Looking to invest responsibly? Find resources here

Earlier this year, the Butler-Sloss v. Charity Commission high court case confirmed that foundations can invest their endowments responsibly. That is, they are not required to invest solely on the basis of seeking maximum financial returns. Trustees can take into account other non-financial factors including their charitable purpose and reputation.

In the case of the Ashden Trust, this meant ensuring their investments were compatible with the ‘net zero’ climate goal. There are many other examples: Lucent is currently working with Access – the Foundation for Social Investment, which already invests its endowment for positive impact.

Climate change is not the only issue which the high court judgement covers, but it is pertinent to all foundations and charities that hold investments.

In light of the high court judgement, many will be asking: what do we need to do next? For those at an early stage, the following links should help you get a handle on the issues quickly.

The high court judgement

Luke Fletcher from BWB, the law firm which acted for the claimants, has summarised the judgement.

Richard Hebditch from ACF, the umbrella body for foundations, has also written an overview of what it means for foundations.

The judgement itself is here.

The Charity Commission response

As a result of the high court judgement, the Charity Commission is expected to review its formal CC14 investment guidance. In the meantime, their response to the judgement was positive.

Best investment practice

ACF’s Investment: The Pillars of Stronger Foundation Practice.

The Impact Investing Institute Investing-with-Impact-in-the-Endowment.pdf (impactinvest.org.uk)

Climate change

Around 100 funders have signed up to the Funder Commitment on Climate Change and ACF published a report on progress with many case studies from foundations at different stages of their journey.

The Environmental Funders Group has a dedicated climate funding group for trustees and staff to meet. EFN regularly publishes articles on climate philanthropy