HOT ISSUE: Should charities exclude arms manufacturers from their investments?

HENRY BOUCHER, divisional director, charities, Gerrard

NO

Not unless the use of armaments is directly opposed to what the charity was set up to do; or they are excluded specifically by the charity's governing instrument; or if such investment has a significant impact on its fundraising activities.

The proportion of the FTSE All-Share Index excluded can vary from less than 2 per cent (whole weapon systems) to more than 25 per cent (whole weapon systems and strategic parts). Trustees must maintain a balance in their investments between diversification and suitability.

John Rogerson, head of investment services, Charities Aid Foundation

YES

A strong case can be made for charities excluding arms manufacturers. Charities are about making the world a better place. It is difficult to argue that armaments make the world a better place. Although armaments are tools, such tools cause much misery.

Many charities now recognise that a socially responsible investment approach, investing positively in industries of the future, is a credible approach to obtaining best long-term returns - and a clear conscience.

Stephen Lloyd, partner in law firm Bates, Wells %26 Braithwaite

YES

The concept of charity is intimately associated with notions of social justice. Violence is not part of charities' armoury. It is therefore extraordinary that charities cannot refuse to invest in the arms trade. Obviously, the Quakers and other similar charities can because that investment contradicts their fundamental tenets. But for other charities they can only refuse to invest in the arms trade if it would not result in "significant economic disadvantage". The law should be changed.

Les Jones, director of finance, WWF UK

YES

Individual charities have to weigh up the requirement to make the best economic return with their ability to exclude investments they believe would directly impede the furtherance of their objects. Charities should exclude arms manufacturers from their investments where arms clearly conflict with furthering their objects. WWF-UK excludes arms manufacturers from its portfolio because the use of offensive weapons, especially in the modern theatre of war, has a devastating effect on the environment.

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