INVESTING FOR GOOD

I've just read Amy Domini's book, SOCIALLY RESONSIBLE INVESTING: Making a Difference and Making Money. (Chicago: Dearborn Trade, 2001) As I understand it, investing in a socially responsible way means earning an acceptable return on our money, without hurting other people or damaging our environment.

Within the faith-based world, socially responsible investing (SRI) dates back more than 200 years, with Quaker immigrants arguing against investing in war and the Methodists managing their money using what is known in modern investment lingo as “social screens.”" Sure enough, Domini begins her discussion of the history of SRI referring to John Wesley's 50th sermon, "The Use of Money," based in Luke 16:9. My Methodist friends frequently remind me of one part of that sermon: "Gain all you can, save all you can, and give all you can." 

But I hadn't heard from them about the limits Wesley placed on how to make those gains. Wesley said:

"We cannot, if we love everyone as ourselves, hurt anyone in his substance. We cannot devour the increase of his lands, and perhaps the lands and houses themselves, by gaming, by overgrown [sic] bills ... or by requiring or taking such interest as even the laws of our country forbid. We cannot, consistent with brotherly love, sell our goods below the market price; we cannot study to ruin our neighbour's trade, in order to advance our own; much less can we entice away or receive any of his servants or workmen whom he has need of.

"Neither may we gain by hurting our neighbour in his body. Therefore we may not sell anything which tends to impair health.

"[Nor should we can gain by] hurting our neighbour in his soul by ministering either directly or indirectly, to his unchastity, or intemperance, which certainly none can do, who has any fear of God, or any real desire of pleasing Him. You can read the entire sermon here.

In Islam, similar principles apply, allowing only ethical investing, and moral purchasing. For example, "Investing in businesses that provide goods or services considered contrary to Islamic principles is ... sinful and prohibited." These are not acceptable: Transactions exclude those involving alcohol, pork, gambling, etc. or businesses that produce media such as gossip columns or pornography. See https://en.wikipedia.org/wiki/Islamic_banking#Islamic_equity_funds.

About gambling: Shariah law prohibits contracts which depend on uncertain future events or other speculative transactions. Both concepts involve excessive risk and are supposed to foster uncertainty and fraudulent behavior. One of the world's leading experts on Islamic finance, Sheikh Hussain Hassan, argues the whole crisis in Western banking could have been avoided if these basic sharia principles had been followed. He said: "$600 trillion were wasted on options, futures and derivatives, all gambling. Sharia prohibited these kind of risks 14 centuries back."

"Within the Jewish community," writes Tamar Snyder, "many investors are re-examining their investment portfolios with an eye toward not only financial gains but also social impact." Snyder reminds us that, "One of every $9 under professional financial management in the United States is involved now in socially responsible investing — investments that take into consideration not just the financial but also the social and environmental consequences of investments."

I urge us all to review our investments, to assure that they reflect the faith we profess. I believe we can earn fair returns on our capital while protecting our neighbors (world-wide), developing our communities, and caring for our environments.