More than £21bn of charity funds invest ethically

Mike Foster - 21 Dec 2001

At least £21bn (EUR34bn) of funds managed for the hundred largest charities in the UK take account of ethical criteria before they are invested,according to a survey produced by the Ethical Investment Research Service ( Eiris ).

Eiris has secured responses from 47 charities with funds worth £26bn, representing by far the largest constituents of the UK top-hundred, currently worth £30bn. Concern about ethical investment represents a huge increase compared to the last time Eiris carried out a similar survey in 1997.

Eiris said: "Avoiding tobacco shares affects the largest amount of charitable investment, but there are a large number of charities employing a range of criteria. A number are also engaging with the companies they invest in as an additional way to pursue their charitable objectives."

It said that six large charities, such as the Joseph Rowntree Charitable Trust, are actively involved in encouraging better corporate ethical performance via engagement.

Charities without an ethical policy said they did not have one because they were concerned about the financial implications, a lack of resources and the complexity involved.

 

 

European Commission paper brings SRI into the mainstream

William Hutchings - 21 Dec 2001

The European Commission's green paper on corporate social responsibility has brought socially responsible investment (SRI) into the mainstream, Morley Fund Management said.

The consultation period for the green paper will finish in ten days time. Paul Moody, a member of Morley Fund Management's eight-strong SRI team, said: "The European Commission is trying to draw together all the initiatives that
are taking place across Europe. The green paper should lead to disclosure legislation that will impact every EU state. It shows SRI is no longer just the interest of a minority."

SRI legislation that requires greater corporate disclosure has recently been passed in Germany and Belgium. Initiatives are under way in France and Sweden. The European Commission is funding a European Social Investment Forum, which was created on November 28.

Moody said: "One in ten of individuals investing in our parent's stakeholder pension product have elected to put part of their money into SRI funds. That's massive." Morley is owned by UK life insurer CGNU.

Moody said Morley's SRI team was involved with a number of high-profile situations this year.

It helped persuade chocolate manufacturers to agree to take responsibility for working conditions across the production chain, from harvesting onwards, following the sighting of a ship carrying slave children off the coast of West Africa in April.

Morley contributed to successful pressure on 42 pharmaceutical companies to settle a dispute with the South African government out of court. The companies had sued over breach of drug patents. As a result of the settlement, the companies agreed to offer essential AIDS drugs to South
Africa at affordable prices. In August, shareholder pressure and positive SRI engagement from Morley played a role in Balfour Beatty's decision to pull out of the Ilisu dam project. The project threatens the livelihood and land of large numbers of Kurdish people. It has also been linked to accusations of ethnic cleansing.

Most recently, Morley and other institutional investors launched a statement of concerns raised by the presence of a military dictatorship in Myanmar (formerly Burma) and highlights the risks to shareholders investing in companies that have interests in the country. Collectively, the group represents almost £400bn (EUR650bn) of funds under management.