The case for responsible investment

Adopting responsible investment helps your charity avoid conflict with your objectives and minimise risks to its reputation. It can help you avoid alienating supporters, staff or beneficiaries and use investments to further the work of your charity.

Being seen to invest in particular sectors or companies could damage the reputation of your charity and the public’s perception of your work. This could be a particular concern for fundraising charities. According to a 2008 GFK/NOP poll of 2,000 adults commissioned by the EIRIS Foundation, 52% of the general public would be unwilling to give to a charity that is investing in a way that is against its mission, and a further 31% would be less likely to give.

In addition to helping charities avoid risks to reputation, responsible investment provides opportunities for to positively influence corporate behaviour in line with your charitable aims and objectives. Charities can punch above their weight when it comes to using shareholder powers to influence companies’ social, environmental or ethical behaviour. The reputation and supporter base of charities can aid their engagement with companies – whether this is done directly or through investment managers. A focus on social and environmental issues can also help investors to identify factors that could be a risk to long-term financial performance – such as how companies are responding to climate change.

The EIRIS role

EIRIS was established by a group of churches and charities that wanted to apply their principles to their investments. We have 30 years’ experience of working with charities, trust and foundations to help them address the following questions:

  • Are you invested in activities contrary to your mission statement? How sure are you?
  • Is there a danger that you may partner with companies that are involved in activities that would be incompatible with your mission statement?
  • Apart from the moral stance, could this constitute a reputational/stakeholder risk

The way ahead

EIRIS can help you to:

  • Develop an investment and/or partnership/donor policy which reflects your mission statement
  • Assist in different approaches available for each objective, positive/negative screening, best of sector
  • Create a final policy to utilise with fund managers and/or internally

For more details of how we can help please contact our client team

  

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