The proportion of large charities with an ethical investment policy has not risen since two years ago, when surveys revealed forty per cent of them had no such policy, according to a specialist in the field.
Victoria Heath, head of business development at the ethical investment organisation Eiris, told delegates at the Charity Finance Directors’ Group investment conference yesterday that 60 per cent of large charities had ethical investment policies, but many of them were of limited use.
"I would question the validity of many responsible investment policies that do exist," she said. "Many do not include any way of measuring their effectiveness, which means you’re not accountable."
Heath said there has been "no significant improvement" in charities’ ethical investment record over the past two years. She said that charities were laying themselves open to reputational risk by not having responsible investment policies.
"You might think it would be acceptable to invest in FTSE-100 companies," she said. "But there are FTSE-100 companies involved in cluster bombs, child labour or pornography."
Heath said that Eiris research had found that most charitable supporters said they would think worse of a charity if it did not invest responsibly.
She said that there was no evidence that having an effective responsible investment policy led to worse investment returns, and that it was a myth that trustees were prevented from investing responsibly by fiduciary duty or Charity Commission guidelines.