In June 2023, we published a blog post titled How Much Does Artificial Intelligence Know About Faith-Consistent Investing? In it, we posed a question for ChatGPT ‘to act as if you're a Jewish religious scholar and an experienced investment advisor and please detail for me the unique aspects of Judaism that could be translated into investment guidelines similar to ESG.’ The post turned out to be one of our more popular notes of the year. It's a topic that continues to interest us, so we were especially keen to read Pope Francis' recent comments on Artificial Intelligence (AI).
In June of this year, he made history by joining the G7 summit in Bari, Italy – marking the first time a Pope has been invited to participate in a G7 summit. In his address, Pope Francis described AI as a 'cognitive-industrial revolution' with the dual potential to democratise knowledge and advance scientific research, but also to increase social inequities and biases. He emphasised that AI is not neutral or objective, as algorithms inherently reflect the biases and perspectives of their creators. AI mediates human interaction with the environment, which Pope Francis referred to as the 'techno-human condition.' He stressed the importance of understanding this relationship and the ethical implications it carries. For the Pope, this distinction between algorithmic decisions—based on predefined criteria or statistical inferences—and human decisions, which draw from wisdom, practical intelligence, and moral and spiritual insights, is crucial. He used the example of lethal autonomous weapons to illustrate the dangers of removing human judgment from life-and-death decisions. Advocating for ‘Algor-Ethics’, he called for the development of a set of global, inclusive principles and shared ethical standards to guide AI development. For the Pope, these principles should be supported by a diverse range of cultures, religions, international organizations, and corporations.
This isn’t the first time the Pope has addressed the topic of AI. His efforts began several years ago, when the Vatican collaborated with tech companies like Microsoft to establish the Rome Call for AI Ethics, published in 2020. This set of principles aims to promote transparency and accountability in AI development. Companies and governments that endorse the call make voluntary commitments to uphold these ethical standards.
The advancement of AI in recent years has been extraordinary. AI stocks have performed notably well in 2024, driven by the increasing integration of AI across various industries and significant technological advancements. One report cited that 65% of respondents reported that their organisations regularly use Generative AI, nearly double the percentage from a previous survey just ten months prior, with reports of cost decreases and revenue jumps, as a result. Additionally, regulatory efforts are intensifying, with the US and EU enacting numerous AI-related regulations to ensure ethical use. We’re also seeing discussion, for example, about its use in tackling environmental challenges – another key area of concern for Pope Francis – and tackling greenwashing by companies in sustainability reporting.
What does all this mean for faith-based investors? Faith organisations, guided by values, operate within an environment that necessitates various faith-based considerations. For many values-based investors, and perhaps not just Catholic investors, Pope Francis' views on AI may present several emerging ethical questions relevant to investment screening, shareholder advocacy, corporate governance and transparency, and social and environmental impact considerations.
Just this week, leaders of the world's major religions gathered in the Japanese city of Hiroshima to reaffirm their dedication to ensuring that AI is developed ethically and responsibly. As more faith leaders contribute to the discussion, a growing body of work will, no doubt, be available to help faith-based asset owners navigate this new terrain, and importantly, to implement these considerations in portfolios; ensuring that your faith values are clearly integrated into your Investment Policies and Guidelines is an important initial step to enable you to navigate emerging ethical questions with clarity. Many faith groups believe that investment governance should reflect their specific values and be integrated throughout the entire governance framework. Considering the pros and cons of AI, no doubt the topic will generate increasing focus as part of that governance process. At the very least, it is a technological area that faith-based investors might want to closely monitor.