S&P just launched a Catholic Values Index - but it completely ignores Pope Francis' recent letter

S&P Dow Jones Indices just created a new index that excludes companies apparently involved in activities that are deemed "inconsistent" with Catholic values.

However, it seems to be ignoring a key issues Pope Francis recently wrote to every Catholic bishop about - thinking about the environment and "replacing fossil fuels."

The S&P 500 Catholic Values Index only excludes companies involved in any form of activity related to war. It tracks invests in oil and gas companies.

This month, the Pope said "highly polluting fossil fuels needs to be progressively replaced without delay" in an encyclical, which is a letter sent to all Catholic bishops by the Pope.

So, investing in oil and gas stocks probably isn't what he was hoping for.

If companies are involved in the following activities, they will not be included from the S&P's new index:

• Biological weapons, chemical weapons, cluster bombs, landmines
• Nuclear weapons - any exposure to whole systems and strategic partnerships
• Conventional Military sales - companies that have their primary business activity as military products
• Child labor employment in the company's operation or in supply chain

"Sustainable issues represent one of the most important cost and revenue drivers in the modern corporate world," said Julia Kochetygova, Head of Sustainability Indices at S&P Dow Jones Indices in a statement.

"By selecting stocks that comply with the US CCB, the S&P 500 Catholic Values Index aims to include companies with resilient business profiles by addressing the ethical challenges that can make a stronger investment case. We are excited to be working with Global X by licensing this new and innovative index to them."

The United States Conference of Catholic Bishops (US CCB) is responsible for deciding what is deemed not morally in keeping with the Catholic faith and excludes investment in what is not. The body outlined this in the Socially Responsible Investment Guidelines.

The launch of the index comes at an interesting time because some of the largest American Catholic organisations are at odds with Pope Francis' recent mandate to religious leaders about the environment.

Some of the biggest Catholic institutions in the US invest heavily in oil - which, again, are not excluded from the S&P 500 Catholic Values Index.

In fact, global energy giant Exxon Mobil is one of the top-weighted stocks in the index:

At the beginning of the month, America's third largest Catholic institution by Catholic population, the Archdiocese of Chicago, told Reuters it has $100 million (£64 million) worth of investments related to fossil fuels. Reuters' report also claimed that dioceses in places such as Boston, Baltimore, Toledo, and a bulk of Minnesota have millions of dollars worth in oil and gas stock holdings too.

At the time of Pope Francis' letter, the US CCB did not say whether it would review its policy in investing in fossil fuels, but judging by today's launch - we've now got the answer.