Rabbi Mark Goldsmith

1
What does Judaism tell us about Responsible
Investing?

• Rabbi Mark Goldsmith
• Movement for Reform Judaism, Shoresh Charitable
  Trust, Executive Cttee 3iG
• June 16th 2009 / 24th Sivan 5769
• London Central Mosque

2
Our textual mandate some examples

• Torah You shall not bring the hire of a
  harlot, or the price of a dog essentially the
  proceeds of gambling, into the house of your
  Eternal God for the payment of any vow for
  these are both abomination to your Eternal God.
  Deuteronomy 2319
• Talmud R. Ilai said By three things may a
  person's character be determined By his cup, by
  his purse and by his anger. Eiruvin 65b
• Rabbinic Authority The Kossover rebbe taught
  that we always need to be conscious of the
  Divine. He was asked, Can we think of God when
  we are engaged in buying and selling? Surely
  you can, the rebbe answered, If we are able to
  think of business when we are praying, we should
  be able to think of praying when we are doing
  business. Q by Rabbi Mordechai Leibling

3
Some First Principles Issues

• Businesses should carry out their activities
  according to appropriate environmental standards
• Midrash Rabbah - Exodus 352
• AND YOU SHALL MAKE THE BOARDS FOR THE
  TABERNACLE OF ACACIA-WOOD STANDING UP (Exodus 26
  15). Why of ACACIA-WOOD? God set an example for
  all time, that when a man is about to build his
  house from a fruit-producing tree, he should be
  reminded If, when the supreme King of kings
  commanded the Temple to be erected, His
  instructions were to use only such trees as are
  not fruit-bearing-- though all things belong to
  Him--how much more should this be so in thy
  case?
• The employment practices of a business should be
  just and fair to their workers.
• Leviticus 1913
• The wages of he who is hired shall not
  remain with you all night until the morning.
• We will expect the businesses that we invest in
  to deal in good faith and demonstrate good
  corporate governance.
• Leviticus 2514
• When you buy or sell anything to your neighbours
  hand you shall not wrong one another

4

• The businesses that we invest in should respect
  human rights and should neither take nor give
  bribes
• Exodus 237-9
• Keep far from a false matter and do not
  slay the innocent and righteous for I will not
  justify the wicked. And you shall take no bribe
  for the bribe blinds the wise, and perverts the
  words of the righteous. Also you shall not
  oppress a stranger for you know the heart of a
  stranger, seeing you were strangers in the land
  of Egypt.
• The businesses that we invest in should not sell
  strategic military weapons to oppressive regimes
  
• Leviticus 1916
• Do not stand idly by while the blood of
  your neighbour is shed.
• If a business is involved in the health sector it
  should engage in practices which enable wide
  access to healthcare.
• Mishneh Torah, Hilchot Deot 41
• A person should keep himself far away
  from anything that is injurious to his health.

5

• If the activities of the business require it to
  work with animals it should take care not to
  treat them with cruelty and conversely to treat
  animals with respect for their quality of life.
• Tzaar baalei chayyim eg. Deuteronomy 224 6
• The businesses that we invest in will not
  inappropriately market health damaging products
  to vulnerable consumers
• Deuteronomy 228
• Build a parapet around a flat roof lest someone
  unknown to you might fall off the roof and injure
  themselves.
• We will invest a proportion of our assets in
  businesses which are listed on the Israel Stock
  Market or otherwise owned and operated in Israel
• We will invest a proportion of our assets in
  micro-finance
• Maimonides Mishneh Torah Matnot Aniyin 107
• The highest degree of Tzedkah is to help the
  needy with a gift or loan or partnership or by
  enabling them to find employment so that they may
  become independent.

6
Is a Jewish Shareholder Responsible for the
Corporation?

• Shareholders would seem to be required to
  dismiss their corporate officers if these would
  perform, on their behalf policies that would be
  considered halachically to be immoral or
  non-permissible otherwise the responsibility,
  moral and legal, devolves on them as it would in
  the case of partnership or single owner firms.
• Meir Tamari (The Challenge of Wealth 1995)
  p97
• but see D.B. Bressler Ethical Investment in
  Jewish Business Ethics ed Aaron Levine, Moses
  Pava (1999) who shows (pp.180-184) a wide
  divergence of views in leading Halachic sources
  on the ownership status of corporate
  shareholders. Shareholder responsibility for
  corporate actions that are counter to Jewish law
  depends, at least in part, on whether the
  shareholder has ownership standing.
• Views range from Rabbi Menashe Klein who states
  that a corporation is nothing more than a
  partnership of all shareholders ...with ownership
  status proportionate to their holdings in the
  company through Rabbi Moshe Feinstein A private
  or family corporation whose shareholders control
  company policy is like any other partnership.
  Shareholders are to be accorded ownership status.
  On the other hand, shareholders in large public
  corporations who have no control over company
  policy or decisions are not to be considered to
  have ownership status. to Rabbi Moshe Sternbuch
  a shareholder whose holdings become public
  knowledge will have the same obligations as a
  full fledged owner ... because of marit ayyin.

7
Requirements on Jewish Organisations with Funds

• Prudential Investment
• Accountability
• Avoiding Conflicts of Interest
• Transparency
• Ethical Distance from Wrongdoing
• From Principles of Communal Investment in
  Judaism Rabbi Dr Asher Meir to be published
  by Business Ethics Center of Jerusalem
  supported by Shoresh and 3iG

8
Making Jewish Responsible Investment Effective

• You shall not hate your brother in your heart
  you shall reason with your neighbour, and not
  allow sin on his account. Leviticus 1917
• Joining with others who share stewardship of the
  Earth 3iG
• Encouraging Jewish organisations and individuals
  to be responsible investors