On 19 August [2015], the Standard and Poor’s rating agency launched a product entitled “S & P 500 Catholic Values Index”. This event was sometimes perceived as marking the birth of a “Catholic finance”.
What is meant by “Catholic finance”?
In the absence of an official text, reference should be made to the work of the doctrine. The most recent and most accomplished text is the Fundamental Charter of Christian Ethical Finance (the “Charta”). It was published on August 15, 2015, in Paris, by the Christian Finance Observatory (OFCCFO) and drafted by lay financiers, lawyers and European academics. This charter, available in several languages, aims at being a synthesis of the Christian financial practices and principles identified throughout the world. It is also an attempt for international standardization in a context in which the Church supports the moralization of the economy.
According to Article 1 of the Charta, “shall be identified to be part of the field of Christian Ethical Finance, all stakeholders, activities, products, behaviors, concepts and organizations in the banking, financial or insurance sectors, which comply with the Fundamental Principles as set out hereafter”. A summary analysis of these “Fundamental Principles” proves, first of all, that Christian finance is an ethical finance which combines both the criteria of sustainable finance (“SRI finance”) and those of solidarity finance . In addition, it adds other ethical criteria specific to the Christian religion.
“Catholic finance”, for its part, is a subgenre of Christian finance in the same way as “Protestant finance” or the possible “Orthodox finance.” It is characterized by ethical criteria aligned with the social doctrine of the Roman Catholic Church (the “SDC”).
What are the principles of Christian ethical finance?
Christian finance takes over the main objectives of SRI finance: long-termism; protection of biodiversity; defense of fundamental freedoms; good governance. It often merges with solidarity finance and recognizes as virtuous the sharing of income from savings with an association or foundation, and investment in solidarity-based enterprises, in particular to help fragile persons, child reintegration, reintegration of people in difficulty, assistance with education, combating illiteracy, helping the most deprived people, and those with mental or physical disabilities. In addition, and this is its main specificity, Christian finance applies religious ethical criteria. Its founding principles refer, it was suspected, to biblical texts and the doctrine of the Church, as, for example, the virtues of charity, strength, prudence and temperance. Christian ethical finance, as described by the Charta, also claims being ecumenical and inter-religious. It is essentially inclusive, and it is based on free will.
At a more practical level, the Charta distinguishes between positive (virtuous) and negative (non-virtuous) objectives. Are presumed to be positive, for example: the protection of life; the development of “every person and the whole person”. Conversely, are presumed to be negative, for example, all investments favoring the commodification of human beings; the promotion of infidelity; the genetic manipulations on the human body for other than therapeutic purposes.
It should be noted that financial techniques are specifically targeted. Thus, are regarded as non-virtuous inter alia: excessive indebtedness; the use of shell companies and legal mechanisms for the non-accountability of natural persons; the excessive financing of multinationals to the detriment of small enterprises; the speculation that caused financial instability or the breakdown of access to resources. Christian finance frequently presents itself as the antimodel of a certain ultraliberal finance.
As far as Catholic finance is concerned, it is supposed to respect the principles established by the Catholic Church, as for the product of the S & P 500 Catholic Values Index, which claims to comply with the recommendations of the US Conference of Bishops.
Are there Catholic financial actors or products?
There are many Christian and Catholic actors. Germany has more than ten Christian credit institutions, some of them created in the early 20th century. The book “Catholic Finance” (Finance Catholique, EMS, 2013) lists a large number of actors, notably in the United States and England. The phenomenon is globalized.
France knows several operators from the solidarity-based finance presumed to be compatible (“catho-compatible” finance) by the Charter, particularly in the field of microcredit and sharing funds. But the recent months have seen the appearance of several ostensibly Christian entities, for example: Credofunding, the Projets de Rosalie, the fund Proclero or Cèdre finance éthique.
As for OFCCFO, he is working on the emergence of an international secular supervision. It created a label and instituted a rating committee. And it seeks to bring together as many partners as possible to promote the development of a fairer and more humane finance.
(Translated from French. Original article available under the following reference : A. Cuny de la Verryère, “La finance catholique : quels en sont les inspirations et les principes ?, in Recueil Dalloz du 8 octobre 2015).