Managers of socially responsible investment (SRI) funds will be asked how they select their investments and the methods they use to assess companies through a new voluntary accreditation scheme.
The idea has been approved by the European Commission and will be drawn up by the European Sustainable and Responsible Investment Forum based in the Netherlands.
The standard, which will be based on a code established this year by the Dutch Association of Investors for Sustainable Development, will also ask fund managers to tell companies how they must meet the entry criteria demanded by the fund.
The move follows fears that some new SRI funds are not enforcing SRI standards but still claim to be socially responsible.
The Strategy Unit report has recommended that larger charities declare their ethical investment stance in their annual reports.