Charities seek High Court clarification on responsible investment law

Two charities are going to the High Court to seek clarification of the law relating to responsible investments.

An update on the Charity Commission’s website, published yesterday, said the two unidentified charities had been granted permission to bring the case in the middle of last month.

It says: “The two charities seek clarification of the law, and we expect that there will be a court hearing later this year.”

Responsible investment refers to financial investments that align with a charity’s mission and purpose.

The regulator did not provide further information on what aspect of responsible investment the case related to.

The Attorney General, Michael Ellis, is being asked to clarify the law in this area and the commission has been invited to take part in the proceedings.

The regulator said it was considering what role it might take because the case could have implications for its guidance on responsible investments.

In the meantime, the commission said it was important it continued the consultation process it opened in January to allow charities to have their say on the format, tone and approach to its guidance.

The commission previously indicated its intention to simplify its responsible investment guidance for charities following a listening exercise it completed last year.

The regulator said it received 40 written submissions as part of that process, some of which indicated that they reflected the experience of hundreds of charities.

Charities cited outdated case law and poor regulator communication as barriers to responsible investment, as well as concern among trustees that they lacked the correct knowledge or expertise.

The updated statement on the regulator’s website said: “We still plan to publish a summary of the consultation responses in the summer.

“As the court’s decision may affect our draft guidance we will consider any further steps once the court has given its judgment.”

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