Developing an SRI Policy
The Church offers fiduciaries considerable flexibility in how they apply Catholic social teaching to the creation of an SRI policy. Fortunately, there is plenty of help available, and those responsible for developing and implementing an SRI policy can draw upon the decades-long experience of other Catholic investors, along with guidelines developed by the U.S. Conference of Catholic Bishops. The following outlines the key steps to creating a customized SRI policy.
- Step 1: Determine Core Values
- Core values are those that are most critical to the organization’s mission. These values do not change over time. They are central to the identity of the institution.
- Step 2: Prioritize Issues
- Considerations should be given to how core values relate to individual companies, where opportunities exist to speak these values and what resources are available to address these issues.
- Step 3: Define Conduct
- What types of corporate conduct raise concerns for the organization? Organizations must distinguish between conduct that may be amenable to change and conduct that so violates core values the institution would prefer not to profit from it.
- Step 4: Determine Resources
- Since internal resources are often limited, it is important to note that there are a number of practical alternatives available to organizations. These include vendors who can implement screens and proxy voting, as well as SRI managers—including CBIS—that offer bundled services that allow even small organizations to implement an effective SRI policy.
- Step 5: Communicate Clearly
- Asset managers need to receive specific instructions for policy compliance, including regular communication so that once policies are put in place investors can monitor implementation.
- Step 6: Review and Revise
- SRI is an ongoing process of reflection and action. All organizations implementing new SRI policies should periodically review and revise covenants to ensure they are up-to-date.