Impact Investing and Catholic Social Teaching Rev S

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Impact Investing and Catholic Social
TeachingRev Séamus P Finn OMI

• Investing for the Poor
• How Impact Investing Can Serve the Common Good in
  the Light of Evangelii Gaudium
• June 2014 Rome

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OUTLINEBackground ConsiderationsA brief
Overview of the TraditionThe Context for the
Growing TraditionImpact Investing Opportunity
and Challenge
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Background Considerations
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• Not to share ones wealth with the poor is to
  steal from them and to take away their
  livelihood. It is not our own goods which we
  hold, but theirs. St John Chrysostom

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• A great torrent rushes in thousands of channels
  through the fertile land. By a thousand different
  paths make your riches reach the homes of the
  poor. Wealth is like water that issues forth from
  the fountain. The greater the frequency with
  which it is drawn, the purer it is, while it
  becomes foul if the fountain becomes unused. St
  Basil the Great

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• This is the rule of most perfect Christianity,
  its most exact definition, its highest point,
  namely, the seeking of the Common Good St John
  Chrysostom

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A brief Overview of the Tradition
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Roots of the Catholic Social Teaching (CST)

• A more equitable access, sharing and
  redistribution of resources and assets that are
  essential for life has long been considered a
  hallmark of the Christian/Catholic tradition.
• Beginning with the scriptures, the church fathers
  and the tradition and in conversation with
  philosophical and legal traditions the Catholic
  Social Teaching has developed a reasonable
  ethical, moral framework that offers guidance to
  believers and men and women of good will.

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Late 19th Century/Industrialization as the Social
Question

• The principle of justice has been the foundation
  from the beginning of the formal CST tradition
  when Pope Leo XIII called for the just and fair
  treatment of workers in terms of wages, safety
  and hours of labor. The context for the
  consideration of these topics in the late 19th
  century was the industrialization process that
  saw thousands of people migrating from their
  familial rural settings to urban factory centers
  of production.

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The 1930s/the Social Questions
In QA Pius XI examined more closely how the
systems of capitalism, socialism and communism
were able to respond to the pressing social
questions while respecting human freedom and
human dignity. It also examined the appropriate
role of government in the guarantee of public
order and the promotion of the common good by
focusing on social justice and subsidiarity
issues.
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Second Vatican Council
The formal documents of the CST tradition from
Pacem in Terris and the Second Vatican Council
through the most recent apostolic exhortation
Evangelii Gaudium of Pope Francis have continue
to build on the priorities that were looked at in
the early years of the tradition however within a
rapidly globalization process within a globally
integrated financial system
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The Context for a Growing Tradition
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The Context for a Growing Tradition
These reflections were within the broader
conversations and concepts like development and
underdevelopment First World, Second World,
Third Word and Fourth World Global North/
Global South and distributive justice.
More recent conversations about sustainable
development have opened up new questions and
debates and called for a reconsideration of the
term development and sustainable development
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In a parallel track beginning in the 1950s and
continuing each decade thereafter the UN has
focused attention on the theme of the divide
between rich and poor, north and south through
Decades of Development perspective. The CST
tradition entered boldly into that conversation
through the encyclical Populorum Progressio, of
Pope Paul VI.
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The effectiveness and efficiency of the transfer
of resources through tranches of aid both
official and unofficial has also been questioned.
In addition more recently, especially after the
financial meltdown, the capacity of the official
sector to sustain their historic levels of aid
has surfaced in numerous jurisdictions as
governments experience serious revenue
constraints in meeting their own budgets.
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Impact Investing Opportunity and Challenge
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The Incubator role of the Church and Faith
Communities and Organizations
Other ideas and mechanisms have been created and
implemented to supplement exiting revenue streams
and to provide alternatives to the purely
aid/charity paradigm concessional credit and
financing schemes as ably demonstrated in the
micro finance and micro credit programs and more
recently impact investing.
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The micro finance and micro credit programs as
well as social investment funds that operated at
a concessional rate of return to investors have
made major contributions to human wellbeing and
growth in different communities across the world.
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• Impact investing, the most recent arrival on the
  horizon has been born out of the aspiration of
  investors to put their assets to work to promote
  growth and development in certain sectors of
  economies while not losing capital or sacrificing
  return.
• Sometimes this exposes the tension that exists
  between the more prophetic social justice
  communities and those responsibility for temporal
  affairs

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• Opportunities
• Sub Sahartan Africa
• Private Equity investment in sub Saharan Africa
  increased 43 to 1.6 billion in 2013 from the
  previous year according to Emerging Markets
  Private Equity Association.
• Investors are attracted by fast economic growth
  in some countries on the continent.
• EG. The Ethiopian economy grew by an average
  10.6 a year between 2004 and 2012 according to
  the World Bank

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Challenges Reputational Risk Partners Investing
in development Precautionary Principle Glocaliza
tion