Negative Screens
As an expression of our Catholic and Franciscan values, the Franciscan Sisters of Mary (FSM) integrates a disciplined approach to ethical investing across all portfolios. We invest exclusively through separately managed accounts (SMAs), allowing us to apply a high level of control and transparency in aligning our financial stewardship with our moral commitments.
FSM has developed comprehensive exclusionary screening guidelines to avoid investments in companies whose primary activities conflict with our values. These guidelines direct the exclusion of companies that derive any revenue from:
● The manufacture of abortifacients and contraceptives, including for-profit healthcare providers such as hospitals and surgical centers;
● The development, manufacture, or sale of nuclear, biological, or chemical weapons;
● Fossil fuel extraction, including ownership of reserves, fracking, and tar sands operations.In addition, FSM excludes companies that derive substantial revenues (typically more than 10–15%) from:
● Tobacco production and distribution;
● Civilian firearms manufacturing and retail;
● Military weapons contracting (excluding non-weapons-related defense work);
● Adult entertainment, including production, operation, and distribution.
FSM’s abortion and contraceptive exclusions are applied with precision to reflect the complexity of corporate structures. The screen does not extend to companies involved only peripherally—such as medical device manufacturers with multipurpose products, insurers reimbursing for restricted services, or real estate investment trusts (REITs) that own but do not operate acute care facilities.
To ensure accurate and consistent implementation, FSM retains Institutional Shareholder Services (ISS), a specialized firm to conduct ongoing third-party screening and analysis. ISS evaluates corporate activity—both domestic and international—against FSM’s guidelines and provides a regularly updated exclusion list.
FSM’s portfolio managers are mandated to avoid all companies on this list, ensuring fidelity to our mission across all investments. This approach reflects FSM’s commitment to responsible ownership and the pursuit of justice, sustainability, and respect for life in all aspects of our financial activity.
Proxy Voting
The Franciscan Sisters of Mary follow a faith-aligned approach to proxy voting, guided by the Catholic Faith-Based Proxy Voting Guidelines developed by Institutional Shareholder Services (ISS). These guidelines incorporate principles from Catholic Social Teaching to inform shareholder decisions, ensuring that FSM’s investments reflect both financial stewardship and moral responsibility.
Corporate Governance
FSM supports strong, transparent corporate governance practices.
We advocate for:
– Independent, diverse, and accountable boards of directors
– Clear separation of CEO and board chair roles to enhance oversight
– Executive compensation plans that are fair, performance-based, and support long-term value
We believe sound governance is foundational to both financial performance and ethical leadership.
Social and Environmental Responsibility
Consistent with Catholic Social Teaching, FSM promotes corporate actions that respect human dignity and protect the planet. Our voting priorities include:
– Upholding human rights, including opposition to human trafficking and forced labor
– Supporting climate resilience, emissions reduction, and responsible resource use
– Ensuring access to essential medicines, especially in low-income communities
We seek to influence companies to be positive agents of human and environmental well-being.
Ethical Business Practices
We vote in favor of greater transparency and accountability in how companies influence society. FSM supports shareholder proposals that:
– Disclose lobbying activities and political contributions
– Promote responsible product development and marketing
– Limit corporate involvement in activities inconsistent with Catholic moral teachings, such as pornography
Our goal is to encourage companies to operate with integrity, fairness, and a commitment to the common good.
Our Commitment
Through active and informed proxy voting, the Franciscan Sisters of Mary seek to reflect our faith, values, and pursuit of justice in the marketplace. We believe that shareholder engagement is a powerful tool for promoting corporate responsibility and advancing the dignity of all people and the care of our common home.