Faith

Tikkun Olam: How Investing Can Repair the World

The phrase tikkun olam—Hebrew for “repairing the world”—appears many times throughout the Talmud and in Jewish mystical writings.

Although some Jewish communities believe the phrase applies strictly to its original uses in rabbinic law and mysticism, other communities interpret the idea more broadly. They view repairing the world as a guiding principle for social action. Tikkun olam is the process of righting wrongs and bringing the world to its full potential.

For many, tikkun olam extends to the world of investing. In a 2013 survey of 150 rabbis by Jumpstart Labs, more than 90% agreed that the Jewish community should align its investments with Jewish values and that there is, indeed, a core set of Jewish values applicable to investment. Most of those surveyed also believed that environmental concerns (like pollution) and social concerns (like supporting Israel) should be taken into account when making investment decisions.

Environmental Stewardship and Pollution

In the Jewish tradition, God created all living things, and people are responsible for conserving natural resources. Accordingly, for the vast majority of Jumpstart surveyed rabbis, investing in companies ranked among the 200 worst polluters doesn’t align with Jewish values. 30% agreed that the oil and gas sector should be avoided entirely, and 46% said the same about coal.

The fight against pollution, however, doesn’t need to be limited to nixing the worst offenders from a financial portfolio. Another way to fight pollution is to promote the growth of renewable energy sources. In fact, rabbis were in favor of investing in alternative energy (84%) and sustainable agriculture (75%). The Jewish community is already at the forefront of better agricultural practices, as many innovative techniques have originated in Israel, including advances in drip irrigation.

Investing in Social Issues

To align with Jewish values, investors can also align social initiatives with financial ones. 88% of the surveyed rabbis advocated investing in Israel. Yet, according to the Jewish News of Northern California, Jewish endowments currently have more money invested in Qatar, a primary funder of Hamas, than in Israel.

Israel has a vibrant and growing startup culture, which can allow investors to make investments across a diversified set of early enterprises. The region has earned the moniker of “The Startup Nation,” and thanks to recent changes in financial regulation, American Jewish nonprofits can now invest in Israeli startups. This offers a powerful, though potentially risky, tool to promote economic growth in Israel.

Jewish investors may also want to invest in companies that create jobs and economic opportunities across the Middle East in the hope that these firms will improve welfare and stability in the region as a whole.

While more than half of survey respondents said that impact investing should be pursued even if it leads to smaller financial returns, the good news is that, with the proliferation of environmentally and socially minded investment strategies seeking market rate returns, investors don’t necessarily have to sacrifice. By pursuing tikkun olam through investments, the Jewish community can help heal the planet and support Israel.

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