Catholic investing today faces a growing challenge: distinguishing between investment approaches that present themselves as ethical, yet lack a solid moral foundation. As ESG criteria become increasingly widespread, many Catholic investors ask a crucial question: Is ESG compatible with faith-based investing, or is there a more coherent alternative rooted in Catholic values in investing?
Faithful Investing emerges precisely as the answer to this concern. While it is often compared to ESG or socially responsible investing, Faithful Investing differs fundamentally in its principles, methodology, and purpose. Understanding this difference is essential for any investor seeking ethical investing, professional rigor, and full coherence with the Social Doctrine of the Church.
What Is ESG Investing and Why Has It Become So Popular?
ESG investing—Environmental, Social, and Governance—has become one of the most widely adopted frameworks within socially responsible investing. Its goal is to evaluate companies based on non-financial factors related to sustainability, social impact, and corporate governance, incorporating these metrics into traditional financial analysis.
From a technical standpoint, ESG aims to identify long-term risks that may affect financial performance. As a result, it has been embraced by large asset managers, institutional investors, and regulators. However, when examined through the lens of Catholic investing, ESG reveals significant ethical shortcomings.
The Ethical Limits of ESG Investing
- Subjectivity and Inconsistency in ESG Criteria
One of the fundamental weaknesses of ESG investing lies in its structural subjectivity. There is no single, universal ESG standard. Each rating agency applies its own methodology, weighting criteria differently and interpreting indicators according to its own framework.
As a consequence, the same company may receive vastly different ESG scores depending on the agency assessing it. For Catholic investors, this lack of consistency undermines the possibility of genuine moral discernment. Catholic responsible investing cannot rest on fluctuating metrics or socially driven interpretations.
- High ESG Scores and Violations of Human Dignity
It is not uncommon to find companies with strong ESG ratings that are simultaneously involved in activities contrary to human dignity—such as funding abortion, engaging in embryo research, promoting ideologies that undermine the family, or tolerating unjust labor practices.
What Is Faithful Investing?
Faithful Investing, also known as faith-based investing, is an investment approach that explicitly integrates the moral principles of the Social Doctrine of the Church into financial decision-making.
Unlike ESG, Faithful Investing acknowledges that investing is never morally neutral. Every investment supports certain business practices and social outcomes. Therefore, Faithful Investing is built on a twofold criterion:
- Excluding companies whose activities contradict Catholic moral teaching
- Promoting the common good through responsible ownership and engagement
In this sense, Faithful Investing represents a form of purposeful investing that aligns capital with faith.
The Social Doctrine of the Church as the Foundation of Faithful Investing
The Social Doctrine of the Church provides the ethical framework underlying Faithful Investing. Rather than offering technical solutions, it proposes enduring moral principles that guide economic activity toward integral human development.
Unchanging Moral Principles vs. Shifting ESG Standards
A defining difference between Faithful Investing and ESG lies in the stability of its criteria. ESG standards evolve with political priorities, cultural trends, and social consensus. In contrast, Faithful Investing is grounded in immutable principles.
Respect for life, human dignity, the family, and the care of creation form the pillars of authentic Catholic investing, offering moral clarity and long-term coherence.
Why ESG Fails Catholic Investors
ESG ultimately fails Catholic investors because it avoids moral judgment. Its purpose is not to discern good from evil, but to assess financial or reputational risk. For Catholic investors, this neutrality is insufficient.
Catholic responsible investing requires avoiding the financing of intrinsically immoral activities—even when they are profitable or socially accepted. For this reason, many Catholic investment advisors and Christian wealth management firms recognize ESG as, at best, a preliminary filter, never a definitive ethical standard.
Professional Investing Tools for Faith-Based Investing
Altum Explorer: A Catholic Stock Screening Tool
Applying Faithful Investing rigorously requires professional investing tools specifically designed for faith-based analysis. Altum Explorer is a Catholic stock screening tool developed to evaluate companies according to Catholic moral principles.
Altum Explorer enables investors to:
- Apply a Catholic stock screener with ethical rigor
- Identify companies incompatible with Catholic teaching
- Build a Catholic investment portfolio
- Identify ethically compliant alternatives
It is a genuine Catholic investing tool serving Catholic investment advisors, institutions, and families seeking coherence without compromising professional standards.
Investing with Coherence: A Moral Responsibility
Ethical investing is not merely about reducing risk—it is about moral responsibility. Money is not an end in itself, but a means at the service of the common good.
Faithful Investing allows Catholic investors to live their faith consistently, including in financial decisions, demonstrating that profitability and moral integrity can reinforce one another
For more Faithful Investing, click here.
