Trustee investments 'focus too much on financial return'

FairPensions report claims charity trustees often see their fiduciary duty 'as a straitjacket'

Trustee investments questionned
Trustee investments questionned

Charity trustees put too much emphasis on financial return when investing, and too little on their duty to beneficiaries, according to a new report from the ethical investment organisation FairPensions.

The report says that institutional investors, including trusts and foundations and charities, focus too much on securing the best financial return, instead of ensuring their investments meet ethical standards.

Christine Berry, a policy officer at FairPensions and author of the report, said: "There's a sense at the moment among charity trustees that fiduciary duty is a straitjacket. We feel that charities should be able to use their investments for social benefit."

She said most charity trustees were not aware of the law on ethical investment. "The law gives them a lot of power to focus on their charitable aims when they draw up investment policies – more than either government guidance or cultural traditions suggest," she said.

"Most trustees are still suffering from this myth that they have to produce a best financial return, and haven't explored the options for better investment.

"In particular, charity trustees have focused almost exclusively on excluding companies that don't accord with their aims, whereas they can also use responsible investment when they use their powers as investors to promote better behaviour by the companies they invest in."


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