Guideline for Ethically-Sustainable Investment in the German Protestant Church

Published by the EKD Office, Kirchenamt der EKD, September 2016,3rd, updated edition, EKD-Text 113


1. Explanation of exclusion criteria


Weapons and armaments are not only used for defence but also for aggression. This runs counter to the churches' mission of peace. A comprehensible list of which weapons and military equipment are regarded as armaments is given in the appendix to the War Weapons Control Act*. According to this list, weapons of war include for example:

  • Fighter aircraft, attack helicopters, warships, submarines, and tanks.
  • Missile weapons, including the corresponding launchers.
  • Small arms (except for hunting and sporting weapons).
  • Howitzers, land mines, naval mines, explosive bombs.
  • Ammunition.

Companies producing cluster munitions or land mines and other controversial and banned weapons (that is, weapons whose use has been prohibited by conventions) should generally be excluded, even if the turnover is below ten per cent. These conventions are: the Treaty of the Non-Proliferation of Nuclear Weapons, the Biological Weapons Convention, the Chemical Weapons Convention, the Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons Which May Be Deemed to Be Excessively Injurious or to Have Indiscriminate Effects, the Ottawa Treaty aka Anti-Personnel Mine Ban Convention, and the Convention on Cluster Munitions -each one with the corresponding protocols.


The consumption of alcoholic spirit beverages lies in the personal responsibility of each individual; however, excessive or permanent use of spirits holds an increased risk of addiction.

The limit mentioned in the criterion approximately marks the transition from alcoholic beverages such as wine and beer (about 3 14 per cent by volume) to liquors (15 80 per cent by volume). This also includes manufacturers of so-called alcopops if they are based on spirits.

Tobacco products

The consumption of tobacco products lies in the personal responsibility of each individual but excessive or permanent use of these substances is associated with a considerable risk of addiction.


Gambling is ultimately problematic because it can lead to or foster gambling addiction. This is especially the case where there is only a short time period between stake and result to reflect one's own actions and become duly aware of the losses. In terms of this exclusion criterion, the following types of gambling are considered as "controversial": certain sports bets, electronic gaming like slot machines, virtual casinos, etc. Not included, however, are state lotteries and the like.

Besides the above-mentioned "classic" gambling, certain computer games must be considered as potentially addictive media. So far, however, research* results in this regard are not sufficient to include this sector in this exclusion criterion.

Violation of human dignity/pornography

Human dignity is based on the belief that women and men are created in God's image. This results in the mission to protect this dignity against derogatory, denigrating, or degrading portrayals. The analysis of this criterion should not only consider pornographic products, but also the producers of videos depicting violence and likewise computer games glamourizing violence.

Genetically modified crops*

Due to different application possibilities (for instance DNA sequencing*, marker assisted* selection, generation of genetically modified crops) the use of genetic engineering techniques in plant breeding is not excluded as a rule. Hence, this exclusion criterion refers to companies significantly producing genetically modified crops. What can be discerned here are above all socio-economic risks (the issue of extreme market concentration, increasing clustering of the value-added chain with just a few companies, and the granting of biological patents), ecologic risks (the hazard of contaminating conventional plants), and health hazards (resistance). This also includes the production of genetically modified woody plants (for example, wood for paper manufacturing, fruit trees). Green genetic engineering entails major risks for biodiversity, the environment, and health.

Since the application possibilities of genetic engineering are rather dynamic, continuous review and adjustment of the criterion is required.

Human rights/Violation of ILO Standards

The International Labour Organization (ILO) is a special agency of the United Nations and has four fundamental principles which have been specified with several core labour standards and a variety of additional conventions and recommendations. These four fundamental principles are:

  • Freedom of association and the effective recognition of the right to collective bargaining.
  • Elimination of all forms of forced or compulsory labour.
  • Effective abolition of child labour.
  • Elimination of discrimination in respect of employment and occupation.

A company should not be considered in the investment universe if it knowingly violates the ILO core labour standards, or does not take measures to stop violations that have become known-including those of suppliers. The exclusion of a business based on this criterion requires intensive and meticulous research*.

Peacebuilding/Global Peace Index

Instead of actively warmongering, a country should promote non-violence and peace. The Global Peace Index (GPI) is provided by the non-profit global think tank Institute for Economics and Peace whose aim is to promote and measure a concept of peace that goes beyond the mere absence of war. Hence, peace is assessed within the context of democracy, education, and common good, and is generally considered as the absence of violence.

The GPI compares and measures the absence of violence in 162 countries. The index consists of 22 indicators ranging from military expenditure as a percentage of a country's GDP, over the relations with neighbouring countries, up to the number of jailed individuals per 100,000 citizens. The data is based on a wide range of international sources, including several United Nations agencies, the World Bank, and peace research institutes such as the Stockholm International Peace Research Institute (SIPRI).

Death penalty

German Protestant churches take a categorical stand against the death penalty. The strongest argument against the death penalty originates in Christian, and here in particular, reformatory ethics: the clear distinction between an individual's inner self and external actions. This understanding has been introduced into European legal systems as the concept of inalienable human dignity. Thus, the death penalty is incompatible with the protection of human dignity.

