Are you looking to invest your money in ethical companies, while respecting Catholic principles? The IOR — known as the Vatican bank — now offers a tool to guide you.
The Institute for Works of Religion (IOR) announced on Tuesday the launch of two new stock indices: the Morningstar IOR Eurozone Catholic Principles (for companies listed in Europe) and the Morningstar IOR US Catholic Principles (for companies in the United States, in dollars). These indices are “in accordance with Catholic ethical criteria,” says the so-called Vatican bank, which provides banking and investment services to more than 12,000 clients working for the Catholic Church in more than 110 countries.
The two indices or equity benchmarks are being developed in collaboration with Morningstar, an independent financial data provider. According to the institue, both are constructed using the ethical criteria of the Church’s social doctrine. They’re designed to be a benchmark for ethical investments and track the performance of 50 companies – “issuers” – selected as compatible with the teachings of the Church.
In other words, the two new Vatican-made stock market indices measure the investment performance of these large- and mid-cap companies. Among them, the financial press cites Amazon, Meta, Tesla, Apple, JPMorgan, Deutsche Telekom, Banco Santander, UniCredit, and Allianz, according to Business Insider.
How were these companies chosen? The IOR applied ethical filters inspired by Catholic principles. When contacted by Aleteia, the Institute explained that it analyzes companies according to more than 20 themes, listing criteria such as: “abortion techniques, contraception, stem cells, controversial weapons, small arms, military supplies, coal, oil and derivatives, animal protection, addictions such as gambling, and the fight against money laundering and terrorism.”
A careful examination of “Catholic-compatible” criteria
“More than 200 data points, i.e., analytical data regularly updated by industry specialists with professionalism and rigor, are taken into consideration,” explain spokespeople for the Vatican bank. For “doubtful cases,” the IOR conducts a thorough review. The institute repeats the evaluation of companies on a quarterly basis, and updates the list. “In the event of significant events, the update is carried out immediately,” the institute states.
Through these “Catholic-compatible” stock market indices, the IOR states in its official press release, it intends to promote “responsible, transparent finance.” Robert Edwards, managing director of indices for EMEA & ESG on Morningstar’s ESG and European-based Index initiatives, supports the merits of this initiative, noting that “investors increasingly seek benchmarks that reflect specific values-based or policy-driven criteria.”
This is a huge undertaking, according to a source close to the matter, prior to the official launch of the indices. They emphasized the need for constant updating: “A company may be eligible at a given moment in time but no longer be eligible at a later date. It requires ongoing analysis of companies.” But what matters to Vatican bankers is “creating a movement, a cultural awareness.”
“Financial markets can be a channel for transforming businesses, and therefore society,” according to sources within the Vatican.
