A Conclave to Test Pope Francis’s Legacy: How the Next Pope Could Shape Global Investments

The 2025 papal conclave will mark a pivotal moment in the Catholic Church’s history, not just spiritually but economically. The next pope’s ideological leanings will influence everything from the Vatican’s financial reforms to its stance on climate change, poverty, and global development—issues with direct implications for investors. The candidates vying to succeed Pope Francis bring contrasting visions, from progressive social justice advocacy to fiscal conservatism, each with the potential to reshape the Church’s economic priorities and the markets it engages.

A Church in Financial Transition
Pope Francis’s decade-long push for transparency and fiscal discipline has left an indelible mark. Under his leadership, the Vatican cut its net debt by 15% in 2023 through asset sales and pension reforms, as reported by the Administration of the Patrimony of the Apostolic See (APSA). Yet structural deficits persist, with annual shortfalls of €50–60 million, driven by underperforming assets and institutional resistance to change. Only 20% of the Vatican’s vast real estate portfolio generates income, leaving much of its wealth tied to non-revenue-generating properties like churches and hospitals.

The Candidates and Their Economic Priorities
The conclave’s outcome will hinge on whether reformists or traditionalists prevail. Here’s how key candidates could shape the Vatican’s economic trajectory:

1. Luis Antonio Tagle (Philippines): The Social Justice Advocate
   As head of the Congregation for the Evangelization of Peoples, Tagle has prioritized outreach to the Global South, emphasizing economic equity and support for marginalized communities. His election could accelerate Vatican funding for poverty alleviation programs in regions like Southeast Asia and Africa. Investors in microfinance, fair trade, and renewable energy projects in these areas may see increased institutional support.

2. Pietro Parolin (Italy): The Diplomat with Fiscal Woes
   Parolin’s tenure as Vatican Secretary of State has been marred by scandals, including a failed London property deal that cost the Vatican millions. While his diplomatic acumen is unmatched, his leadership risks perpetuating the Church’s financial instability unless he addresses systemic issues like underutilized assets. Investors in Vatican real estate ventures or those tied to its opaque property holdings should proceed with caution.

3. Peter Turkson (Ghana): The Climate and Equity Champion
   Turkson’s focus on integral human development—a holistic approach blending economic justice and environmental sustainability—could propel the Vatican to double down on its Sustainable Investment Fund. This initiative, targeting a 20% allocation to green energy and social impact projects by 2027, has already yielded a 7.2% return on solar investments. A Turkson papacy might amplify partnerships with global climate funds and ESG-focused firms.

4. Peter Erdő (Hungary) and Angelo Scola (Italy): Traditionalists at a Crossroads
   Both candidates prioritize doctrinal continuity over reform, favoring centralized hierarchies and fiscal caution. Erdő’s alignment with Eastern Christianity could deepen ties to resource-rich but politically unstable regions like Russia or Ukraine. Scola’s conservative fiscal stance might limit risky investments, favoring traditional holdings. However, their reluctance to modernize asset management could prolong the Vatican’s liquidity challenges.

Investment Implications: Navigating the Conclave’s Crosscurrents
The conclave’s outcome will influence three key areas critical to investors:

1. Transparency and Asset Management
   Reformists like Tagle and Turkson are more likely to push for the sale of non-income-generating assets or partnerships with private firms to monetize the Vatican’s portfolio. This could create opportunities in real estate or infrastructure but also raise risks tied to divestment. Traditionalists, by contrast, may prolong the status quo, leaving the Vatican reliant on volatile asset sales.

2. Climate and Social Impact Investing
   Turkson’s election could supercharge the Vatican’s ESG commitments, aligning with global trends in renewable energy and corporate social responsibility. Investors in green bonds or fair wage initiatives may benefit, while fossil fuel-related ventures could face heightened scrutiny.

3. Geopolitical and Regional Focus
   Tagle and Turkson’s emphasis on the Global South could redirect Vatican funding to emerging markets, boosting sectors like education, healthcare, and infrastructure in Africa and Asia. Erdő’s ties to Eastern Europe might favor energy and mining investments in geopolitically sensitive regions.

Conclusion: A Crossroads for Faith and Finance
The next pope’s economic priorities will test the legacy of Francis’s reforms. With a structural deficit of €50–60 million annually and only 20% of assets generating revenue, the Vatican must modernize its finances or risk a liquidity crisis.

• Reformists (Tagle, Turkson): Offer the clearest path to fiscal stability and growth, leveraging ESG and emerging markets. Their policies could unlock value in underperforming assets and align with global investment trends.
• Traditionalists (Parolin, Erdő/Scola): Risk prolonging the status quo, leaving the Vatican vulnerable to financial strain but offering predictability for conservative investors.

The conclave’s winner will also shape the Church’s moral authority on global issues—from climate change to wealth inequality—positions that increasingly influence corporate governance and ESG standards. Investors should monitor not just the election outcome, but the new pope’s first moves on transparency, asset sales, and partnerships. The stakes are high: a reformist victory could turn the Vatican into a 21st-century financial force, while traditionalism may cement its role as a relic of old-world economics.

In either case, the conclave’s decisions will resonate far beyond Rome, echoing in boardrooms and stock markets worldwide.