*Article by Itxu Díaz published in National Review on September 18, 2022
Meet a firm that’s investing in companies based on alignment with church teachings.
Capitalism, faithfully followed, would have you making money and maximizing profits. That’s all good. It just so happens that there are many ways to do it, and not all of them are equally good. Perhaps that is why when a Christian feels the call to become an entrepreneur in the nightlife business, he usually ends up opening a pub and not a brothel. Aside from profits, one’s personal preferences, tastes, and often values enter the equation.
Virtue and business — and especially virtue and investing, and especially virtue-signaling and investing — can make for an awkward pairing, and one that sometimes doesn’t work. Environmental, Social, and Governance (ESG) criteria has overtaken the world of corporate finance; it’s a woke whitewash meant to make old Wall Street sharks look like Mother Teresa. ESG is a bit like that rich friend who tells you he is going on a trip to India to live like a pauper for a month and, on his return, while wearing a dhoti kurta incorrectly, tells you that the experience has completely transformed him: Before he was rich, greedy, and selfish, and now he is all those things and completely out of his mind.
ESG includes an amalgam of woke ideas, which almost always coincide with what we might call the Catechism of the Good Postmodern Progressive, which corporations have been forced to adopt in order to maintain their reputation. This overall approach explains a lot: from why the electric company servicing my house insists on notifying me every month of the number of saplings it plants to backfill my carbon footprint to why you see little rainbow flags all over certain multinational hamburger joints.
Whether ESG investing is an appropriate option or not depends on the client, I’m sure. On the other hand, as perceived business opportunities, ESG investments hide a danger. To the extent that you put a bunch of woke beliefs ahead of the goal of making money, you run a certain risk that someone else with fewer burdens and limitations will end up making it instead of you; unless new market policy rules — which I fear will not be long in the making — prevent companies from getting out of the ESG lane.
It is in this context that I have come across a fascinating initiative that comes with a Spanish seal of origin and is in the process of expansion in the United States and elsewhere. It starts with the story of Borja Barragán, a Catholic convert and father of seven children. For years, he worked successfully in entities such as Citigroup, RBS, and Merrill Lynch. In 2014, after completing a master’s degree in family pastoral care at the Pontifical John Paul II Institute, he had an enlightenment of sorts: He lived as a family man Saturday and Sunday but a business shark the rest of the week. He realized that the world of finance, or at least his world, could not continue to live with its back turned to God, as if in material limbo on the margins of the spiritual.
Barragán then went through a process of personal reflection, before resigning from his job at a bank in 2015 and going to Harvard to train in so-called sustainable investments, with the novel idea of applying those same teachings to moral ends. In 2018, he founded the investment company Azvalor Lux SICAV Altum Faith, managed by the Spanish firm Azvalor Asset Management but advised at all times by the company he runs, the Madrid-based Altum Faithful Investing. The company decides which firms can or cannot enter the investment fund, based on their respect for the Social Doctrine of the Church. Red flags, for example, would be a history of donations to abortion organizations or support for laws restricting religious freedom. Altum also leads by example, donating 100 percent of its distributable profits to projects that support evangelization.
On first blush, this might look like ESG for Catholics, or a faith-based alternative to woke capitalism. There are similarities in approach, to be sure, and Altum Faith is not the only firm to explore this idea. Whether the project will succeed where ESG has floundered remains to be seen. But this is also an initiative in a category of its own; Barragán likely would have taken this step even if ESG did not exist, and he is not marketing his operation as any sort of ideological rival.
Introducing God into the world of finance, it should be noted, has two interesting consequences: On the one hand, his project implicitly admits that making money is not a sin. Yes, we know that, but one of the victories of 20th century socialism was to sow suspicion toward enrichment; and no wonder, given that, in the light of history, there is no political movement more stubbornly in love with poverty. On the other hand, the idea of participating in an investment fund that respects Christian values invites us to be consistent with the things we believe. There is a certain sincerity here that — I’ll go out on a limb — is absent among many asset managers striving mindlessly toward ESG.
As far as we know, the Holy Spirit does not infallibly direct the destinies of these investments, or at least not in the way we would like. So, as I pointed out earlier about ESG, the focus on Christian values could indeed overshadow the capitalistic character of this enterprise. However, Barragán tries to impress upon those he counsels that it is possible to make money and to do so in accordance with Christian values. He likes to repeat a phrase: “You don’t have to choose between profitability and integrity.” He is backed by his own track record of success in the industry and an unusual level of transparency in the management of his projects.
A good example of this transparency is the free Altum App, which allows anyone anywhere in the world, before deciding where to invest, to check whether the company is in conflict with the magisterium of the Catholic Church, based on the four pillars audited: the promotion of life, the family, human dignity, and the care and protection of creation. It’s a bit like Tinder but the complete opposite.
A few days ago, in an essay for NRO, Richard Morrison proclaimed the rights of companies to adopt their own management model, whether or not it fits with the wishes of ESG ideologues. Sensing a market demand, perhaps the Altum Faith initiative is doing just that. There are still millions of people more concerned about family and life than about Al Gore’s lectures, and they deserve to have a place to make money while keeping a clear conscience. Christians know this well: God told us that we would receive rewards in the afterlife and to embrace the virtue of poverty, but fortunately, he left nothing written about investment funds.