Common Investment Funds (CIFs) still have some way to go to meet the needs of charities that wish to invest ethically, according to new research released today. Responsible Investment Approaches to Common Investment Funds reveals that a quarter of CIFs employ socially responsible investment (SRI) screens but do not yet fully cater for the diverse needs of charities.

CIFs, collective investment vehicles set up specifically to enable charities to pool investments, have an estimated £9 billion of assets under management. Approximately £1.5 billion of this is invested in CIFs with multiple SRI screens.  The most common ethical issues considered by these CIFs are gambling, armaments, alcohol and pornography.

The research, conducted by the EIRIS Foundation and UK Social Investment Forum, found that two thirds of CIFs avoid tobacco investments. This is in part due to fund managers responding to charity wishes.

Peter Webster, Executive Director of Ethical Investment Research Services (EIRIS) commented, "It is encouraging to see that a number of CIFs are responding to the needs of charities in terms of their ethical concerns. I hope that this new research will encourage more charities to consider the responsible investment approach of CIFs and, if they are not satisfied with what is currently on offer, to talk to their fund managers about their SRI needs."

Neville White, Head of the SRI Unit at CCLA Investment Management Limited said, "This report provides a timely reminder to fund managers that it is possible to incorporate social, environmental and other ethical issues into the investment process and that it is important to listen to the needs of charity investors. At CCLA we revised the SRI policy of our CIFs after conducting a survey of our clients which told us what issues were important to them."

"Penny Shepherd MBE, Chief Executive of UKSIF and Chair of the EIRIS/UKSIF Charity Project added, "Charities with small sums to invest are more likely to use pooled funds such as CIFs, as minimum investment levels tend to be low. We are pleased to see the emergence of new pooled funds - for example those enabling charities to invest in line with Catholic values or to invest in social housing. Such developments will enable more charities to invest in ways that complement their activities and mission."