St. Peter’s Basilica / / Bohumil Petrik/CNAAccording to a Vatican directive released on Tuesday, the Holy See’s financial holdings cannot conflict with Catholic doctrine.
According to the policy, Vatican investments must “be in accordance with the Catholic Church’s teachings, with specific exclusions for financial investments that conflict with those fundamental principles, such as the sanctity of life, human dignity, or the common good.”
The rules further state that the Holy See and affiliated institutions’ investments should aim to produce a suitable return in a sustainable manner while also making a positive impact on a more just and sustainable world.
The rule, which carries on Pope Francis’ reform of the Vatican’s finances, becomes effective on September 1.
The Holy See’s treasury and sovereign wealth manager, APSA, will handle the investments, and a four-person ethics commission led by Cardinal Kevin Farrell will monitor them.
The Vatican and related organisations are prohibited from investing in goods and technologies that are related to “pornography and prostitution, gambling, the arms and defence industry, pro-abortion health centres, and laboratories or pharmaceutical companies that manufacture contractive products or work with embryonic stem cells,” according to the policy.
Oil and mining, nuclear energy, and alcoholic drinks are among the sectors the policy advises investors to stay away from but which are not specifically forbidden.
Vatican-affiliated organisations will have one year to dispose of current holdings that do not comply with the new regulations.
A Vatican Treasury investment in various pharmaceutical firms that produced the “morning-after pill” was allegedly made with 20 million euros (about $24 million) in April 2021, according to an Italian investigative news show.
The policy states that while evaluating investments, care should be taken to ensure they adhere to the social philosophy of the Catholic Church, which is based on the values of human dignity, the common good, subsidiarity, and solidarity.
Investing that is intended to be speculative or that is part of a speculative strategy is also prohibited under the guidelines, “unless essential for the efficiency of investment transactions or to hedge risk.”
The policy states that choosing one location over another for investment is always a moral and cultural decision.
An oversight committee will authorise investments; it was established last month after nearly two years in the making.
The new monitoring committee, a body established by the Vatican’s new constitution, Praedicate evangelism, was given Cardinal Kevin Farrell’s leadership on June 7.
John J. Zona, chief investment officer of Boston College, Jean Pierre Casey, founder and manager of RegHedge, Giovanni Christian Michael Gay, managing director of Union Investment Privatfonds GmbH, and David Harris, portfolio manager of Skagen Funds, will serve on the committee under the direction of 74-year-old Farrell.
The Irish American cardinal has been in charge of the Vatican’s internal financial choices since 2020, which go against other standards of accountability.
Members of the committee are appointed by Pope Francis for a five-year term with the potential of reappointment, according to the committee statutes, which were released on July 19.
For five years, the committee will run as an experiment.