The number of executions is increasing worldwide; however, the number of nations that practice the death penalty is decreasing. Approximately 80 per cent of all capital punishments are executed in China, Iran, Irak, and Saudi Arabia. In many other countries where executions take place, it receives less and less support from the population.

Classification "not free"

The research institute Freedom House issues an annual "Freedom in the World" report evaluating the degree of political freedoms and civil liberties in countries all over the world. The political rights and civil liberties (including freedom of religion) are assessed on a scale from 1 to 7. The countries are classified into three categories: free, partly free, not free.


Not only churches regard corruption as unethical [behaviour]. Transparency International defines corruption as abuse of entrusted power for private gain and publishes an annual Corruption Perceptions Index (CPI), which describes the degree of public sector corruption in a country as perceived by business people and experts. The scale ranges from 0 (highly corrupt) to 100 (very clean). All countries with a rating below 40 should be excluded.

Ecological incompatibility/climate-related damage

Conserving Creation includes not exceeding the absorptive capacities of the environmental media-water, soil, and air. A key factor in achieving this is to set binding limits and target values on the emissions [of greenhouse gases] that also play a crucial part in climate change mitigation.

The Climate Change Performance Index is an instrument that is supposed to enhance transparency in international climate politics. Its aim is to encourage political and social pressure on those countries that, up to now have failed to take ambitious actions on climate protection, and to highlight countries with best-practice climate policies. On the basis of standardised criteria, the index evaluates and compares the climate protection performance of 58 countries, which together are responsible for more than 90 per cent of global energy-related CO2 emissions. Eighty per cent of the evaluation is based on objective indicators of emissions trend and emissions level. Twenty per cent of the index results are built on national and international climate policy assessments by about 300 experts from the respective countries.

2. Principles for responsible Investment (PRI)-

The Six Principles

As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance* (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes, and over time). We also recognise that applying the PRI may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following six principles:

  • We will incorporate ESG issues into investment analysis and decision-making processes.
  • We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • We will promote acceptance and implementation of the PRI within the investment industry.
  • We will work together to enhance our effectiveness in implementing the PRI.
  • We will each report on our activities and progress towards implementing the PRI.

The PRI were developed by an international group of institutional investors and reflect the increasing relevance of environmental, social, and corporate governance* issues for investment practices. The process was convened by the United Nations Secretary-General. In signing the PRI, we as investors publicly commit to adopt and implement them, where consistent with our fiduciary responsibilities. We also commit to evaluate the effectiveness and improve the content of the PRI over time. We believe this will improve our ability to meet commitments to beneficiaries as well as better align our investment activities with the broader interests of society. We encourage other investors to adopt the PRI.

3. List of links (Selection-in alphabetical order)

Church Information and Publications:

Banks of the Church:

Bank für Kirche und Diakonie eG-KD-Bank
Evangelische Bank eG

Research Agencies:

Oekom research

Provider Database:

Sustainable Business Institute


Church Investors Group
Corporate Responsibility Interface Center
Forum Nachhaltige Geldanlagen
Interfaith Center on Corporate Responsibility
Projekt "Zukunft einkaufen"
UN Principles for Responsible Investment

Real Estate Certification:

Deutsche Gesellschaft für Nachhaltiges Bauen (DGNB)
Grüner Gockel/Grüner Hahn

Microfinance Organisations:



 4. Glossary

Assets under management-Managed funds; a significant financial indicator for size and success/market penetration of investment firms, insurers, fund managers, and banks.

BREEAM-Building Research Establishment Environmental Assessment Method is a certification method for buildings and entails numerous environmental and sustainability aspects. It was established in 1990 in Great Britain and underwent significant modernisation in 2008.

Corporate governance-The system of rules, practices and processes by which a company is directed and controlled.

Counter party risk-Default risk of the contracting party, especially the issuer.

Derivative-Financial instrument that derives its value (price, rate) from the performance of the underlying asset.

Effective tax rate-The average rate at which a corporation is taxed on pre-tax profits, and thus a measure for minimizing tax payment.

Equator principles-A voluntary framework adopted by banks for determining, assessing, and managing environmental and social risks in projects.

ETF-An exchange traded fund is a marketable security. ETFs are largely passively managed portfolios and track an index , a commodity, bonds, or a basket of assets like an index fund.

Futures (contracts)-Purchase or sale with delivery set at a specified time in the future; if, however, the transaction/delivery takes place immediately, it is called spot date.

Genetically modified crops-are plants into which genes foreign to the species have been introduced. In natural conditions,the hereditary disposition would not happen due to cross or natural breeding. For instance, if bacteria transfer certain genes to plant hosts, these plants can independently develop toxins to resist pests.

High frequency trading-Off-market and exclusively automated algorithmic trading of securities.

Intermediary-A mediator who goes between various actors.

Issuer-Someone who issues securities.

Lack of fungibility-Not interchangeable; the opposite is fungibility, interchangeability.

