CHARITIES AND TRUSTS

What is green and ethical investing?

Green and ethical investments use social and environmental criteria in addition to financial criteria. They look at the wider impact of investing on society and the environment when seeking financial returns.

'Green and ethical' are terms that can apply to many different types of investments. You may also hear the terms 'responsible' or 'socially responsible investing'.

Invest in your mission

Green and ethical investments offer the opportunity to align your investments with your mission, giving you another practical tool with which to support your charity's work and protect your reputation.

Most charities and trusts will be able to pick investments that fit with your charity's objectives. For example, a housing charity might consider investing in a sustainable property fund. A health charity can join forces with others to drive up corporate best practice, for example on access to medicines, through engagement. Faith-based charities can reflect their values in their investments through a variety of approaches.

Sustainable returns

There is strong evidence that green and ethical investments need not under perform. A well-managed green and ethical investment can perform as well as other investments.

Investments that consider environmental, social and governance issues may even contribute to the long-term health of a charity or trust's portfolio by creating more sustainable returns. They may also allow charities and trustees to benefit from major social and environmental trends.

The Charity Commission recognises that green and ethical investing may be entirely consistent with trustees' obligations to further the purposes of the charity while seeking the best return from investment.

Resources

CharitySRI outlines a comprehensive approach to green and ethical investing. The site also lists resources for investment advisers and charity supporters.