A “Catholic” investment is one that is morally judged as a real act of participation in economic life, aimed at the common good, and that avoids (or sharply limits) choices incompatible with human dignity and the demands of Catholic Social Teaching (CST). In practice, Catholic criteria typically combine (1) discernment of the underlying moral meaning of the investment, (2) screening/exclusion or limitation where there is incompatibility, and (3) positive, responsibility-driven engagement focused on integral human development and creation care. 1 2 3 4

Core doctrinal criteria

1) The investment must serve an ordered moral purpose (not profit alone)

Catholic criteria begin from the claim that the economy and investing are not morally neutral: the Church teaches that economic activity has moral connotations and must be ordered to the purposes God ordained. 3
Accordingly, “confusion between ends and means” must be overcome—i.e., profit cannot be treated as the only or sole objective function of investing. 1

Criterion: If an investment is structured around or strongly serves aims contrary to the common good and the moral law, it cannot be considered “Catholic” merely because it is financially attractive. 1 3

2) The decision to invest is always a moral and cultural choice

The Church explicitly notes that choosing where to place financial resources—in one place rather than another—is a moral and cultural choice. 2

Criterion: Catholic investors evaluate not only return and risk, but also the value-judgment of what the investment projects finance. 2

3) Human dignity and the avoidance of an “economy of exclusion”

CST requires an economic ethic shaped by the dignity of each human person and the common good, and it rejects systems that exclude and discard the weak. 5
Evangelii Gaudium describes exclusion/inattention as a moral failure—contrasting indifference toward human suffering with attention to market movements. 5

Criterion: Investments should be assessed for how they affect persons and communities—especially the vulnerable—so that the investment does not become part of an exclusionary system. 5

Practical Catholic investment criteria (how doctrine is applied)

4) Evaluate the real impacts on persons, communities, climate, and the earth

The Pontifical guidance urges Catholic asset owners to be attentive to “immediate, long-term and collateral impacts” on people, communities, the climate and the earth (“our common home”). 6
This is consistent with Laudato Si’s emphasis that environmental deterioration is tied to human and ethical degradation. 7

Criterion: A Catholic investment policy includes impact assessment across time horizons and collateral effects, not just what is visible in the quarterly results. 6 7

5) Use CST as the governing “lens” (and do not treat ESG as a proxy for CST)

Mensuram Bonam states that the “crux” of faith-based investing is reflecting Catholic identity—its faith and mission—and that ESG is not a proxy for CST. 4

Criterion: The investor’s decision framework must be explicitly grounded in CST norms (human dignity, solidarity, justice, stewardship), even if it uses ESG data as an input. 4

6) Employ discernment when information is incomplete, but avoid moral relativism

Mensuram Bonam notes that determining CST integration can be challenging because information may be incomplete or difficult to validate. Still, this “must not discourage investors” from considering ethical investments within a diversified portfolio, and it encourages discernment in prayer and appropriate caution when uncertainty is morally significant. 8

Criterion: When evidence is unclear, Catholic investors use prayerful discernment and prudential judgment—preferring avoidance of options whose faith-compatibility is doubtful—rather than assuming “no data” means “no moral issue.” 8

Concrete screening / portfolio-policy criteria

7) Exclusion or limitation where there is incompatibility with moral teaching

Mensuram Bonam describes exclusionary screening based on reference values from faith, enabling investors to “avoid ethical contradictions between an investment and the teachings of the Church.” It also indicates that criteria must apply either:

• based on the line of business of an enterprise, or
• based on business practices regardless of the line of business. 4

It also gives examples of evaluation types (e.g., involvement in grave human wrongs such as abortion or pornography; and practices such as child labour or slavery). 4

Criterion: A Catholic policy typically includes exclusion/limitation categories for intrinsically incompatible activities and exploitative or rights-violating practices. 4

8) “Best-in-class” and/or positive impact approaches aligned with integral ecology and Beatitudes-shaped virtues

Mensuram Bonam also describes “best-in-class” (positive ranking) and “enhancement” approaches that assess issuers’ governance and how human relationships are managed (shareholders, employees, customers, regulators, stakeholders, critics, etc.), with “Respect for dignity” as basic. 4
It frames proactive social/environmental impact investing as a faith-aligned commitment to the common good and care for creation, connected to integral ecology themes. 4

Criterion: Where exclusion alone is insufficient, Catholic investing may also require choosing the comparatively more responsible actors—especially those promoting justice, peace, mercy toward relationships impacted by investment, and care for creation—consistent with CST. 4

9) Governance, transparency, and responsible financial architecture matter ethically

The Church’s social teaching treats financial systems as morally evaluable, especially when they detach from their constitutive purpose (serving the real economy and development of people and the human community). 9
It also calls for a normative/regulatory framework ensuring stability and “the greatest transparency” for the benefit of investors. 9
In addition, the Compendium emphasizes a Christian perspective that insists freedom in economic life must be within a strong juridical framework ordered to human freedom in its totality. 10

Criterion: Catholic investors favor issuers and instruments that are assessable, transparent, and governed in a way that respects ethical constraints rather than treating financial ingenuity as morally sufficient by itself. 9 10

10) Institutional accountability and investment governance

Mensuram Bonam stresses that investment governance is crucial and recommends creating an investment committee or specialist advisory structure to evaluate proposals consistently with faith criteria. 6

Criterion: Catholic investors operationalize doctrine through formal policy governance (e.g., committees, documented criteria, consistent review processes). 6

Summary definition

Under Church teaching, “Catholic” investment criteria are those that:

1. Order investing to the common good rather than profit-maximization alone. 1
2. Treat the choice of where to invest as a moral act with value-judgment implications. 2
3. Screen and/or limit opportunities that would involve or materially support grave incompatibilities with Church moral teaching, including exploitative practices. 4
4. Evaluate real, direct and collateral impacts on human dignity, communities, climate, and creation. 6 7
5. Apply CST directly (not “ESG as a stand-in” for CST), with discernment when information is incomplete. 4 8
6. Use accountable investment governance to implement these criteria consistently. 6