Land grabbing-Appropriation of land; large-scale land acquisitions: the buying or leasing of large pieces of land in developing countries by private and government investors. The target is food security in investing countries wishing to secure their own supply. Another goal is to secure water rights. Hence, the local population can no longer use the corresponding agricultural areas, subsequently destroying smallholder livelihoods. It entails the danger of increasing local food prices, deteriorating food situations which necessitate increased food imports, as well as damage to environment and biodiversity.

LEED-Leadership in Energy and Environment Design is a U. S. system developed by the U. S. Green Building Council for the classification of green buildings. It was developed in 1998, based on the BREEAM system, and rates buildings by awarding points for individual criteria.

Leuenberg Agreement-Constitutive document of the Community of Protestant Churches in Europe. In 1973, the member churches agreed in Leuenberg near Basel on pulpit and table fellowship, as well as full communion in witness and service.

Liquidity-in the Magic Triangle: measure for how quickly an invested amount can be traded again into cash/cash at bank; in derivative transactions: availability of cash/cash at bank [cash flow].

Marker assisted selection-A process used in plant and animal breeding whereby a marker is used for the selection of a genetic determinant or determinants of a trait of interest.

Mutual/specialist funds-Mutual funds are investment funds that are open to the general public. Shares of specialist funds, however, may only be acquired by institutional investors.

Offshore financial centre-is a financial centre outside of standard jurisdiction, characterized by low taxation, a high degree of confidentiality/non-transparency, and a low degree of banking supervision and regulation.

Offshore wind power-A group of wind turbines in the same location in a body of water to generate electricity from wind.

Open-end/closed-end funds-An open-end fund is a collective investment scheme that allows investors to acquire shares in bigger investments, even for relatively modest amounts of money. In general, shares can be issued and redeemed at any time. Closed-end funds provide investors with the opportunity to purchase shares for specific projects whose number is fixed. The shares can only be purchased and sold on the market.

Private equity-Equity capital, whereby the participation agreed upon by the capital provider is not traded on the stock markets. If the capital is made available to young and innovative businesses, or if there is a high risk (with a correspondingly high growth prospect) involved, one also refers to venture capital.

Research-Research analysts perform financial analyses of Companies and capital investments regarding specific aspects, the result of which serve as a basis for an investment decision.

Small Catechism-Protestant confessional statement written by Martin Luther in 1529 as a learning aid for youth education in churches regarding the core of the Christian faith.

Spot price-The current price paid for immediate delivery.

Underlying (assets)-Securities, reference values (interest rates, indices ...), or commodities (raw materials ...) whose (price) performance determines the value of derivatives.

UNEP Statement of Commitment by Financial Institutions on Sustainable Development-Statement of the UNEP regarding the responsibility of financial institutions for sustainable development, to the implementation of which financial institutions can commit as signatories.

Volatility-A statistical measure of the dispersion of returns for a given security or market index.

War Weapons Control Act-Implementing law to Article 26 of the Basic Law which regulates the manufacture, transfer, placing, purchase, and transport of war weapons.


5. Members of the Working Group Church of Church Investors-AKI

Evangelische Kirche in Deutschland

Evangelische Landeskirche Anhalts

Evangelische Landeskirche in Baden

Evangelisch-Lutherische Kirche in Bayern

Evangelische Kirche Berlin-Brandenburg-schlesische Oberlausitz

Evangelisch-lutherische Landeskirche in Braunschweig

Bremische Evangelische Kirche

Evangelisch-lutherische Landeskirche Hannovers

Evangelische Kirche in Hessen und Nassau

Evangelische Kirche von Kurhessen-Waldeck

Evangelische Kirche in Mitteldeutschland

Evangelisch-Lutherische Kirche in Norddeutschland (Nordkirche)

Evangelische Kirche der Pfalz Evangelische Kirche im Rheinland Evangelisch-Lutherische Landeskirche Sachsens Evangelisch-Lutherische Landeskirche Schaumburg-Lippe Evangelische Kirche von Westfalen Evangelische Landeskirche in Württemberg Evangelische Bank eG

Bank für Kirche und Diakonie eG KD-Bank Evangelische Ruhegehaltskasse in Darmstadt Evangelische Zusatzversorgungskasse

Kirchliche Zusatzversorgungskasse Rheinland-Westfalen/Gemeinsame Versorgungskasse für Pfarrer und Kirchenbeamte

Kirchliche Zusatzversorgungskasse der Evangelisch-lutherischen Landeskirche Hannovers

Norddeutsche Kirchliche Versorgungskasse für Pfarrer und Kirchenbeamte

VERKA VK Kirchliche Vorsorge VVaG

Evangelisches Werk für Diakonie und Entwicklung

Dachstiftung Diakonie

Diakonie Württemberg

Diako Thüringen

Evangelischer Pfarrverein in Württemberg Herrnhuter Missionshilfe Landesausschuss für Innere Mission Stiftung Jugendhilfe aktiv

Die Zieglerschen  

As of May 2016




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