Are your congregation’s assets being managed in an ethical and sustainable manner? Discover the international guidelines (“ESG”) for managing your assets in an ethical and sustainable way

Are your congregation’s assets being managed in an ethical and sustainable manner?

Discover the international guidelines (“esg”) for managing your assets in an ethical and sustainable way

Each Congregation holds assets to support its mission and to fund its specific purposes. Generally, the assets include both real and moveable property, and often includes financial instruments.

In that case, the most important question a Congregation must ask itself is: are we managing our assets ethically? Is our approach to management truly sustainable and responsible?



In order to be able to answer these questions, we have to begin with the actual definition of sustainable and responsible investment.

Over the years, various definitions have cropped up:

– first off, we would cite the definition supplied in the European Sustainable Investment Forum, EUROSIF Report:;

– a more succinct definition was given by the Italian Forum for Sustainable Finance (, a member of EUROSIF, according to which sustainable and responsible investment is “An investment strategy focused on the medium to long term which, in assessing businesses and institutions, blends financial analysis with environmental, social, and governance analysis, for the purpose of creating value for shareholders and for society at large”;

– greater detail was then supplied by the UN’s PRI (United Nations’ principles for responsible investments), promulgated in 2005 (



Now that we’ve clarified the concepts underlying “sustainable investment”, we should now move on to examining the factors adopted on an international level and known as ESG, short for Environmental, Social and Governance, elements that we might likewise define as the three facets of ethics. Essentially, these are precisely the elements to be taken into account to determine whether an investment is truly sustainable and responsible.


The following is an overview of the three ESG factors:

  • First ESG element: the environment, which includes the assessment of risks including climate change, CO2 (carbon dioxide) emissions, air and water pollution, the wasting of resources, deforestation, and reliance on fossil fuels;
  • Second ESG element: social welfare, which takes into account respect for human rights, labour standards, and interactions with civil society and the local communities. An investment is therefore “responsible” if it takes into account the conditions in which the business’ employees working, shining a light on occupational safety and health, the fostering of diversity, and proper interpersonal relationships among employees that eschew conflict;
  • Third ESG element: governance, which relates to corporate practices, that is executive-compensation policies, board composition, control procedures, senior-management and company behaviour in terms of legal compliance and professional ethics.



Basing one’s investment decision-making on ESG principles boils down to ruling out investments in industries or market segments that run counter to our conscience and to our ethical principles, such as:

– weapons trafficking;

– trade relating to jewels where local populations are exploited for their mining and extraction;

– child labour;

– gambling;

– illegal trade of any kind, including hides, tusks, and other endangered-animal parts;

– all those practices and trade in any way predicated on illegal, cruel, or immoral practices to the detriment of the environment, humans, or animals.

But there’s more. It means actually avoiding becoming complicit (whether more or less directly) in egregious and irreversible harm to the environment and to the region, in any violation of workers’ or children’s rights. It means understanding that, in the moment one decides to make an investment, one cannot look to financial performance alone. What one must take into account, therefore, is whether the financial return is the fruit of illicit, unlawful, or otherwise unethical means, such as by trampling human rights, harming the environment, or by evading taxes. Not bothering to check whether the companies in which one is investing are grounded in ESG principles can indelibly tarnish our own conscience, making us (to greater or lesser degrees) jointly responsible in the immoral practices implemented by these companies.

For more information, please contact us at: and we will put you in touch with our financial-ethics experts to generate a detailed and accurate view of your specific case.


Avv. Federica Loreti