Jake Hayman: Wealthy trustees are blocking regenerative investment models

The Charity Commission must confirm that people with financial conflicts should announce them and board chairs should manage them

Jake Hayman
Jake Hayman

Wealthy UK trustees with private investments in oil, gas and coal have been holding up, blocking and influencing conversations about moving to a regenerative investment model that would threaten their personal wealth. They have done this without declaring their interests and, as such, are doing so in clear breach of charity law. In many cases they have taken on positions of specific power on investment committees within the sector’s largest organisations.

Endowed UK charities have consistently neglected to align their resources with their missions. Whether they be programmatic organisations, grant-giving foundations or universities, the vast majority use the bulk of their wealth to fuel activities that are fundamentally destructive to society and the environment. The trustees driving this direction tend to be people from financial services organisations and those with significant private wealth who would be directly threatened by, for example, a low-carbon economy. 

The Charity Commission has failed to act on this, but it clearly time for it to do so. As a first step, it should confirm that people with financial conflicts must immediately announce all conflicts and that board chairs start to manage them properly. The solution ultimately needs to be that these people recuse themselves from key conversations on all issues connected to ethics and investments, and from agenda-setting on such issues.

The issue of agenda-setting is critical because – from conversations I’ve had with trustees and executives across the sector – it is clear that these issues are currently given a fraction of the air time they should get at trustee level and are dominated by mainstream investors who hide behind purposeful misinterpretations of charity law while supporting only marginal notions of "doing less bad".

While the Charity Commission reflects on this, there is a responsibility on chairs of these large charities to immediately ask anyone with a direct conflict to register this and recuse themselves. There is a further responsibility on these chairs, given the undeclared interests to date to begin a reflective enquiry into:

  • Who led the appointment of investment managers;
  • Who spoke out about investment strategy;
  • Who nominated external reference documents or invited external speakers to present to the trustees;
  • Who set the agenda for meetings on investment strategy;
  • Whether and why so little challenge was provided to the business-as-usual approach;
  • Who authored papers on investment policies; and
  • Why it is that not one of the UK’s experts on investment policies that are anchored in ethics have never come close to your board tables.

To be clear, investment managers who tell you that they have excellent environmental, social and governance screening and engagement strategies, and are Principles for Responsible Investment signatories, and so on, then invest you in BP, Shell and Exxon are not the people I am talking about.

I am not accusing individuals of conscious malicious intent necessarily, although this might well be an issue in some individual cases. Regardless of intent, a conflict of interest is undeniable if an individual trustee stands to lose financially on the destruction of the natural world and maintenance of social inequality and is actively pursuing an agenda to make sure that your organisation is investing in this destruction.

Jake Hayman is chief executive of Ten Years' Time

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