Responsible Investing


ROTOP
Constantia, South Africa
27 August 2014

Colin Habberton
Some Personal Questions…

•  Do you care about what you drink, eat and wear and
how it all was produced?
•  Do you think about the role you could play in addressing
the challenges the world faces, with the money you
spend? 
•  Do you know where your money is invested? Particularly
your retirement savings and/or pension fund?
•  Would you make different decisions about your
investments if you found that they are not in line with
your personal values?
A (Very Brief) Introduction 


Responsible Investing - The Market View
•  Revisiting the mantra of maximising financial return
Accountability to ‘ESG’ Considerations:
•  Environmental – The Planet
•  Social – The People on it
•  Governance – Ethics & Values in Practice
Qualitative Finance – The Academic View
•  Mixing Morals and Money? (Viviers, S. 2014)
Value-based Investing?

Market Capitalisation of the JSE: Top 12 (ZAR)

1 BAT 
 
 
 
1,274,560,223,362 
 (Tobacco) 
2 SABMILLER
 
986,401,371,740 
 
 
(Alcohol) 
3 GLENCORE 
 
866,415,956,656 
 
 
(Mining) 
4 BILLITON 
 
740,508,687,629 
 
 
(Mining) 
5 NASPERS 
 
575,926,861,620 
 (Media & Tech)
6 RICHEMONT 
536,511,600,000 
 (Luxury Goods) 
7 MTN 
 
 
 
449,173,693,212 
 
 (Telecoms) 
8 SASOL 
 
 
403,002,678,540 
 
 (Oil & Gas) 
9 ANGLO 
 
 
388,583,748,403 
 
 
(Mining) 
10 FIRSTRAND 
245,927,016,474 
 
 (Banking) 
11 STD BANK
 
224,131,965,867 
 
 (Banking) 
12 VODACOM 
193,434,020,000 (Telecoms)
Responsible Investing – A Biblical View 


Responsibility
•  What are we responsible for?
Investment
•  Why do we invest?
•  How should we invest?
•  What should we invest in?

Some Disclaimers…
Investing – What does the Bible say?

A Few Principles
•  “Wealth gained hastily will dwindle, but whoever gathers
little by little will increase it.” (Proverbs 13:11)
•  “The plans of the diligent lead surely to abundance, but
everyone who is hasty comes only to poverty.” (Proverbs
21:5)
•  “Take no part in the unfruitful deeds of darkness, but
instead expose them.” (Ephesians 5:11)
•  “And you shall not covet…” (Deuteronomy 5:21)
Investing – Practical Realities

Difficult Choices…

•  Values-based Investing
-  Be aware about where your money is invested
•  High Return Investments
- Don’t be fooled, be diligent, apply discretion 
•  Risk & Reward
- Inheritance for your children’s children (Proverbs 13:22)
- Obtain wise counsel (Proverbs 15:22; 19:20)
- Seek wisdom (Proverbs 8:11; Ecclesiastes 9:17)
(Source: Money, Possessions & Eternity – Randy Alcorn)
Matthew 22:34-40 (ESV)

The Great Commandment 

“34 But when the Pharisees heard that he had silenced the
Sadducees, they gathered together. 35 And one of them, a
lawyer, asked him a question to test him. 36 “Teacher,
which is the great commandment in the Law?” 37 And he
said to him, “You shall love the Lord your God with all your
heart and with all your soul and with all your mind. 38 This
is the great and first commandment. 39 And a second is
like it: You shall love your neighbor as yourself. 40 On these
two commandments depend all the Law and the
Prophets.”
Relationships are our primary Responsibility

Love for God
•  Emotion, Strength, Spirit & Reason
Love for (All) Others
•  …as Yourself
Love as Jesus and our Father loves us (John 13:34; 15:12)
•  Sacrifice, Treasured Possessions, Heirs to the Kingdom

People are our Lord’s Priority and should be ours too
Source: New Yorker/Piketty, 2014
Source: New Yorker/Piketty, 2014
What about the Planet?
Theology of Stewardship

“Be fruitful and multiply and fill the earth and subdue it, have
dominion over…every living thing.” (Genesis 1:28)

"The earth is the Lord's, and everything in it, the world, and
all who live in it." (Psalm 24:1) 

"To the Lord your God belong the heavens, even the highest
heavens, the earth and everything in it." (Deuteronomy 10:14) 

"The land must not be sold permanently, because the land is
mine and you are but aliens and my tenants." (Leviticus 25:23) 

"Who has a claim against me that I must pay? Everything
under heaven belongs to me." (Job 41:11)
Matthew 25:14-20 (ESV)

