Rise in Catholic investment drives ESG trend


Catholic investing combines with Islamic finance, ESG metrics, and green bonds as a way to make money ethically.

The world’s more than one billion Catholics will flex their investment muscles after a certification system is in place to support financial products that reflect the teachings and values ​​of their beliefs.

In June 2020, the Italian consultancy Nummus.info, owned by the Italian Bishops’ Conference and other institutions affiliated with the Catholic Church, began offering the certification system that checks investments for a simple yes or no – do they or not? do they correspond to catholic values? So far, more than 20 different banks and asset managers – including Deutsche Bank, Nordea and Raiffeisen – have had their investment products supported by the system.

Pope Francis’ 2015 encyclical “On Caring for Our Common Home” spoke of social values, doctrines and environmental principles that Catholics could use to inform how they invested their money. However, there was no official way to certify whether a financial asset adhered to these ethical precepts.

Mutual funds that follow Catholic doctrines and principles use positive and negative screens. Contraception, stem cell research, tobacco, pornography, weapons, fossil fuel extraction, and unsustainable activities like forestry and fishing are typically being screened in favor of investments in low carbon technologies, technology transfer to poorer countries, and advanced employment practices.

But Nummus.info’s certification system seems to go further. According to CEO Claudio Kofler, an important turning point in the promotion of investment based on Catholic teachings came in September 2020 when the Italian Bishops’ Conference published a document providing guidelines on social responsibility, environmental and governance investments for economic managers of religious institutions how parishes and dioceses were outlined, parishes and charities. Based on this document, Nummus.info started its semi-annual certification process for the products in which its customers invest.

“The [Italian Bishops’ Conference] document is not simply a no-list as in the past, ”explains Kofler. “We also try to promote family and social aspects. A company that supports pregnant women or has a company kindergarten, for example, receives additional support. ”Kofler says that audits are carried out twice a year, and if certain investments are found to be non-compliant, the investment manager has up to three months to review sell the shares.

Massimiliano Cagliero – CEO of the investment management services company Banor SIM, one of the 25 companies certified by Nummus.info as compliant with the investment guidelines of the Italian Bishops’ Conference – says the official recognition confirms its approach to wealth management, which it has consolidated over the years. “We take a valuable and rigorous approach that combines responsibility and principles towards the environment, society and governance to promote an economy that is not based solely on profit,” he says.

Investments based on the Catholic model are picking up speed. Last year, the MSCI World Select Catholic Principles ESG Universal and Environment Index was launched, which excludes investments in companies involved in abortion or contraception, stem cells, and animal testing. The index is denominated in US dollars and is based on the MSCI World Index, which invests in technology giants such as Amazon, Tesla and Alphabet.

In September 2020, Lyxor Asset Management of Societe Generale launched its MSCI World Catholic Principles ESG Exchange Traded Fund, which reviews companies based on their carbon exposure, ESG profile and support for Catholic values. The fund manages net assets of approximately $ 77 million.


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