Did you know there are an estimated 50 million slaves in the world today?
Would you like to be a modern-day abolitionist?
[Click here to listen to the FaithFi (Moneywise Radio) interview based on this article.]
One of the most beloved and theologically rich Christmas carols is “O Holy Night.” The powerful lyrics of the 3rd stanza boldly proclaim:
Chains shall he break for the slave is our brother And in His name all oppression shall cease
What if this isn’t just a nice thought we contemplate at Christmas time, but an invitation for us as Christian investors and ambassadors of God’s kingdom to actively take a stand for justice in the way we position our investment portfolios?
This year marked the launch of a ground-breaking, faith-based venture capital fund that specifically seeks to invest in high potential, for-profit, start-up companies that are tackling the issue of modern-day slavery. Even just a few years ago, this concept would have sounded like a pipe dream, but the innovation and creativity within the faith driven investing movement is accelerating quickly. Here’s why we desperately need this type of creative solution.
According to International Justice Mission, an estimated 50 million people are held in slavery today.
And sadly, they indirectly work for me and you…because of our shopping and investing patterns. For example, the coffee, chocolate, seafood, and textile industries (among others) are notorious for having slave labor in their supply chains. (To learn more about the connection between your individual lifestyle and slave labor, visit Slaveryfootprint.org and click on “How many slaves work for you? Find out.”)
We like these goods and keep buying them…especially when they’re competitively priced. Or, as investors, we like the profits companies can drive when their goods are competitively priced, so we invest more dollars. Either way, the slave labor keeps the cost of goods low, which consumers like us appreciate, and drives profitability, which investors like us expect. It’s a win-lose supply and demand economic system, where shoppers and investors in developed nations, like us, unknowingly create the demand and criminal middlemen provide the supply of slave labor.
Because we keep buying, the share prices and dividends keep growing. Because the share prices and dividends keep growing, companies with lower labor costs (within their supply chains) often attract the attention of portfolio managers (who are often unaware of the issues) and find their way into our portfolios.
Many of us have no doubt given to wonderful nonprofits that are tackling this issue, like International Justice Mission, or others. But donations alone are not enough. We must change the way we shop and the way we invest.
Human traffickers are 100% in it for the money! Human trafficking, or modern-day slavery is extremely profitable business: International Labor Organization estimated profits of $150 Billion per year as of 2020, and this criminal industry has only grown since then.
But modern slavery is hidden behind the scenes, where we can’t see it, buried in the supply chain where the raw materials are harvested or mined. In fact, it’s estimated that the supply chain currently enslaves more people than at any time in human history.
When we purchase normal, everyday items (like smart phones, coffee, sea food, and clothing) from reputable brands we know and love, or when we invest in those same companies, we may be benefiting from forced labor, even child labor. For example, it’s common to have children working on small coffee farms, exposed to toxic pesticides, and working long days in unsafe conditions.
So, what can Christians do about it?
Well, we’ve already mentioned that we need to change the way we shop and the way we invest. The shopping piece is especially challenging and will need to be a topic for a future conversation, but there are immediate, actionable solutions on the investing side.
You don’t have to go it alone. Asset managers and advisors who are focused on values-aligned investing have tools and products to help you. Databases already exist that track information about labor conditions and supply chain transparency. While customized investment solutions can’t guarantee that there will be zero profit coming from exploitation, applying the available information to an investment screening process is certainly better than turning a blind eye. Let’s focus on the actions we can take right away.
Changing how we invest can be uncomfortable and inconvenient. It requires learning and possibly moving accounts or changing advisors. But choosing to act in love typically is inconvenient! If we are willing to allow ourselves to be slightly inconvenienced, then we can show love for our exploited neighbors across the world by changing how we invest.
Moreover, while slightly inconvenient at the outset, it’s relatively easy to change how we invest. Once your portfolio is updated into a values-aligned strategy (one that screens for human rights and labor rights), it takes very little effort to maintain and may even end up costing less than conventional investing, depending on the solution you use.
As a Financial Advisor, I always encourage clients to invest in alignment with their values because I believe it is in their best interest and a smart way to invest.
The right investment approach for you will depend on your account size and type. For example, the venture capital referenced earlier is only available to accredited investors (generally those with over $1MM to invest) who have a high degree of risk capacity. There are also customizable, direct indexing solutions (typically available at $250k+) and morally screened mutual fund or ETF solutions that are accessible to investors of nearly any size.
Investing that aligns with our faith and values often includes, at a minimum, avoiding investments in certain industries. We provide clients a menu of both positive themes in which they may want to intentionally invest (like affordable housing or clean energy) and negative themes they may want to avoid (like abortion or tobacco) so they can let us know which ones are most important to them.
Not surprisingly, some of the issues our clients most frequently wish to eliminate from their portfolios include human rights and labor rights violations. At our firm, we help them balance their desired financial outcomes with their values, and we’re not alone. There are a number of Christian advisors who are knowledgeable in this space and equipped to help their clients avoid profiting from slavery and that number is growing.
The bottom line is this: slavery is highly profitable, but it’s not the kind of profit we want. When we join forces with heaven and our Christian brothers and sisters around the world through intentional investing, we can help break chains and cause oppression to cease.
Let me close with Isaiah 61:1.
The Spirit of the Sovereign Lord is on me, because the Lord has anointed me to proclaim good news to the poor. He has sent me to bind up the brokenhearted, to proclaim freedom for the captives and release from darkness for the prisoners.
Learn more about investing in alignment with your values at Wealth Squared.