The Parable of the Talents
14 “For it will be like a man going on a journey, who called
his servants and entrusted to them his property. 15 To one he
gave five talents, to another two, to another one, to each
according to his ability. Then he went away. 16 He who had
received the five talents went at once and traded with them,
and he made five talents more. 17 So also he who had the
two talents made two talents more. 18 But he who had
received the one talent went and dug in the ground and hid
his master's money. 19 Now after a long time the master of
those servants came and settled accounts with them. 20 And
he who had received the five talents came forward, bringing
five talents more, saying, ‘Master, you delivered to me five
talents; here I have made five talents more.’
Matthew 25:21-25 (ESV)

The Parable of the Talents cont.
21 His master said to him, ‘Well done, good and faithful
servant. You have been faithful over a little; I will set you
over much. Enter into the joy of your master.’ 22 And he
also who had the two talents came forward, saying,
‘Master, you delivered to me two talents; here I have made
two talents more.’ 23 His master said to him, ‘Well done,
good and faithful servant. You have been faithful over a
little; I will set you over much. Enter into the joy of your
master.’ 24 He also who had received the one talent came
forward, saying, ‘Master, I knew you to be a hard man,
reaping where you did not sow, and gathering where you
scattered no seed, 25 so I was afraid, and I went and hid
your talent in the ground. Here you have what is yours.’
Matthew 25:26-30 (ESV)

The Parable of the Talents cont
26 But his master answered him, ‘You wicked and slothful
servant! You knew that I reap where I have not sown and
gather where I scattered no seed? 27 Then you ought to
have invested my money with the bankers, and at my
coming I should have received what was my own with
interest. 28 So take the talent from him and give it to him
who has the ten talents. 29 For to everyone who has will
more be given, and he will have an abundance. But from
the one who has not, even what he has will be taken away.
30 And cast the worthless servant into the outer darkness.
In that place there will be weeping and gnashing of teeth.’
The Parable of the Talents

Time
•  What is more precious than gold but cannot be bought,
earned, or saved?
Talent
•  20 Years Wages – skills, expertise, resources
Treasure
•  Where does your heart lie? Return vs. Relationships?
Matthew 25: 31-36

The Final Judgement

31 “When the Son of Man comes in his glory, and all the
angels with him, then he will sit on his glorious throne.
32 Before him will be gathered all the nations, and he will
separate people one from another as a shepherd separates
the sheep from the goats. 33 And he will place the sheep
on his right, but the goats on the left. 34 Then the King will
say to those on his right, ‘Come, you who are blessed by
my Father, inherit the kingdom prepared for you from the
foundation of the world. 35 For I was hungry and you gave
me food, I was thirsty and you gave me drink, I was a
stranger and you welcomed me, 36 I was naked and you
clothed me, I was sick and you visited me, I was in prison
and you came to me.
Matthew 25: 37-43

The Final Judgement cont. 
37 Then the righteous will answer him, saying, ‘Lord, when
did we see you hungry and feed you, or thirsty and give you
drink? 38 And when did we see you a stranger and welcome
you, or naked and clothe you? 39 And when did we see you
sick or in prison and visit you?’ 40 And the King will answer
them, ‘Truly, I say to you, as you did it to one of the least of
these my brothers, you did it to me.’
41 “Then he will say to those on his left, ‘Depart from me,
you cursed, into the eternal fire prepared for the devil and his
angels. 42 For I was hungry and you gave me no food, I was
thirsty and you gave me no drink, 43 I was a stranger and
you did not welcome me, naked and you did not clothe me,
sick and in prison and you did not visit me.’
Responsible Investing is Relational

Some Guidelines for Action

Diligence, Wisdom, Patience, Intention, Care

1.  Reward for Responsibility
2.  Involvement with Investment
3.  Profit from Participation

(Source: Michael Schluter: Relationships Foundation)
Genesis 1:1-4 (ESV)

The Creation of the World

“In the beginning, God created the heavens and the earth.
2 The earth was without form and void, and darkness was
over the face of the deep. And the Spirit of God was
hovering over the face of the waters. 3 And God said, “Let
there be light,” and there was light. 4 And God saw that the
light was good…”
John 1:1-5 (ESV)

The Word made Flesh

“In the beginning was the Word, and the Word was with
God, and the Word was God. 2 He was in the beginning
with God. 3 All things were made through him, and without
him was not any thing made that was made. 4 In him was
life, and the life was the light of men. 5 The light shines in
the darkness, and the darkness has not overcome it..”
John 3:16,17 (ESV)

