Vatican’s new investments policy ensures ethical compliance

The Holy See has issued a new investments policy to ensure that they are ethical, low-risk and in line with the Catholic Church’s social doctrine.

“The new investment policy intends to ensure that investments are aimed at contributing to a more just and sustainable world; preserve the real value of the Holy See’s net worth, generating sufficient return to contribute in a sustainable way to financing its activities; are aligned with the Teachings of the Catholic Church, with specific exclusions of financial investments that contradict its fundamental principles, such as the sanctity of life or the dignity of the human being or the common good.”

The Secretariat for the Economy announced this in a press release published July 19 by the Holy See Press Office.

The policy, which intends to generate a sufficient return to support the financing of the activities of the Holy See but rules out financial operations that are “speculative in nature,” goes into effect September 1.

The Vatican and related entities may not invest in products and technologies related to “pornography and prostitution; gambling; weapons and defence industry; pro-abortion health centers; and laboratories or pharmaceutical companies that manufacture contraceptive products and/or work with embryonic stem cells”, the policy states.

However, sectors which the policy says should be avoided for investment, but are not altogether prohibited, include oil and mining, nuclear energy, and alcoholic beverages.

Single fund for the Holy See

All investments will now have to flow into an ad hoc APSA account at the IOR. The APSA or Administration of the Patrimony of the Apostolic See, manages the real estate assets of the Holy See; and IOR is the Institute for the Works of Religion, commonly called the “Vatican Bank”.

The press release explains that “Curial institutions will have to entrust their financial investments to APSA, transferring their liquidity to invest — or their securities deposited with banks abroad or at the IOR itself — to the APSA account set up at the IOR for this purpose.”

APSA will set up a “single fund for the Holy See in which the investments in the various financial instruments will flow, and will have an account for each institution, processing the reporting and paying the returns.”

This Investment Policy does not allow Vatican departments to invest their funds independently.

Role of the Investment Committee

The press release also refers to the role of the new Investment Committee that was established by Pope Francis’ apostolic constitution on the reformed Roman Curia Praedicate evangelium.

This committee “will carry out — through the APSA — the appropriate consultations aimed at implementing the investment strategy and will evaluate the adequacy of the choices, with particular attention toward the compliance of the investments made with the principles of the Social Doctrine of the Church, as well as with return and risk parameters according to the Investment Policy.”

The committee was part of the response to a financial scandal over the Vatican’s 350-million-euro investment in a London real estate venture. Ten people including a cardinal are on trial for defrauding the Holy See of tens of millions of euros.

It consists of four financial professionals headed by Cardinal Kevin Farrell and is tasked to ensure the ethical nature of the Holy See’s equity investments in line with Praedicate evangelium.

Internal control of the committee’s activities is entrusted to a Compliance Officer appointed by the Prefect of the Secretariat for the Economy.

The Secretariat for the Economy also made public the Statute of the Investment Committee responsible for defining investment.

Click here for Investment Policy.

Click here for Statute Investment Committee.

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