The Halakhic framework distinguishes between mandatory exclusions (publicly immoral activities and Shabbat violations) and praiseworthy avoidances (Ribbis interest-based earnings and Lifnei Iveir, placing a stumbling block before the blind).
What it is
Drawn primarily from the Bais HaVaad Halacha Center responsa, plus Talmudic and Shulchan Arukh sources. Used by Orthodox Jewish investors who want their portfolios aligned with Halakha.
Mandatory exclusions
Companies whose primary business is publicly immoral (pornography, prostitution, etc.) are flatly forbidden under Halakha. Companies that openly violate Shabbat as a core business practice fall into the same category.
Praiseworthy avoidances
Ribbis (the prohibition on lending and borrowing at interest) is mandatory in personal transactions but more flexible in publicly-traded equity. Heter Iska is the rabbinic structure that lets observant Jews invest in interest-earning entities. Lifnei Iveir (the stumbling-block prohibition) is interpreted by some scholars to apply to stocks of companies that enable sinful behavior.
Who uses it
- Orthodox Jewish family offices
- Several Halakhic-aware separately-managed accounts
Sources
- Bais HaVaad Halacha Center responsa on stock investing
- Shulchan Arukh Yoreh Deah 117, 118, 159-177
- Talmud Bava Metzia and Avodah Zarah
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