For God so Loved the World

“For God so loved the world, that he gave his only Son,
that whoever believes in him should not perish but have
eternal life. 17 For God did not send his Son into the world
to condemn the world, but in order that the world might be
saved through him…”
1 Corinthians 7:17-23 (ESV)

Live as You are Called

“17 Only let each person lead the life that the Lord has
assigned to him, and to which God has called him…22 For
he who was called in the Lord as a bondservant is a
freedman of the Lord. Likewise he who was free when
called is a bondservant of Christ. 23 You were bought with
a price; do not become bondservants of men. ”
Responsible Investing



Colin Habberton

colin.habberton@relativ.co.za
@relatomics

Responsible Investing - A Biblical View

  • 1.
    Responsible Investing ROTOP Constantia, SouthAfrica 27 August 2014 Colin Habberton
  • 2.
    Some Personal Questions… • Do you care about what you drink, eat and wear and how it all was produced? •  Do you think about the role you could play in addressing the challenges the world faces, with the money you spend? •  Do you know where your money is invested? Particularly your retirement savings and/or pension fund? •  Would you make different decisions about your investments if you found that they are not in line with your personal values?
  • 3.
    A (Very Brief)Introduction Responsible Investing - The Market View •  Revisiting the mantra of maximising financial return Accountability to ‘ESG’ Considerations: •  Environmental – The Planet •  Social – The People on it •  Governance – Ethics & Values in Practice Qualitative Finance – The Academic View •  Mixing Morals and Money? (Viviers, S. 2014)
  • 7.
    Value-based Investing? Market Capitalisationof the JSE: Top 12 (ZAR) 1 BAT 1,274,560,223,362 (Tobacco) 2 SABMILLER 986,401,371,740 (Alcohol) 3 GLENCORE 866,415,956,656 (Mining) 4 BILLITON 740,508,687,629 (Mining) 5 NASPERS 575,926,861,620 (Media & Tech) 6 RICHEMONT 536,511,600,000 (Luxury Goods) 7 MTN 449,173,693,212 (Telecoms) 8 SASOL 403,002,678,540 (Oil & Gas) 9 ANGLO 388,583,748,403 (Mining) 10 FIRSTRAND 245,927,016,474 (Banking) 11 STD BANK 224,131,965,867 (Banking) 12 VODACOM 193,434,020,000 (Telecoms)
  • 8.
    Responsible Investing –A Biblical View Responsibility •  What are we responsible for? Investment •  Why do we invest? •  How should we invest? •  What should we invest in? Some Disclaimers…
  • 10.
    Investing – Whatdoes the Bible say? A Few Principles •  “Wealth gained hastily will dwindle, but whoever gathers little by little will increase it.” (Proverbs 13:11) •  “The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5) •  “Take no part in the unfruitful deeds of darkness, but instead expose them.” (Ephesians 5:11) •  “And you shall not covet…” (Deuteronomy 5:21)
  • 11.
    Investing – PracticalRealities Difficult Choices… •  Values-based Investing -  Be aware about where your money is invested •  High Return Investments - Don’t be fooled, be diligent, apply discretion •  Risk & Reward - Inheritance for your children’s children (Proverbs 13:22) - Obtain wise counsel (Proverbs 15:22; 19:20) - Seek wisdom (Proverbs 8:11; Ecclesiastes 9:17) (Source: Money, Possessions & Eternity – Randy Alcorn)
  • 13.
    Matthew 22:34-40 (ESV) TheGreat Commandment “34 But when the Pharisees heard that he had silenced the Sadducees, they gathered together. 35 And one of them, a lawyer, asked him a question to test him. 36 “Teacher, which is the great commandment in the Law?” 37 And he said to him, “You shall love the Lord your God with all your heart and with all your soul and with all your mind. 38 This is the great and first commandment. 39 And a second is like it: You shall love your neighbor as yourself. 40 On these two commandments depend all the Law and the Prophets.”
  • 14.
    Relationships are ourprimary Responsibility Love for God •  Emotion, Strength, Spirit & Reason Love for (All) Others •  …as Yourself Love as Jesus and our Father loves us (John 13:34; 15:12) •  Sacrifice, Treasured Possessions, Heirs to the Kingdom People are our Lord’s Priority and should be ours too
  • 18.
  • 21.
  • 22.
    What about thePlanet? Theology of Stewardship “Be fruitful and multiply and fill the earth and subdue it, have dominion over…every living thing.” (Genesis 1:28) "The earth is the Lord's, and everything in it, the world, and all who live in it." (Psalm 24:1) "To the Lord your God belong the heavens, even the highest heavens, the earth and everything in it." (Deuteronomy 10:14) "The land must not be sold permanently, because the land is mine and you are but aliens and my tenants." (Leviticus 25:23) "Who has a claim against me that I must pay? Everything under heaven belongs to me." (Job 41:11)
  • 27.
