The EIRIS Foundation is pleased to respond to the Charity Commission’s consultation on its Responsible Investment guidance: https://www.gov.uk/government/consultations/charity-responsible-investment-guidance. We welcome the Commission’s efforts to clarify and update the existing guidance and to acknowledge some of the current issues. However, overall, we feel the proposed changes do not adequately reflect:
- current best practice and innovations in the responsible investment landscape.
- societal expectations and need with regards to, amongst other issues, the climate emergency and the ways in which investment can be part of a solution.
- the need, and desire, from charities for forward-thinking guidance that is, at the very least, aligned to other governmental developments around responsible investment (such as current pensions guidance on climate).
- the degree to which thinking around responsible investment and ESG has moved on in recent years dispelling the myth that there is an either-or decision between financial returns and responsible investment.
In our previous response to the Commission’s call for views on this topic we indicated that although the current guidance doesn’t prohibit charities from taking social, ethical and/or environmental considerations into account with regards to their investments it also does little to encourage them. It is our belief that charities should be taking their charitable objectives and their public benefit requirement into account when setting investment policy and making investment decisions. The public benefit principle would normally require you think about whether your fundraising activities or the operation of any other charity asset were causing negative harms. It seems to us that investments should not be somehow exempt from the same scrutiny and challenge. We don’t think that the proposed changes address this point adequately.
If you have any questions or would like to get in touch with us about our response, please contact [email protected].