CFG Investment Conference 2012 Ethical Investment Edward Mason Secretary Church of England Ethical Investment Advisory Group (EIAG) Ethical Investment Advisory Group

The EIAG advises the three National Investing Bodies of the Church of England on ethical investment and conducts ethical investment activities on their behalf. £8bn of endowment and pension fund assets held by: The Church Commissioners for England The Church of England Pensions Board The CBF Church of England Funds (managed by CCLA) EIAG - purpose

Voting members appointed by National Investing Bodies, Archbishops’ Council, General Synod, Mission and Public Affairs and co-option Appointed members bring investment, theological and ethical expertise Co-opted members bring specialist expertise Executives of Investing Bodies attend and but cannot vote EIAG gives advice that is independent, high quality and representative of opinion in the Church - and applicable to fiduciary investment management EIAG - membership

EIAG - activities Screening against revenue thresholds for: indiscriminate weaponry (0%), pornography (3%), conventional weaponry (10%), tobacco (25%), gambling (25%), high interest rate lending (25%) Standards-based screening: responsible alcohol, corporate governance (News Corp), relations with communities (Vedanta), human rights, environment, employment practice, hedge funds Engagement e.g. companies attracting beneficiary concerns Proxy voting e.g. executive remuneration Public policy e.g. climate change, Kay Review, Groceries Market Adjudicator

EIAG - resources Secretariat with two/three staff Screening and ESG research contract with research provider Proxy voting contract with proxy advisor Memberships of UN PRI, UKSIF, IIGCC & Church Investors Group Collaboration with other asset owners and managers ‘Trade press’: Responsible Investor

How can a charity start out? Know your values Know your investment philosophy Tell your consultants Tell your asset managers Join an organisation that can help you Read media that can help you

Will it cost investment returns? It depends… Ethical approach affects National Investing Bodies’ short-term performance but not long-term ability to generate required returns UK impact over last 11.5 years: -0.6% p.a. But over 3, 15 & 20 years Church Commissioners have beaten their annual long-term target return of RPI +5% Over all periods longer than 1 year, Church Commissioners have outperformed their peer group (WM All Funds)

Can you afford not to have an ethical policy? We can’t Can you?