First stock index according to values and principles of Christian

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First stock index according to values and principles of Christian

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The 533 companies selected for the faith-based list include oil giant Shell – previously sanctioned with a $120m (€90.2m) fine for market abuse and deceiving investors about the level of its fuel reserves.

Available in price and net return versions, and calculated in euros and US dollars, the STOXX Europe Christian Index is a new benchmark among all stocks in the STOXX Europe 600 Index set up by STOXX, a global index provider.

“With the launch of the STOXX Europe Christian Index, STOXX acknowledges the growing number of Christian market participants who wish to invest in accordance with their religious beliefs,” said Hartmut Graf, chief executive officer of STOXX Ltd, while expressing the motive behind the move.

Cash has always been a thorny subject for the devout. How can one be rich and pious? There can’t be too many Christian bankers who are unaware that, according to Christ, camels have a better chance of passing through the eye of a needle than bankers do of getting into heaven. Yet the wealthy may be able to sleep more soundly following the creation this week of Europe’s first “Christian equity index”. The Stoxx Europe Christian Index is the brainchild of a German investment firm that has spotted a gap in the market to provide a list of companies that the faithful can happily invest in without feeling like they are sinning at the same time.

Using a committee of ethicists and theologians, the company has drawn up a list of 533 European companies that can be described as working “according to the values and principles of the Christian religion”. It won’t say which companies it considered too sinful to invest in, but it has said that any firm benefiting from gambling, pornography, weapons, tobacco and birth control is out.

Those that have been given the all clear (the index will only release its Top 10 to the public) include some of the largest companies in Europe – a number of whom have controversial environmental track records. Mining and oil giants such as Rio Tinto, BP and Royal Dutch Shell – all of whom have been accused by environmentalists of being major polluters – have been approved as ethically Christian companies alongside other multinational giants including Nestlé, HSBC and Siemens.

The prohibition on companies that make profits from contraceptives hasn’t stopped the index clearing GlaxoSmithKline, which markets two birth-control pills – Elogen and Zerogen – in India. But finding a perfect Christian company that offers decent returns is anything but easy.

“It’s definitely a challenge and rarely black-and-white,” says Edward Mason, secretary to the Church of England’s Ethical Investment Advisory Group. “When you look at ethical investing, there are all sorts of shades of grey that need to be taken into account. The key is to draw some sort of line and once that line is crossed, that’s when you do something.”

The Church of England drew such a line earlier this year when it disinvested in Vedanta Resources, a FTSE 100 mining company that is building a controversial bauxite mine and alumina refinery in the Indian state of Orissa. The construction work has been strongly criticized by both human rights groups and environmentalists. So much so that in February the Church said it would sell its £2.5m in Vedanta shares because Vedanta had not shown “the level of respect for human rights” it expects.

John Hayward of the Jubilee Centre, a Christian-based social reform organization that specializes in the ethics of money and debt, is less than impressed by Stoxx’s approach to ethical investment.

“In advising which companies to invest in, they seem to have concentrated on the negatives rather than looking for positives,” he said. “The negatives are a helpful start for people, but surely it would be better to use positive ethical attributes to encourage people – be they Christian or not – to put their money into companies that are actively seeking to improve people’s lives?”

That Christians are increasingly looking to invest ethically is hardly surprising given that religious leaders, including the Archbishop of York John Sentamu, led ferocious ideological attacks on the global banking system following its near-collapse two years ago.

Islamic financing, which pioneered ethical investments funds that don’t compromise the beliefs of its investors, has also provided a blueprint for Christians to work with.

“I think Muslims have encouraged Christians to care more deeply about economic issues,” said Paul Woolley, director of the Theos Christian think-tank. “Something like high interest rates have become a major issue for Christians precisely because Muslims put that at the forefront of their own agenda.”

Christians were also encouraging thoughtful business dealings long before socially responsible investment (SRI) funds became a standard feature of financing in the late 1990s. Christian-led opposition to the slave movement could be seen as the first example of a socially responsible investment protest. John Wesley, the founder of Methodism, devoted reams of sermons on ethical business practices. His advice was to shy away from aggressive expansion that might hurt a rival and told his followers to avoid industries which harmed the health of ordinary workers. One wonders what he would make of today’s market leaders.

The demand for ethical funds, has grown in recent years because of rising worries about the environment and unease over how some financial institutions have made money in the aftermath of the subprime crisis.

There have also been a number of sharia compliant indices created. These indices allow funds to invest in stocks that are compliant with Islamic law.