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MENSURAM BONAM CONFERENCE RECAP

By: Tony Minopoli

Several months ago, I was invited by Jean-Baptiste de Franssu, the head of the Vatican Bank, to be part of a planning committee for a conference on Mensuram Bonam. This document from the Pontifical Academy of Social Sciences directs those who are agents of a Catholic institution or individual investors to recognize the large role that finance has taken on at every level of human activity. Mensuram Bonam delves into the key point that asset management needs to reflect the gifts from God by serving the common good and focusing on justice and ethical standards. There was a particular emphasis within the document and the conference on investment guidelines and policy statements having clear instructions to systematically incorporate Catholic Social Teaching into these policies and to adjust them periodically to reflect new thinking and teaching.

The conference took place in Rome on November 2nd and 3rd, and it was predominantly attended by dioceses and Catholic asset owners from around the world, representing every continent, except South America. The Mensuram Bonam document is quite lengthy, and we have an excellent summary prepared by Dr. John Grabowski, our moral theologian, and Ordinary Professor of Moral Theology/Ethics at The Catholic University of America, on our website. It can be found here. Investing in the Light of Faith

There were three main outcomes that came from the conference:

First, this document is a call to all Catholics to incorporate Catholic Social Teaching into their investment policy statements and guidelines. This is a greater call than simple negative screening or those companies engaged in activities antithetical to the Catholic faith. This is a call to actively vote proxies and to engage with companies in order to help generate outcomes consistent with Catholic Social Teaching.

The second outcome, which is very interesting from an American perspective, is that climate change is essentially “settled law” in Europe.  They accept climate science and think that the United States needs to get on board because climate risk becomes a financial risk and we need to consider these risks within our guidelines and our portfolios.

Third, and perhaps most important, this conference from its’ very planning was meant to be the start of a movement. In fact, we discussed that we did not want this to be a conference where you learned a few valuable items and then returned to your office to simply move on to the tasks that awaited. Rather, there is a recognition that Mensuram Bonam is asking Catholics to think differently about how we invest. The concept is to significantly incorporate Catholic Social Teaching into our investment activities and to build these principles into our guidelines and our processes. This conference was just the first and the thinking is that there will be more, along with discussion groups, taking place on a regional and a global basis, to consider trading ideas and help educate investors so that we can all more fully invest in a way that honors our faith.

There will be more to come on this, but as we approach the 9th anniversary of the launch of our mutual fund family and continue to have a robust screening process, we are working on refining an improved and effective engagement strategy. Please reach out to us if you want to discuss any of this further.

This commentary has been prepared by Knights of Columbus Asset Advisors (“KoCAA”) for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions and information expressed herein reflect our judgment and are subject to change without notice. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations, and (6) changes in the policies of governments and/or regulatory authorities.

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