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    Sister Nicole Reille, a French Catholic nun who this month celebrates the twentieth anniversary of her campaign to promote “socially responsible” investing, has recently turned her attention to the investment practices of the Vatican. Her goal is to convince the Vatican’s bankers and other Catholic congregations that not only should their investment funds be well managed, but that they should, in her words, “try and improve their ethical behavior.”

    Doubtless, Sister Reille has sparked some healthy soul searching among Europe’s fund managers. But, for all the emphasis on “social responsibility” behind her movement, most ethical investment strategies reflect incoherent thinking about morality. Anyone seriously concerned about the moral life should really worry about the “ethical investment” movement.

    Of course, attention to the morality of investment choices should be welcomed by the Catholic Church, which has always taught that a person’s free choices for the good contribute to his or her fulfillment as a person and ultimately to salvation. Conversely, a poor moral choice fosters spiritual disintegration, possibly leading to eternal separation from God. Pope John Paul II himself stated in his 1991 encyclical, Centesimus Annus, that the choice to invest in one area rather than another is always “a moral and cultural choice.”

    The list of concerns promoted by most ethical investment funds is not especially coherent. They generally refrain, for example, from investing in businesses involved in armaments, tobacco, gambling, pornography, product-testing involving animal experimentation, inhumane farming, mining, and countries with oppressive regimes. The same funds often try to avoid corporations that do not have affirmative action programs. Equally reprehensible, according to many socially responsible investment guidelines, are corporations insufficiently involved in adequate “community involvement.”

    Immediately, this raises problems. What, for example, constitutes “inadequate” community involvement? Concerning affirmative action programs, many perfectly orthodox Catholic theologians have argued that they suffer from several fundamental defects of justice. In other words, objecting to affirmative action does not make you a racist.

    As the Catholic moral theologian Germain Grisez warns “while certain ethical investment vehicles are advertised as ‘socially responsible,’ the notion of socially responsible here may not reflect a judgment conformed to Christian principles.”

    The standard list of ethical investment priorities also suggests that many “socially responsible” criteria have more to do with fashionable causes than with the objective moral life. Apart from pornography, the list reflects little interest in questions of sexual morality. Ethical investment funds rarely, for example, cater to those who believe that marriage is a basic good and that abortion is wrong.

    A high degree of moral and political selectivity is apparent in these organizations. In the 1980s, for example, ethical investment funds invariably listed South Africa as a country to shun. But why did they not also list other countries with regimes at least as oppressive, such as Cuba, Nicaragua, East Germany, Iraq, Zimbabwe, Ethiopia, or Vietnam?

    Investing in so-called socially responsible funds is thus no guarantee that the investment is moral. Naturally, if people want to further particular causes through encouraging us to invest in particular ways, there is little to prevent them from doing so. But one may protest their use of the word “ethical” to describe such investments.

    So how, then, should Catholics and other people of good will think about ethical investment?

    First, they should know that the moral principles that inform and direct their investment decisions are no different from those that should inform and direct other choices. Their investments should be directed by maxims such as the Pauline principle (one should not do evil even if good may come of it) and the Golden Rule (do to others as you would have them do to you).

    Catholics, in particular, should also know that the Church has declared that certain acts are always wrong. Intentions may be noble, people may claim to be acting in good conscience, and circumstances may mitigate personal responsibility. Nonetheless, certain acts (e.g., adultery) are always evil. The negative moral precepts of the Church’s teaching, as Veritatis Splendor  – John Paul II’s 1993 encyclical – reminds us, do not allow for legitimate exception.

    The greater the risk of corrupting ourselves, or of giving others the impression that we have no strong objection to an evil policy or activity, the more serious our reason for refraining from investing in organizations that engage in, or support, any activity that the Church has identified as evil.

    Sister Reille is presently working with financial specialists to formulate ethical investment guidelines she hopes will be used by investors not just at the Vatican, but throughout Europe’s business world. One can only pray that they produce guidelines shaped by authentically Catholic moral wisdom rather than the political correctness that masquerades as moral reflection in much of Europe today.

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    Dr. Samuel Gregg is research director at the Acton Institute. He has written and spoken extensively on questions of political economy, economic history, ethics in finance, and natural law theory. He has an MA from the University of Melbourne, and a Doctor of Philosophy degree in moral philosophy and political economy from the University of Oxford.

    Gregg oversees Acton’s research program and team of scholars and is responsible for oversight of research international programing, including budgeting, management, personnel, publishing, and program development and