Investing 101 by 'God'

To address the elephant in the room, I know it is a touchy topic. So here goes my disclaimer: no disrespect to any religions out there. In fact, we'll have to thank religion for giving us the whole realm of socially responsible investment.

We already know that faith is a huge thing for us humans. But did you know that it can also guide one's investment choices?

Socially Responsible investment is in fashion now and people are talking about ESG, impact investment and what not! The origin of socially responsible investment lies in the period of the 1700s, when Quakers, a group of individuals who were part of the Religious Society of Friends, refused to participate in the slave trade. Further, this trend evolved into investors avoiding the "Sin Industries" (tobacco, liquor, and gambling) in the 1960s.

Christianity was the first religion to come up with this idea and gave us the investment approach called Negative screening or Exclusionary approach of investing. Christian Investors started choosing investments that align with their religious beliefs and values and excluded investment in companies that are deemed immoral, such as alcohol, tobacco, and weaponry companies. There are Christian Investment companies and even Christian screened mutual funds to give professional assistance to investors and help them stay on track of 'Biblically Responsible Investing'. These companies help faith-based investors to invest in companies that promote the social and ethical concerns of the church and its teachings while excluding companies that engage in a variety of activities, such as:

• Weaponry

• Addictive behaviour, such as tobacco, alcohol, and gambling

• Adult entertainment

• Embryonic cloning

• High-interest lending

Faith-based investing is not just unique to Christianity. This approach exists in some form or the other in a lot of religions. For example, Islamic or Halal investing also follow an exclusionary approach that prohibits investment activities such as gambling, producing and selling alcohol or pork-based on Sharia Law. There are a variety of mutual funds that adhere to Sharia principles by investing capital in halal investments. Jewish faith-based investing also focuses on a wide range of issues from social to environmental and community-based. Jewish approach is slightly different as it is more on the positive screening side. They choose to invest in certain companies that align with their values and teachings. Torah prohibits the destruction of natural resources and this translates in their investment strategies too as they lean towards investments that address climate change among various other impact priorities like social justice, area-specific issues and providing food to those who need it.

(Quick Fact: Dow Jones has its dedicated faith-based indexes as well, like 'Dow Jones Islamic' Indexes based on shariah or Islamic law and 'Dow Jones Dharma' Indexes based on religious ideas of Hinduism and Buddhism, such as ahimsa and lok-samgraha)

Stay tuned for the Devil's advocate perspective on the same.