How to invest ethically

Like many in the sector I watched Panorama with baited breath last December, as Comic Relief was scrutinised for the way it invests its reserves. The organisation handled the exposure very well and recently announced that it will shortly introduce a new ethical investment policy. But it was and is clear to us at ACEVO that this problem isn’t going away. 

When a big charity invests its reserves, it has a difficult balance to strike between bringing in a financial return and checking where the money is going. There may be cases like Comic Relief where money goes to arms, tobacco and alcohol which run counter at least to the spirit of that charity’s work. This week Trinity College Cambridge saw its own students protesting in opposition to its shares in arms companies.

Having consulted far and wide over the last six months I was pleased to announce on Monday the launch of our Ethical Investments Commission, chaired by Martin Clarke of the UK Sustainable Investment and Finance Association. It will run for around six months then produce guidance aimed at chief executives and trustees, to help them align their charities’ investments with their charitable objectives, and help make them aware of all the ethical options open to them for their finances.

The other Commissioners, so far, include:

• Michael Quicke, chief executive of CCLA

• Jonathan Jenkins, chief executive of the Social Investment Business

• Sudhir Singh, partner at MHA Macintyre Hudson 

• Rob Lake, trustee of the Friends Provident Foundation

• Caron Bradshaw, chief executive of the Charity Finance Group

• Jill Halford, director of audit practice and charity specialist at PWC 

• Catherine Howarth, chief executive of the Charities Responsible Investment Network

• Alice Ryder, a senior investment consultant at Stanhope Jewson

Beside looking at this part of the investment market, the Commission will also look at the relationship between responsible investing and impact investing, and the specific role of chief executives in forming and communicating effective ethical investment policies. It will be consulting far and wide with ACEVO members and through an open consultation which can be written to at financecommission@acevo.org.uk.

You can find more information on our website (http://www.acevo.org.uk/news/acevo-establishes-task-force-advise-charity-and-social-enterprise-sector-ethical-and) and I’ll post updates on the Commission’s work on my blog.