Moving investment onto ethical footing is better for all, says Church of England



Ethical investment produces “more sustainable” financial returns, as well as better quality of life for society, according to the Church of England’s Ethical Investment Advisory Group’s (EIAG) annual review.

The EIAG gives advice and recommendations to the three national investing bodies: the Church Commissioners for England, the Church of England Pensions Board and the CBF Church of England Funds, which are managed by CCLA. Between them, they oversee some £8 billion in assets.

In a letter at the beginning of the review, EIAG chair James Featherby writes, “It is becoming clear that where historical assumptions and practices stand in the way of good principles, it is not the good principles that should give way.

We are learning that aligning good investment practice with the long-term health of economies and societies is in the collective best interests of beneficiaries because everything is connected.

Such an alignment creates the possibility not only of more sustainable financial returns but also of a better quality of life for beneficiaries.”

The eight-page document outlines how the EIAG has fared on voting, engagement, policy and partnerships in the last 12 months.

The EIAG says it has engaged “intensively” at board level with Barclays since June 2012 – when the Libor scandal became public. In January, chief executive Antony Jenkins called on employees to observe the bank’s new ethical values or quit, as well as unveiling a new ethical strategy.

In the EIAG annual review, it says, “We have been encouraged by the determination of the bank’s new leadership to turn a corner and to foster a more ethical culture.

However, ethical conduct cannot simply be enforced. We will know that Barclays has truly transformed when it inspires its staff to make sustainable profits through serving its customers and fulfilling its fundamental role in society.”

The EIAG, which is a signatory of the Principles for Responsible Investment (PRI), recently published an updated policy that seeks to reward top-level executives based on their sustainability credentials over the longer term. This is one example of the voting work it has done in the past year.

It has also done research into genetically modified (GM) crops, outlining how ethical investors should approach the often controversial area.

The archbishop of Canterbury Justin Welby spoke recently about ‘good’ banking at an event at St Paul’s Cathedral. Welby sits on the parliamentary commission for banking standards, which published its latest major review on Wednesday.

Further reading:

God v mammon or a match made in heaven?

Church of England investing bodies set out policy for sustainable executive rewards

New Archbishop must lead on ethical investment

Bringing ethical investment back to its roots

The Guide to Sustainable Investment 2013


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