    Matthew 25:14-20 (ESV) TheParable of the Talents 14 “For it will be like a man going on a journey, who called his servants and entrusted to them his property. 15 To one he gave five talents, to another two, to another one, to each according to his ability. Then he went away. 16 He who had received the five talents went at once and traded with them, and he made five talents more. 17 So also he who had the two talents made two talents more. 18 But he who had received the one talent went and dug in the ground and hid his master's money. 19 Now after a long time the master of those servants came and settled accounts with them. 20 And he who had received the five talents came forward, bringing five talents more, saying, ‘Master, you delivered to me five talents; here I have made five talents more.’
  • 28.
    Matthew 25:21-25 (ESV) TheParable of the Talents cont. 21 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 22 And he also who had the two talents came forward, saying, ‘Master, you delivered to me two talents; here I have made two talents more.’ 23 His master said to him, ‘Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master.’ 24 He also who had received the one talent came forward, saying, ‘Master, I knew you to be a hard man, reaping where you did not sow, and gathering where you scattered no seed, 25 so I was afraid, and I went and hid your talent in the ground. Here you have what is yours.’
  • 29.
    Matthew 25:26-30 (ESV) TheParable of the Talents cont 26 But his master answered him, ‘You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed? 27 Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. 28 So take the talent from him and give it to him who has the ten talents. 29 For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away. 30 And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.’
  • 30.
    The Parable ofthe Talents Time •  What is more precious than gold but cannot be bought, earned, or saved? Talent •  20 Years Wages – skills, expertise, resources Treasure •  Where does your heart lie? Return vs. Relationships?
  • 31.
    Matthew 25: 31-36 TheFinal Judgement 31 “When the Son of Man comes in his glory, and all the angels with him, then he will sit on his glorious throne. 32 Before him will be gathered all the nations, and he will separate people one from another as a shepherd separates the sheep from the goats. 33 And he will place the sheep on his right, but the goats on the left. 34 Then the King will say to those on his right, ‘Come, you who are blessed by my Father, inherit the kingdom prepared for you from the foundation of the world. 35 For I was hungry and you gave me food, I was thirsty and you gave me drink, I was a stranger and you welcomed me, 36 I was naked and you clothed me, I was sick and you visited me, I was in prison and you came to me.
  • 32.
    Matthew 25: 37-43 TheFinal Judgement cont. 37 Then the righteous will answer him, saying, ‘Lord, when did we see you hungry and feed you, or thirsty and give you drink? 38 And when did we see you a stranger and welcome you, or naked and clothe you? 39 And when did we see you sick or in prison and visit you?’ 40 And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.’ 41 “Then he will say to those on his left, ‘Depart from me, you cursed, into the eternal fire prepared for the devil and his angels. 42 For I was hungry and you gave me no food, I was thirsty and you gave me no drink, 43 I was a stranger and you did not welcome me, naked and you did not clothe me, sick and in prison and you did not visit me.’
  • 33.
    Responsible Investing isRelational Some Guidelines for Action Diligence, Wisdom, Patience, Intention, Care 1.  Reward for Responsibility 2.  Involvement with Investment 3.  Profit from Participation (Source: Michael Schluter: Relationships Foundation)
  • 36.
    Genesis 1:1-4 (ESV) TheCreation of the World “In the beginning, God created the heavens and the earth. 2 The earth was without form and void, and darkness was over the face of the deep. And the Spirit of God was hovering over the face of the waters. 3 And God said, “Let there be light,” and there was light. 4 And God saw that the light was good…”
  • 38.
    John 1:1-5 (ESV) TheWord made Flesh “In the beginning was the Word, and the Word was with God, and the Word was God. 2 He was in the beginning with God. 3 All things were made through him, and without him was not any thing made that was made. 4 In him was life, and the life was the light of men. 5 The light shines in the darkness, and the darkness has not overcome it..”
  • 40.
    John 3:16,17 (ESV) ForGod so Loved the World “For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life. 17 For God did not send his Son into the world to condemn the world, but in order that the world might be saved through him…”
  • 42.
    1 Corinthians 7:17-23(ESV) Live as You are Called “17 Only let each person lead the life that the Lord has assigned to him, and to which God has called him…22 For he who was called in the Lord as a bondservant is a freedman of the Lord. Likewise he who was free when called is a bondservant of Christ. 23 You were bought with a price; do not become bondservants of men. ”
  • 43.