Have you heard of religious faith based investing? Those of you who are good at making money in the stock market or working in the management or the financial sector may have.

But I haven’t until I came across this story in Businessweek. I was really surprised to read it.

I knew that in Islamic countries they follow or try to follow economic practices based on Sharia.

But Dow Jones pioneered an Islamic market Index in compliance with Sharia in 1999.

In line with Islamic market Index, they’ve now launched Indic (especially Hindu and Buddhist) religion based Dow Jones Dharma Indexes in partnership with Dharma Investments, an Indian firm. (there are four country specific indexes: India, the U.S., the U.K. And Japan).

The move is aimed at helping people invest in stocks that are in sync with their religious beliefs!

The stocks of the companies that uphold opposition to animal slaughter, protection of environment and good corporate governance are Dharmic.

To measure dharma-compliant stocks The Dow Jones Dharma Indexes “track more than 3,400 companies globally, including about 1,000 in the U.S.”

IBM, Apple and Intel are examples of Dharma compliant companies in the U.S.

Infosys, HDFC, ICICI, L & T, etc., are some of the 254 Dharma compliant companies in India.

Three boards of experts, gurus and academicians supervise the screening of companies.

  • The Advisory Committee provides guidance and establishes the principles for the methodology.
  • The Supervisory Board interprets the principles and creates and implements the screening criteria in accordance with the methodology.
  • The Dow Jones Dharma Religious Council ratifies and endorses the established guidelines and methodology.

All companies are reviewed quarterly.

Many companies are excluded from the indexes because they “are deemed unacceptable due to the nature of their business activities and operations…” and they “have exposure to unacceptable business practices.”

Aerospace and defense, casinos and gaming, tobacco, alcohol, adult entertainment, etc., are businesses/companies excluded!

Predictably several spiritual leaders and scholars in India have welcomed the initiative and sent their blessings and support.

One typical message said:

“Trust is the breath of business, ethics its limbs, to uplift the spirit its goal.”

(Other links: Hoovers, Washingtonpost.com, The Pew Forum on Religion & Public Life.)

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