Ethical and Social Investment - Contents
A growing activity of increasing interest to voluntary groups. Charities often feel constrained to pursue ethical investment (which here is taken to mean banking, pension schemes as well as trading in stocks and shares) by believing they have to maximise financial returns.
Firstly, ethical investments have had a good track record to date, where properly managed, although there are investment funds which specifically don’t try to achieve high financial results.
Secondly, it is legitimate to take other issues into account, such as:
– investing in companies where the charity’s objectives oppose its activities is clearly counter-productive to achieving those objectives.
– where investing in a company is likely to lose members, donations or public support, that too may not be in the best interests of the charity.
– some positive investments may be of help in achieving charity objectives, and slightly lower financial performance may therefore be justified.
Since this page was created, the Charity Commission (England and Wales) has updated its investment advice. At autumn 2014, this includes the statement:
Ethical investment You can choose to only make financial investments that reflect your charity’s values and ethos. You need to be able to explain why this approach is right for your charity, even if the financial returns are less. For example, investing ethically might prevent you from losing supporters or damaging your reputation.
Sources of information
These are gradually increasing in web presence.
- EIRIS Ethical Investment Research Service, 80-84 Bondway, London, SW8 1SF, phone 020 7840 5700, email email@example.com. Ethical Portfolio Manager is a CD-ROM based ‘research tool’ for analysing social and environmental performance of companies (and can be updated via the web access) – launched May 00. There is also a bi-monthly newsletter The Ethical Investor. Set up in 1983, the fullest range of services, including screening, checklists and guidance on approaches, enabling investors to create a portfolio reflecting own ethical concerns, etc.
- EIRIS with UKSIF have set up CharitySRI web site, to provide “clear comprehensive guidance on how charities can invest ethically” and align their investments with their mission (aka socially responsible investment).
- Ethical Investments – How far may charity trustees go? £2, Ethical Investment – have the Church Commissioners got it right? 50p, both from Christian Ethical Investment Group. Miss P Raikes, CEIG Enquiries, 2a New High Street, Headington, Oxford, OX3 7AQ (Info may be out-of-date).
- Ethical Investment Association (EIA) is a nationwide body of independent financial advisers (IFAs), which aims to facilitate the promotion of ethical investment by its members, and to set standards in the ethical investment industry.
- Charities Responsible Investment Network, set up spring 2013 and managed by ShareAction. Initially for investors such as endowed trusts and foundations, to enable them to “fulfil their charitable purposes through shareholder engagement with companies”. A sister network for operational charities is expected in 2015.
- Good Money Week (was National Ethical Investment Week) has some information and resources.
- UK Social Investment Forum A grouping of financial advisors, fund managers, investors and others, which has the primary purpose ‘to promote and encourage the development and positive impact of Socially Responsible Investment throughout the UK’. Useful listings of members and affiliates, plus articles, newsletter items.
Investment Funds, Banks, Investment Vehicles
- CAF (Charities Aid Foundation) has a variety of investment vehicles for charities, including socially responsible portfolios, plus ethical investment information.
- The Ethical Partnership – independent financial advisers.
- Ethical Property Company Invests in premises to let out to charities, community groups, social enterprises. Resource centres in London and elsewhere.
- Co-operative and Community Finance Promote and carry out investment in the ‘social economy’. Head office: 01179 166750.
- Shared Interest ‘Our funds come from our members, thousands of ordinary people who have pooled their savings to provide the finance that Third World Producers need’.
- Social Investment Business.
- Triodos Bank ‘One of Europe’s leading ethical banks, draw on 20 years experience financing social and environmental charities.’ Brunel House, 11 The Promenade, Clifton, Bristol, BS8 3NN, phone 0800 328 2181 or 0117 973 9339, email: firstname.lastname@example.org
- Community Investment Trusts, or Community Development Finance Institutions, have sprung up around the country. (There are tax breaks for these.) See Community Development Finance Association.
- Some local or regional trusts: Ulster Community Investment Trust. Impetus – Shropshire, Herefordshire, Worcestershire.
- Pension providers are included on Banking, Investment page.
Credit Unions are mutual financial (and democratic) organisations, particularly promoted by community, coop and trade union movements. Members are individuals, rather than organisations, but are part of the ‘social investment scene’.
- Association of British Credit Unions. Holyoake House, Hanover Street, Manchester, M60 0AS, phone 0161 832 3694, email: email@example.com
- SCVO is developing its own credit union for those involved with its member bodies. Phone 0131 556 3882, email: firstname.lastname@example.org
- Unity Trust Bank offers a Credit Union Development Fund which helps fund a credit union grant programme as well as paying high interest.