. It acknowledges diversity in terms of size, teaching, history, administrative systems and political outlook within churches. However diversity does not stand in the way for collaborative action. This is a mark of true ecumenism. Indeed corporate injustice requires ecumenical action. Churches in South Africa are not at the same level of awareness and financial sophistication; they do not wield equal economic power. Also commitment to socio-economic justice is not at the same level amongst churches. Thus we have one congregation of a particular church capable of remunerating its clergy a market related salary while another one can hardly pay for the municipal rates and taxes, let alone a stipend is a serious justice challenge. These and many other challenges can be better addressed at ecumenical level. A situation wherein the biggest African initiated church in South Africa, the ZCC, enters into a business partnership with a big cellular communications company, calls for a more honest conversation around the ethics of investment at an ecumenical level.

This is the approach that BeFSA CSR pursues, and we call upon churches to avail themselves to opportunities for conversation that we make possible. We continue to learn from others as we progress, including churches which have made a commitment to socially responsible investments, and we hope to show-case one of them in the next article.