Investing is about human activity in this world. This is incontrovertible. And so this must be said at the outset, for it constitutes the first premise of responsible investment.

I am sometimes told by economists that I should avoid touching on the economy in my speeches because I don’t understand anything about it. They are right to point out that I am no specialist. I cannot even use the correct language. But this is no reason to shut down a shared debate with the outside world. It would be no less disastrous to exclude non-theologians from religious debate. The world is a single entity, and in reality there are no distinct or independent spheres of life. I don’t believe that the economy and capital can be treated as a self-regulating and self-sufficient machine, whose impetus is based on human greed and the quest for profit. If this were so, its relationship with other areas of life would be restricted to the profit the machine provided when run efficiently by professionals. This would be untenable. The economic area of life is part of everything it means for a human being to be alive, and the conditions on which life in its fullness depends.

No less untenable is the demand that all other aspects of life and activity work to the pistons of the machine and adapt to its requirements. The investment world is but a part of the economy, which is the prerequisite for a good life, but it does not constitute its content, and certainly not its meaning and purpose. The economy is a means, not the end and purpose in themselves.

It must therefore be acknowledged that investment is a human activity like all others. Of course, it needs professional expertise. We need to understand the world: to have a sense of how its machinery works and an ability to operate within it. The basic principle of responsible investment is that the economy is an integral part of life, and that responsible work for the sustaining of life belongs to what it is to be human, and is connected to life’s fundamental conditions.

The Golden Rule

These fundamental conditions for all human life are best expressed in what we call the Golden Rule. In St Matthew’s Gospel Jesus crystallizes this as follows: “In everything do to others as you would have them do to you.” In slightly differing forms the Golden Rule is to be found in various religions and philosophies. It is an expression of humanity’s shared sense of how a good life may be realized.

In the light of the Golden Rule it is clear that human life cannot be reduced to the effective pursuit of profit. Life is fulfilled only in a relationship of reciprocity with others. Luther reminds merchants that their trade is part of a mutually dependent relationship with their neighbour. And today we might add: and with creation.

In light of the Golden Rule moral action is at its core based on placing oneself in one’s neighbour’s shoes, not on any compliance with given norms. Because I am a human being, I can understand something of what constitutes the needs of other human beings, and I can understand something of what sustains and what destroys life. When operating in a global context, as those who work in the sphere of investment do, it is especially important to ask who the people or groups are that are affected by my actions, and what constitutes their true needs.

When you work in the investment world you do so above all as human beings created by God: you are nothing less, nothing more. No one lives only for themselves. You are entirely human all the time: you are not just profit-calculating professionals, but human beings who love and hate, believe and doubt, rejoice and grieve, see the world through the neighbour’s eye, succeed and fail. As human beings you bear a human responsibility. In this world this involves contradiction and a sense of incompleteness. It involves confusion and difficulty in adopting the right solutions. It is part of what it is to be human.

This is indeed why responsible investment does not come about through someone defining norms from on high that need only be followed. No. It comes about precisely when, as we do in this seminar, we ask together: how can we act so that the possibility of a good life can be enhanced, and especially where life is at its most fragile, its weakest, and most downtrodden?

Moderation

When the churches and the Christian tradition have asked themselves how the good life and the reciprocity demanded by the Golden Rule can be attained the answer has always emphasized moderation. In the early church Christians were already saying that people ought to travel lightly.

Over the last two centuries development has seen increased material prosperity for most of humanity. This has been based on the continued growth of the economy and consumption, and the exploitation of the planet’s natural resources. We can’t escape the reality that our entire way of life is its result. This is what makes the call for moderation both especially necessary and at the same time challenging. Moderation is the antithesis of the insatiable quest for profit and of greed. It is my view that the need to come to terms with moderation is an extremely challenging lesson for the global investment world to learn.

Impact assessment

Moderation impinges on how expectations concerning investment returns are set, and requires a recognition that there are limits. In this light the fact that investment involves people begs an assessment of the impact of our actions.

This has been the central guideline for responsible investment. The point is not only that investment activity achieves its intended purpose, but what its overall effect is. For this reason one dimension of responsible investment has been an attempt to rule out investments that are obviously questionable from an ethical perspective like the arms industry. A second dimension is that businesses operating in a responsible manner, and investment goals that place measurable social and environmental change alongside anticipated yields, are favoured.

In the midst of such complexity an impact assessment is not easy. Economic activity spreads like a fungus, making it impossible fully to predict or control. Investment is a human activity in a human world. The world often confronts us with unbearably difficult ethical choices. The search for spotless ethical solutions is often an illusion. We must be content to choose the lesser of two evils.

What we need is a realistic, comprehensive, and probing impact assessment. We have begun to speak of a footprint, especially in relation to climate impacts. In this context the complexity of how footprints develop has become clear. We shall look at an investment impact assessment which, along with the environmental footprint, takes into account two further impacts: the first, we might call the community footprint – the social and cultural impact of investments; and the second, the administrative footprint, which is concerned, for example, with the fiscal responsibility of a targeted investment.

Every human activity leaves a footprint. Its identification is where ethical behaviour begins.

In the real world bearing ethical responsibility requires active involvement as well as assessment. This is effected by our investment portfolio decisions as well as by our assertion of our rights of ownership. This is not only about telling people what to do. It is also about helping businesses and investors chart a course that maintains and defends life instead of destroying it.

Openness and transparency

Sometimes expectations are directed at the churches in particular, both from within and without, that they should meet the ideal, and be seen to act with impeccable ethics. Complying with the world’s daily contradiction and incompleteness is sometimes difficult. We operate in the same world and under the same operating mechanisms as all other investors. Without gracious consent to the incompleteness of what it is to be human, ethical standards become discouraging instead of encouraging.

It is said of the church’s economy that it is a glass-fronted cabinet. That’s a good thing in my opinion. We need to risk openness and transparency precisely because the real picture rather than the ideal must be seen. This is what every actor in the investment world needs. The whole economy should be a glass-fronted cabinet. Only humble honesty is the servant of life.

Involvement in responsible investment and its development serves as an important instrument to influence how this sometimes unbearably challenging, wayward, and unpredictable world can be changed.

By Kari Mäkinen,
Archbishop of Turku and Finland. (Abridged).