The laws of the Old Testament profits

Your Money What price the wages of sin? Dido Sandler looks at investment ethics and religious belief

The curtain-raising of the Playboy Channel, adult entertainment care of BSkyB, famously prompted the Methodist Church to sell its shares in the broadcaster. Four Christian women campaigners went further with British Aerospace - they were cleared of causing criminal damage to British Aerospace jets bound for Indonesia. British Aerospace and BSkyB are just two of the many shares avoided by religiously-correct investors. Christians, Muslims, Jews, Hindus and Sikhs all have ethical stances towards how they employ capital, determined by holy texts such as the Bible or the Koran.

Problem areas range from the arms industry, companies involved with pornography or alcohol, usury (money-lending for excessive interest), and companies that have "immodest" advertising.

Within each creed there is a multiplicity of levels of interpretation and observance. Swraj Paul, a leading Hindu businessman who is group chairman of Caparo Industries and who was this week named a life peer, says a Hindu's investment stance follows his own conscience.

Interest in religiously-correct investment is being stimulated by the expanding ethical investment movement. Eiris (Ethical Investment Research Service), which is a leading adviser on the ethics of investments, has Quaker connections. Elsewhere, organisations such as the Central Finance Board of the Methodist Church, the Jewish Association for Business Ethics and the Christian Ethical Investment Group of the General Synod of the Church of England have evolved practical approaches to investment.

Devout Muslims have the greatest problems. Previously, wealthy, devout Muslims were restricted to investments such as leasing finance that complied with Sharia (Islamic) law but offered relatively low returns. Now, according to Mushtak Parker, the editor of the Islamic Banker magazine, there is more choice including Islamically-acceptable stockmarket investment funds and Islamic bonds.

The major prohibition for Islamic investments is usury - the charging of what is deemed to be excessive interest. Robert Fleming's Oasis equity fund, which is regulated by Sharia law, donates an annual sum of 0.56 per cent of funds to charity. The sum purifies Oasis of interest carried by the companies whose shares underly the fund. Adherence to Sharia law is enforced by a Sharia supervisory board, an independent committee of three eminent Fiqh (Islamic jurisprudence) scholars.

Islamic law also has a problem with investments in companies with the slightest involvement in pornography, alcohol and gambling. Newsagents selling top-shelf porn magazines are out. Supermarkets and leisure outlets are banned because they sell drink. Individuals must also reject Western financial services companies such as banks and building societies, because their business activities include the payment and charging of excessive interest. Sharia law also discourages high levels of indebtedness. Companies whose shares Oasis buys are relatively unencumbered by debt.

Rabbi Pinchas Rosenstein, the outgoing director of the Jewish Association for Business Ethics, says Jews and Muslims have fundamentally similar ethical investment concerns. He says business ethics are as important to uphold as rituals such as Kashrut - the laws surrounding food. But, arguably, investment ethics are harder to put into practice.

Alcohol is not a problem for Jews. Ethical Jewish investors would not disqualify companies such as WH Smith that may sell a few sleazy magazines on the top shelf, but would reject firms with a big involvement.

Strictly speaking, usury is prohibited to fellow Jews. If a Jew can also afford to lend interest-free to a non-Jew, then he or she must do so. In practice Jewish-owned banks use a system of "partnership" with their investors and borrowers, which gets both lender and borrower around the religious prohibition.

Rabbi Rosenstein says Jewish investment ethics predate the 1986 Financial Services Act by thousands of years, by insisting that individuals giving financial advice should declare commissions or any other interest in the transaction.

The Old Testament decrees that people should not put a stumbling block before the blind. In other words you should avoid taking advantage of someone else's lack of expertise.

Peter Webster, the executive secretary of Eiris, says that Quakerism is the strictest form of Christianity in terms of investment criteria. Quakers exclude 75 per cent of shares in the London stockmarket. These include companies involved in alcohol, tobacco, oppressive regimes and so on. They also actively seek to invest in positively ethical organisations such as those that work to improve the environment. Mr Webster says Methodists have similar principles but exclude fewer companies. Although it publicly withdrew money invested in BSkyB on account of the Playboy channel, the Methodist Church's Central Finance Board generally prefers the softly, softly approach.

By contrast the Church Commissioners, who invest money for the Church of England, disallow investment in just 12 per cent of companies on ethical grounds. For example, it still invests in GEC, the weapons manufacturer. A ban on investing in Nestle because of its baby milk policies in the third world was in force, but has now been lifted.

Profile, page 4

Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones