25.08.1999
Ethical guidelines for Lutheran church investments in Finland
Church among first institutions to address investment principlesTURKU, Finland/GENEVA, 25 August 1999 (lwi) – Ethical guidelines have been prepared for investment activities of the Evangelical Lutheran Church of Finland (ELCF) and its parishes in the country.
According to the ELCF Church Information Center, the ethical evaluation of investment in companies is highlighted as part of the investment portfolio of the whole church and its economically independent parishes.
The decision makers for the investment activities are expected to have both economical and ethical expertise and consideration. The guidelines have been prepared by a working group which was led by Bishop Jorma Laulaja from the Lapua diocese.
The 4.5million-member ELCF, representing 86 percent of Finland’s population, is one of the first institutions in the country that have addressed the ethical principles of investment. The guidelines prepared by the church are at the same time an indication of society’s recognition of the ethical questions involved in investments. The discussion about investment principles is expected to continue.
The working group says that the ethics of the Lutheran church do not differ from others. An ethical issue impacts the church just as it does other areas of society. The ELCF is a member of the Lutheran World Federation (LWF).
The Finnish church says that the starting point of the church’s investment activities must be one of broad responsibility for investment ideology. Issues are examined from an ethical perspective throughout the investment process. In a conflict situation, ethical values are given priority to the economical ones in such a manner that one is prepared for less profit to the benefit of lasting moral value. The church must act according to its own principle values.
While the ELCF notes that the goal of the church is to gain sufficient profit from ethically acceptable investment interests, it underlines that the investment interests must be selected in such a way that in addition to profitability, important societal values are enhanced. The church at the same time acknowledges that evaluating the ethical value of businesses is not an easy exercise, especially since the supply networks of multinational corporations are almost impossible to investigate adequately.
The ELCF is concerned that investment activities must favor businesses which take into consideration health issues such as healthy food, product safety, working conditions and the working environment. Attention must also be paid to environmental protection as well as energy conservation.
The Finnish church says society’s responsibilities include social justice, education and training, science, research and culture. From the human rights perspective, it is important that potential business investments respect the equal rights of religion, race and sex, and labor issues and that they refrain from the use of child labor.
Parishes invest in order to maintain their regular activities in the midst of economic turbulence. Funds are also collected for big one-time requirements such as buildings. The main portion of the parishes’ income is generated from taxes which may fluctuate considerably each year. Out of the ELCF’s 587 parishes, more than 180 need support from the church’s central fund in order to provide basic services.
The church’s investment activities revolve around investing the ELCF employees’ pension fund, which currently has over 1.6 billion FIM (USD 290 million). According to pension projections, 13.1 billion FIM (USD 2.4 billion) are needed to cover the commitments for which the pension fund is responsible, leaving a shortfall of about 11.5 billion FIM (USD 2 billion). In 1998 the total funds of the parishes were about 4 billion FIM (USD 727 million).
The working group proposes that the ethical principles of the church’s pension fund investments be annually studied. Proposed changes in the legal framework are decided separately.
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