The direction of the Catholic Church matters not just to its followers, but to the broader themes now driving economic decision-making.
The election of a new Pope won’t move markets in a single trading session. But over the longer term, it might prove more significant than many investors anticipate — particularly in a world where capital responds to shifts in values, regulatory frameworks and geopolitical tone.
The Vatican doesn’t set monetary policy or negotiate trade agreements. But under Pope Francis, it became a powerful global voice on issues that have migrated from the periphery to the centre of financial decision-making: climate risk, inequality, sustainable development and ethical business governance.
Pope Francis didn’t talk about asset classes, but he reshaped the backdrop against which capital is deployed.
He helped give moral credibility to the ESG movement long before governments and asset managers institutionalised it. In doing so, he made it easier for investors to back sustainability-linked projects, confident that they weren’t just socially valuable — but also structurally sound.
Now, with his passing and the conclave preparing to choose a successor, that legacy hangs in the balance.
Outward or inward-looking?
The next Pope will decide whether to continue the Church’s outward-facing role in global issues or refocus inward on tradition and doctrinal clarity. While the decision is spiritual in nature, it will influence the broader tone around global priorities — from environmental ambition to inclusive capitalism to social cohesion.
The timing also matters. Donald Trump is back in the White House. His administration has made clear it intends to govern with a renewed emphasis on faith-based conservatism — and there are already signs of potential alignment with the Vatican.
Just days before Pope Francis’s death, vice-president JD Vance made a high-profile visit to Rome. Officially, it was a diplomatic courtesy.
In reality, it underscored the awareness within the Trump administration of the Vatican’s unique influence — not just over Catholics, but across civil society, emerging markets, and increasingly, investor psychology.
Should the new Pope adopt a worldview more closely aligned with Washington’s, we could see a reinforcement of socially conservative policies with real economic implications. Immigration, reproductive rights, and education policy — areas where Church influence is considerable — are also central to labour markets, healthcare costs and long-term demographic trends.
A Vatican that actively supports a more nationalist, inward-focused Western agenda could shift the direction of regulatory priorities and investment flows. ESG, already facing political resistance in some regions, could lose a key global advocate.
Conversely, a successor who continues Francis’s vocal support for sustainability, poverty reduction, and environmental justice could reassert the Church as a powerful force in support of the global investment trends shaping this decade. It would reaffirm the view that sustainable capitalism is not only viable, but necessary.
Developing world
There are also important implications for emerging and frontier markets.
Catholic populations are booming in parts of Africa, Asia and Latin America — regions that represent both social need and economic potential. In many of these areas, the Church is a dominant provider of education, healthcare, and infrastructure.
A pope from the Global South, shaped by these realities, could draw new attention to these markets — not through monetary policy, but through influence.
This shift in focus could catalyse philanthropic capital, multilateral support, and even private investment into economies where growth is high and impact is measurable.
This matters because emerging markets are increasingly central to the global growth story.
Demographics are favourable, infrastructure demand is vast and technology adoption is accelerating. A moral and institutional spotlight from the Vatican could subtly, but powerfully, elevate the case for long-duration capital in these regions.
There is precedent for this. Pope John Paul II’s backing of the Solidarity movement in Poland didn’t just change the political trajectory of Eastern Europe — it helped shape the broader context for market liberalisation and economic transition.
This kind of leadership doesn’t show up in quarterly earnings, but it alters the ideological ground on which markets stand. Investors who think in cycles often overlook the slower, deeper shifts that shape capital flows over decades. Moral authority — when consistent and credible — can be one of those forces.
None of this means the papal election will trigger immediate volatility. But investors should understand what’s at stake.
The direction of the Catholic Church matters not just to its followers, but to the broader themes now driving economic decision-making: from how we treat labour and migration, to how we allocate capital in a warming world, to how we define fairness in taxation and governance.
The next Pope will help shape the tone of those conversations. He will not issue fiscal policy — but he may influence the debate around what good policy looks like. In today’s environment, where markets are responsive not only to data but to narrative and values, that matters.
Leadership changes in Washington and Beijing are rightly seen as moments of consequence. This transition in the Vatican deserves similar attention.
The choice facing the conclave is not just spiritual. It’s structural. And for markets that care about what comes next — not just this quarter, but this decade — it is worth watching very closely.
Nigel Green, deVere Group CEO and founder
