I have found that Catholics don’t understand ESG investing and have politicized something apolitical. In this article, I hope to introduce ESG in a Catholic manner. I am writing this because one of the first words that comes to mind when someone mentions ESG is “Woke.”
The term “woke” is often used to describe an individual or group that is aware of and actively concerned with social and political issues, particularly race and social justice. In the context of ESG (Environmental, Social, and Governance), “woke” might refer to individuals or organizations that are particularly focused on social and environmental justice issues and prioritize these considerations in their decision-making.
For example, an individual or organization that prioritizes the rights of marginalized communities, protecting the environment, and promoting good governance could be considered “woke” in the context of ESG. This might involve supporting sustainable and ethical business practices, advocating for policy changes that address social and environmental issues, and engaging in community activism to advance these causes.
Overall, the term “woke” in relation to ESG could be seen as positive or negative depending on one’s perspective. Some might view it as a sign of progress and awareness, while others might see it as divisive or overly political. Ultimately, whether or not ESG is considered “woke” is a matter of individual interpretation.
Is ESG too Woke for Catholics?
It is inaccurate to say that ESG (Environmental, Social, and Governance) is too “woke” for Catholics. Many Catholic individuals and institutions are actively involved in ESG efforts, as these align with the Church’s social teachings on stewardship and responsibility.
The Catholic Church teaches that all creation is a gift from God and that humans have a moral obligation to care for the earth and its inhabitants. This belief is reflected in the Church’s social teachings, which call on individuals and institutions to act in ways that promote the common good and protect the dignity of every person. This includes efforts to protect the environment, promote social justice, and ensure good governance. Therefore, ESG is not too “woke” for Catholics but is in line with the Church’s teachings and values. I will highlight a few in each section.
Pope Benedict XVI said in his encyclical letter Caritas in Veritate,
Charity is at the heart of the Church’s social doctrine. Every responsibility and every commitment spelt out by that doctrine is derived from charity which, according to the teaching of Jesus, is the synthesis of the entire Law (cf. Mt 22:36- 40). It gives real substance to the personal relationship with God and with neighbour; it is the principle not only of micro-relationships (with friends, with family members or within small groups) but also of macro-relationships (social, economic and political ones). 1
Catholic Environmental Concerns
In the realm of environmental stewardship, the Catholic Church advocates for the responsible use of natural resources and the protection of the earth’s ecosystems. This includes efforts to reduce greenhouse gas emissions, combat climate change, preserve biodiversity and protect natural habitats. The Church also supports sustainable agriculture and fishing practices and encourages the use of renewable energy sources.
Pope Francis urges us in his encyclical Laudato Si
This sister now cries out to us because of the harm we have inflicted on her by our irresponsible use and abuse of the goods with which God has endowed her. We have come to see ourselves as her lords and masters, entitled to plunder her at will. The violence present in our hearts, wounded by sin, is also reflected in the symptoms of sickness evident in the soil, in the water, in the air and in all forms of life. This is why the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor; she “groans in travail” (Rom 8:22). We have forgotten that we ourselves are dust of the earth (cf. Gen 2:7); our very bodies are made up of her elements, we breathe her air and we receive life and refreshment from her waters. 2
I know that Pope Francis is a controversial Pope, but I think that he is in line with former Pope Saint John Paul II, who echos a similar sentiment in Centesimus Annus
Equally worrying is the ecological question which accompanies the problem of consumerism and which is closely connected to it. In his desire to have and to enjoy rather than to be and to grow, man consumes the resources of the earth and his own life in an excessive and disordered way. At the root of the senseless destruction of the natural environment lies an anthropological error, which unfortunately is widespread in our day. Man, who discovers his capacity to transform and in a certain sense create the world through his own work, forgets that this is always based on God’s prior and original gift of the things that are. Man thinks that he can make arbitrary use of the earth, subjecting it without restraint to his will, as though it did not have its own requisites and a prior God-given purpose, which man can indeed develop but must not betray. Instead of carrying out his role as a co-operator with God in the work of creation, man sets himself up in place of God and thus ends up provoking a rebellion on the part of nature, which is more tyrannized than governed by him. 3
Catholic Social Justice
In the area of social justice, the Catholic Church promotes the rights and dignity of every person, regardless of their race, ethnicity, gender, or social status. This includes advocating for the poor and marginalized and working to eliminate discrimination and inequality. The Church also supports the right to education, healthcare, and economic opportunities for all people.
As Pope Saint John XXIII says in Pacem in Terris, “
…We must speak of man’s rights. Man has the right to live. He has the right to bodily integrity and to the means necessary for the proper development of life, particularly food, clothing, shelter, medical care, rest, and, finally, the necessary social services. In consequence, he has the right to be looked after in the event of ill health; disability stemming from his work; widowhood; old age; enforced unemployment; or whenever through no fault of his own he is deprived of the means of livelihood. 4
Catholic View on Governance
In terms of governance, the Catholic Church encourages transparency, accountability, and ethical conduct in the management of institutions and organizations. This includes promoting good governance in the public and private sectors and civil society organizations. The Church also advocates for the participation of all members of society in the decision-making processes that affect them.
Pope Leo XIII, who helped launch Catholic Social Teaching with his encyclical Rerum Novarum, taught that
To sum up, then, We may lay it down as a general and lasting law that working men’s associations should be so organized and governed as to furnish the best and most suitable means for attaining what is aimed at, that is to say, for helping each individual member to better his condition to the utmost in body, soul, and property. It is clear that they must pay special and chief attention to the duties of religion and morality, and that social betterment should have this chiefly in view; otherwise they would lose wholly their special character, and end by becoming little better than those societies which take no account whatever of religion. [5]
Catholics can put these principles into practice by investing in companies that align with their values. This is also known as socially responsible investing, and it involves choosing investments that reflect one’s moral and ethical beliefs. For example, a Catholic investor may decide to invest in companies committed to reducing their environmental impact, supporting workers’ rights, and promoting good governance. By doing so, the investor supports companies that align with their values and sends a message to the market about the importance of ESG considerations.
Another way that Catholics can support ESG efforts is by participating in advocacy and activism. These actions can include joining organizations that promote environmental and social justice and engaging in political activism to advance causes that align with Catholic values. One of the ways ESG helps is if you invest in a mutual fund or an ETF. They can engage with companies that provide added leverage in causing corporate change.
Concluding Thoughts
I want to end this post by highlighting this quote from Pope Benedict XVI
Economic activity cannot solve all social problems through the simple application of commercial logic. This needs to be directed towards the pursuit of the common good, for which the political community in particular must also take responsibility. Therefore, it must be borne in mind that grave imbalances are produced when economic action, conceived merely as an engine for wealth creation, is detached from political action, conceived as a means for pursuing justice through redistribution. 6
In conclusion, Catholics can implement their beliefs and work towards a more just and sustainable world through SRI investing and advocacy.