Follow your Conscience
Thoughtful Christians are faced with challenging dilemmas when investing. On the one hand, they want to be a wise and careful investor, paying attention to risk and returns while attempting to maintain prudent diversification. On the other hand, they don’t want to own an investment backed by a company which makes its profits in activities which are explicitly sinful. How should the believer face these challenges? Does God really care about what I invest in? In this section, I will attempt to offer my thoughts on this challenging topic.
Investing in accordance with your personal convictions is nothing new. Socially Responsible Investing (SRI) is how the world describes the practice of avoiding (boycotting) companies which violate certain commonly held social norms. This could include avoiding companies who are seen as polluting the environment or causing global warming. It could mean not investing in companies who profit from war. The Islamic world has its own version of this called Halal or Sharia-compliant Investing. Within the Christian world, this kind of investment strategy is called Biblically Responsible Investing (BRI).
What is Biblical Responsible Investing (BRI)?
BRI is the practice of avoiding investing in companies whose primary purpose is to promote or profit from activities which are explicitly sinful. Since God determines what is good and what is sinful, we should not invest in anything that profits from sinful activities. The 10 Commandments is a great summary of the moral law of God. Now that sounds simple enough, right? It shouldn’t be too hard to put these principles into practice. Unfortunately, BRI is not as simple as it might appear.
Why is BRI so Hard?
If our only criteria for investing in a company was moral perfection, we would not be able to invest in all. We are all fallen sinful people trying to invest in a fallen and broken world. We invest in companies run by sinners. Biblically Responsible Investing (BRI) is difficult, in part, because there are actually very few companies whose primary mission is to promote sin.
- Black and White Issues – Black and white issues are those issues which are not subject to Christian interpretation because they have already been deemed by God as sin. In all these areas, the Christian conscience is bound to follow clear Biblical teaching and reject such activities as clearly sinful. The following is not meant to be an exhaustive list but should provide a good summary of the majority such activities: pornography, strip clubs, human trafficking, abortion, murder, drunkenness, taking advantage of the poor/defenseless, stealing, promoting illegal activities, extortion and bribery. The reality is that there are very few companies whose primary existence is to promote such activity.
- Grey Issues – Grey areas are those activities where the Bible is less clear about its explicate sinfulness. In such areas, the Christian conscience is free to follow its conviction. An example of such an issue would be Alcohol. The Bible is clear that drunkenness is sin (Prov 23:29-35, Gal 5:21, Eph 5:18, I Tim 3:3) but in other places it encourages consumption in moderation (Gen 27:28, Psa 104:15, Amos 9:14, John 2:10, I Tim 5:23). At the end of the day, we must follow our conscience and not judge others if their conscience leads them to a different conclusion. When it comes to investing, including or excluding companies who provide services or supplies to “grey issues” becomes cumbersome. There is no one size fits all solution.
- How Much Sin – Companies are made up of sinful people and even for the best companies not all their activities are God honoring. How much sin or which sins make a company worth avoiding? There are many companies whose existence is to promote human wellbeing and alleviate suffering. Yet, some of these companies also produce products which are used in abortion procedures. This is clearly troubling and as Christians we should call for the end of these products. If 99% of a company’s work is aligned with the Christian worldview but there is 1% out of alignment, should we avoid it for the 1%? If so, would it also avoid other good products produced by this company? Why or why not?
- Mutual Funds – Another complicating factor is that most investors don’t buy stocks outright. They buy mutual funds. A mutual fund is an investment vehicle which provides its investors diversification by spreading their money over a potentially large group of stocks and/or bonds. The investor doesn’t own the stocks or bonds, the mutual fund does. The investor doesn’t choose which companies to buy or sell, the mutual fund managers do. If an investor looks closely at the holdings of many mutual funds, they may find companies which do not align with their Christian worldview.
- Corporate Subsidiaries – Today, companies may own multiple brands, product lines, and other corporations. This makes it difficult to truly know everything that a given corporation is involved in. For example, Johnson & Johnson owns wonderful brands which many of us use on a regular basis (Tylenol, Band-Aid, and Purell). Did you also know that they make products used in abortions?
How to do BRI: There are several things that you can do to make sure that your investments are aligned with your Biblical values. First, you can own single stocks in only those companies that you believe don’t primarily promote explicitly sinful activities. While this approach has value, there are several challenges that you should be aware of. It is much harder to get adequate diversification when investing in single stocks than it is to invest in mutual funds. Additionally, there may be trading costs that would not be seen in mutual funds. This approach also does not include professional management.
Second, you can invest in services or mutual funds that screen for objectionable companies. It is important to understand how a mutual fund screens for such companies. They will be screening based upon their convictions, not necessarily yours. Some are more focused on avoiding socially objectionable factors such as environmentalism. Know what you’re getting into before you invest in such a fund. There are services offered by some companies and nonprofit organizations which evaluate holdings and recommend changes if they violate certain convictions.
Finally, you could seek the help of a Christian financial advisor who will honor your convictions. I will offer much more advice on this option in the next chapter.
Guidelines for Conscience and Religious Freedom: The final thing I’ll say about investing is that we must not look at BRI as means to earn God’s favor or avoid market losses. BRI does not guarantee a profitable investment experience. Clearly, investing according to Biblical standards pleases God, but there is no amount of good works that we can do to merit God’s favor. Our right standing with God only comes through our faith in the finished work of Jesus Christ who died on the Cross for our sins and rose again from the dead proving he was God.
If your conscience is free then you have the right to invest as you see fit. You must not allow your freedom to be a stumbling block for others. Don’t flaunt your freedom.
If your conscience is not free on a particular issue then you should not invest in that way. For those who are married, you should honor the convictions of the most conservative person. If one spouse feels free to invest in pharmaceutical companies but the other does not, then you don’t invest in pharmaceuticals.
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