Quarter 3 2025
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The transformative potential of artificial intelligence (AI), is well known. Less talked about are the ethical concerns raised by its rapid development. Ray Burnell gives us a deeper look into AI and the work with CBIS portfolio companies.
From a high level, what’s the thing you most hope to achieve when you engage with a company concerning AI?
As Pope Leo XIV emphasizes, AI requires moral responsibility and wisdom. It’s important to us that portfolio companies have robust safeguards around developing and deploying AI in their businesses. We’re looking for an AI process that’s thinking about human dignity, care for the most vulnerable, respect for the truth, and
moral accountability.
Our ultimate goal is for a company to operate ethical AI policies and practices aligned with Catholic values.
Can you offer any specifics about what a safeguard might be?
First and foremost, it’s critical that the final moral and life impacting decisions about the use of AI are made by people, not algorithms. In other words, the first AI safeguard is human oversight, not machine.
From there, AI systems must be transparent and, for lack of a better word, explainable. And by that, I mean the system can be audited and corrected for errors. Accountability structures like review boards and enforceable standards must be in place that require clear responsibility for outcomes. In a similar vein, an AI program must have built-in justice and inclusion, which essentially means the removal of bias.
AI design should serve all people. We need to tend to technology as a good shepherd with virtue, care, transparency, and solidarity.
Given today’s environment, we’d have to think privacy is a big thing.
Absolutely. It’s crucial that any AI system protects personal data and an individual’s autonomy. The design must resist any type of surveillance or manipulation. Privacy and freedom are important safeguards.
How can a company that’s large enough to employ AI balance innovation with accountability?
It starts by recognizing respect for human dignity. The goal of an ethically designed AI system should be to enhance and not replace either human work or decision-making. Ethical governance integrates moral and social responsibility into the corporate strategy, but not as an afterthought. It should be upfront. Innovation needs to be accountable to conscience.
Can you give any specifics on the companies you’re engaging with regarding AI and why?
Right now, we’re talking with Samsung, Microsoft, Alphabet, Qualcomm, and Meta, primarily through collective impact coalitions(CIC). Our objective is to improve the companies’ commitments to ethical AI and specifically ask them to implement, to demonstrate, and to publicly disclose their results.
Any successes you can share?
At the CIC’s urging, Samsung has put together a whole new AI strategy team that’s looking at a human rights impact assessment component of the ethical AI framework. Microsoft, meanwhile, just put out its second AI Transparency Report and is working on how to use AI to identify and improve its use to identify exploitation and abuse. Both of these companies handle massive amounts of highly sensitive information.
In total, do you believe AI can affect human dignity and the common good?
Without argument. It’s not at all hyperbolic to suggest that AI can free people. It can free people of drudgery. It can improve health care. It can expand education, it can promote inclusion. There are risks, of course, not least of which is treating people like data points. But in the end, I’m confident AI can really honor people and honor each person’s God-given worth.
Important Information
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.
The securities identified and described do not represent all the securities purchased, sold, or recommended for CRI Funds and CBIS Global Funds. The reader should not assume that an investment in the securities identified was or will be profitable. Visit our website for a complete list of securities offered during the period.
Quarter 2 2025
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A Conversation with Raymond J. Burnell and Keith H. Dokho, Directors, Catholic Responsible Investments
The exploding demand for water has become mainstream news around the world lately. Hasn’t CBIS been engaging with companies in the water usage arena for some time?
Burnell: We identified the business use of water as an engagement priority around three years ago. Church teaching tells us that water is a source of life and an inalienable human right, and we as an asset manager know that water is vital to every company’s sustainability and profitability. In the end, water, even when used for profit, must be treated as a public and common good.
Do you recall CBIS’ first active ownership effort with a portfolio company on water risk issues?
Burnell: Interestingly enough, it was Domino’s Pizza. Most folks aren’t aware that it takes the company nearly 42 gallons of water to make a single slice of pizza. As co-lead on the engagement, we’ve made specific achievements in an effort to help the firm quantify water risks and prioritize risk mitigations. By the end of last year Domino’s Pizza reduced water consumption/discharge from high-risk areas.
We’d have to assume you’ve broadened the list of target companies.
Burnell: We’re engaging with five major companies across distinct industries on the stewardship of water – Domino’s and Molson Coors in food and beverage, Amazon and Microsoft in high tech, and one that might come as a bit of a surprise, Louis Vuitton in apparel. This cross-sector engagement strategy is deliberate and grounded in the belief that businesses with significant water footprints must take responsibility for its sustainable use. All of these portfolio holdings were among 72 companies identified by the Valuing Water Finance Initiatives as having high water footprints.
The volume of current and potential water engagements must be expanding. How’s the CBIS team keeping up?
Burnell: We were fortunate to welcome Keith Dokho to the I&J team recently. Among other things, Keith brings a long history of experience engaging with the corporate world on the water issue and its global impact.
Dokho: I’m excited about the opportunity to work with Ray and the team to help companies drive necessary improvements in water systems. Across my career I’ve seen up close how collaborating and partnering with companies can actually achieve meaningful social and environmental impact.
Are high-tech companies, particularly those operating data centers, garnering an increasing amount of CBIS’ attention?
Burnell: Absolutely. These data centers are among the top consumers of water globally. As co-leaders of the Amazon and Microsoft engagements, we’re targeting these companies’ massive and growing data infrastructure. Amazon Web Services, Amazon’s largest profit center, has constructed over 100 AI-enabled data centers while Microsoft is running around 350 around the world.
As a direct response to our engagement efforts, both firms have committed to becoming “water positive” by 2030, meaning they intend to replenish more water than they consume. Their strategies include improving discharge quality, reusing cooling water, sourcing sustainably, and investing in replenishment programs for local communities.
How serious is the water supply issue?
Dokho: According to the United Nations Environment Programme (UNEP), nearly half the global population will face severe water stress by 2030, when freshwater demand is projected to exceed supply by 40%. The diminishing availability of water, driven in part by industrial misuse, heightens its importance in corporate sustainability. I couldn’t agree more with the outsized effort CBIS is putting into the issue of water sustainability.
What is the overarching goal of your engagement work around the stewardship of water?
Burnell: We’re trying to advance a vision where corporate responsibility and water sustainability are inseparable. Collectively, our water engagement work not only aims to mitigate risk and enhance long-term shareholder value, but it also enhance the availability and quality of freshwater across the supply chain at the same time.
Important Information
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.