Usury: on the relative ethical acceptability of…

We might sympathise with the Archbishop of Canterbury’s embarrassment and irritation at (the revelation of) the Church of England’s (in-adherence to its own) investment policies. Except it has been here before. Because this is not the first time the seeming ineptness of its ‘Ethical Investment Advisory Group’ has been exposed.

Two years ago, when the CofE’s News Corporation share holdings became embarrassing, the EIAG engaged in some moral posturing by threatening to offload them. I don’t know whether or not it actually did so; but quite how it calculated the relative ethical worth of that investment beforehand… well, I suppose an understanding requires being present at those meetings.

The EIAG’s ‘About Us’ page previously stated:

‘Ethical investment restrictions apply to companies involved in military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and weekly collected home credit.’

Instigation of review and inquiry now is all very noble bluster. However, wasn’t some sort of reconsideration effected two years ago? Certainly, the above statement now reads subtly different:

‘Ethical investment restrictions apply to companies involved in military products and services, pornography, tobacco, gambling, alcoholic drinks, high interest rate lending and human embryonic cloning.’

And in November 2011, the EIAG published a ‘Statement of Ethical Investment Policy‘, which informed that:

‘The Ethical Investment Advisory Group (EIAG) of the Church of England carries out ethical investment research on behalf of the three national investment bodies of the Church of England…’ (my emphasis in bold)

Which does beg the question that, in failing to recognise its (indirect) attachment to a lending company whose activities it abhors, it has somewhat failed in its remit. Which is actually a better way of viewing this “serious inconsistency”, rather than assuming a deliberately recommended investment opportunity; or deliberate flouting of recommendation against either of which would be scandalously hypocritical, no? Because the Church is surely most concerned with the exploited customers of the companies invested in. Isn’t it? Well:

‘The national Church investment bodies are supportive of companies that seek to develop their businesses successfully and sustainably in the interests of shareholders.’

Shareholders? Why should the interests of those (risk-forgetting) whiners take precedence over those of customers? Particularly when those customers are the shafted, share-less poor to whom the Church supposedly provides pastoral succour.

The EIAG statement goes on to quantify the ‘cut-offs’, above which it deems necessary the washing of its ethical hands of involvement with whichever company. These vary dependent upon the business area, and individual policy documents detail the ‘… Church’s policy and to explain the theology, ethics and reasoning underlying the policies.’ For example:

‘The EIAG recommends against investment in any company, a major part of whose business activity or focus (defined as more than 25% of group turnover) is…[among others]… high interest rate lending…’

The document for ‘High interest rate lending investments policy‘ provides a more thorough (though not unconfusing) explication of what the CofE finds acceptable/unacceptable practice on the part of money lending companies. It states early on (page 1):

‘The EIAG’s intent is that, under this policy, investment should be avoided in specialist consumer finance businesses that may exploit, or over-burden with debt, lower income borrowers.’

Then, after a few Biblical quotes as guidance, and a little theological history, it brings us into the context of the modern economic world, with a (seeming counter-Biblical?) justification of ‘responsible’ lending, before reasoning (page 6 [27]) thus:

‘However, the EIAG’s view is that investment in weekly collected home credit, unsecured short-term lending and pawnbroking is inconsistent with biblical guidance, contemporary theology, and the practice and values of the Church on high interest rate lending and lending to poorer members of society.’

And then (page 7 [29]):

‘It is sometimes said that legal high interest lending is at least better than leaving people at the mercy of illegal loan sharks. This can certainly be the case, but the fact that regulated high interest lending businesses are ‘the lesser of two evils’ does not mean that the businesses are appropriate investments or sources profit for Church investing bodies.’ [sic]

Before concluding (page 9 [44]):

‘The EIAG’s recommendation is that specialist providers of home-collected credit, unsecured short-term loans (‘payday loans’) and pawnbroker loans should be excluded from investment.’

Unless the turnover of that high interest rate lender is less than 25%?

Reports suggest Archbishop Welby’s declaration that tolerability of sin in a complex world is relative, with credit unions lesser than so-called payday lenders, amounts to an irreversible tack. But the EIAG has for at least two years adopted a relativist policy both inter- and intra-sin: as long as the Church does not invest in companies making too much money from whichever sinful enterprise, then that’s ethically tolerable. But if ill-gotten gains exceed EIAG stipulation on accepted proportion of turnover, then investment is recommended against. Which is not wholly in the interests of shareholders. But the Church does have its reputation to uphold.


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