Charity FDs welcome social investment

New guidance to be issued by the Charity Finance Directors’ Group concludes that socially responsible investment is legal and ‘can be incorporated into sound models of financial return’.

The publication, Unlocking Socially Responsible Investment, finds that this kind of investment helps charities to fulfil their mission by treating investment as another manifestation of their aims and values, and through direct shareholder activism.

It can also play a vital part in maintaining charities’ reputations through minimising possible conflicts between investments and charitable objectives, and the potential for alienating supporters, staff and beneficiaries.

The report also concludes that rules and guidance on SRI currently in place provide trustees with a broad legal framework in which to operate.

The rapid growth of the SRI market has led to the development of well-crafted SRI policies that can now meet charities’ financial aims, showing comparable or better returns than a policy that looks only at financial maximisation.

David Membrey, acting chief executive of the charity FD group, said: ‘We believe that SRI is a positive, forward-looking strategy for charity investment, and one that can reap significant mission-related reputational and even financial benefits.