The Church of England’s national investing bodies, including CCLA which manages funds on its behalf, have struck a deal to get ethical screening services and environmental, social and governance (ESG) ratings from index provider MSCI ESG Research.
The Church Commissioners, the Church of England Pensions Board and the CBF Church of England funds collectively hold some £8 billion of assets. Their combined investment universe consists of some 9,000 companies.
MSCI ESG Research, which specialises in research and analysis, will assist the church in screening out companies involved in sectors such as tobacco, pornography, gambling and armaments. It will also conduct bespoke screening in areas like payday lending and coal extraction – both of which are excluded in CCLA’s Charity Ethical fund.
Companies that have breached standards set by the UN Global Compact – a set of 10 principles covering human rights, the environment and anti-corruption – will also be identified.
Remy Briand, managing director and head of MSCI Index and ESG Research, described the Church of England and CCLA as “pioneers and market leaders in ethical and responsible investment”.
“Working with them is a unique opportunity for us to expand our involvement with the charity and faith-based investment community in the UK”, he added.
News of the partnership comes six months after the church’s ethical investment policies were brought into question when it was revealed it had indirectly invested in payday lender Wonga. It was roundly criticised for this, despite the £75,000 investment representing just 0.3% of the pooled fund in question.
More recently, the church claimed that it was unlikely to divest from fossil fuel firms in the near future, despite voices within the faith expressing concern about climate change.
Speaking about the deal with MSCI, CCLA head of ethical and responsible investment Helen Wildsmith said, “MSCI has an impressive suite of services for ethical and responsible investors. Their global reach, and provision across bonds as well as listed equities, were important factors in us choosing to appoint MSCI ESG Research to our roster of ethical screening partners.”
In related news, CCLA confirmed it will continue to work with responsible investment research firm EIRIS. It said the deal would help would see EIRIS not only provide ethical screening services, but also help with its FTSE350 engagement programme.