To join the coalition, please email n.birkett@bwbllp.com, noting whether or not your organisation is a charity.

Bates Wells have been supporting and advising a coalition of leading charities who are calling on the Charity Commission and Attorney General to seek a landmark ruling on whether and how charities should align their investments with their objects and their duty to provide public benefit. The coalition includes NCVO, RSPB, ClientEarth, Joseph Rowntree Charitable Trust, Nesta, Ashden Trust and Access.

The law on charity trustee investment duties was last considered nearly three decades ago. Since that time, case law has been overtaken by a dramatic increase in the scientific evidence about the impacts of climate change, as well as important legislative and market developments. It is the view of Bates Wells and the coalition that the law in this area is seriously outdated and that a Tribunal of the present day, faced with current evidence, would conclude that charity trustees should invest in a manner which intentionally reflects their charities’ objects, strategy and values, with a view to public benefit.

Charity Commission guidance is based on case law dating back to a time before climate change was an important public policy issue and before charities were seriously wrestling with questions about whether their aims could be undermined by their investments, for example in companies with carbon-intensive activities, offering payday loans, or marketing high sugar foods to children. In October 2018, the UN Intergovernmental Panel on Climate Change warned that the world has just 12 years to limit climate change to 1.5°C. Even an extra half degree would create risks for hundreds of millions of people.

As Lord Williams of Oystermouth, the former Archbishop of Canterbury, has said in support of the coalition:

“Investment policy has become a crucial area of moral debate at a time when we are at last recognising the urgency of issues around climate change. It is now of real importance that charity law should be clarified in a way that acknowledges the need to align investment practice with the imperatives of responsibility to and for our global environment.”

Today, the coalition have sent open letters to the Charity Commission and Attorney General urging them to refer these difficult charity law questions to a Tribunal. A reference would be made using powers in the Charities Acts and would seek clarity on whether and how charities should align their investments with their objects and with their wider obligations to provide public benefit.

Professor Nicholas Stern, Chair of the Grantham Research Institute on Climate Change and the Environment and author of the Stern Review, has also said:

“Charities exist for the public benefit and it is entirely logical that their investment decisions should also promote the public benefit. Over the coming decades the world will make massive investments in the global economy, particularly in infrastructure and productive capital. How we make those investment decisions is critical for the future of our planet. We will either lock in sustainable prosperity or follow something like current paths which would involve unprecedented environmental risks for our children and grandchildren. The new and cleaner form of growth will be sustainable and inclusive, and very attractive, and the associated investments are likely to show a better risk-return profile for charities than those in old-fashioned, dirty and risky activities. Charities can and should lead by example, and need stronger and clearer guidance on their investment decisions.”

Luke Fletcher, Partner at Bates Wells, who drafted the letter, said:

“Members of the coalition have a real commitment to seek a landmark judgment on responsible investment. They believe the Charity Commission should take the lead by making a reference to the Tribunal itself. However, if it is unwilling to do so, it seems only a matter of time before the matter comes before the courts on the motion of an individual charity which needs to see the uncertainty resolved.”

Join the Coalition

The coalition is now asking others who wish to see legal clarity on these questions to sign up and join the coalition.

To add your organisation’s name to the coalition, please email n.birkett@bwbllp.com, noting whether or not your organisation is a charity.

Click here to read the Charity Commission open letter and here to read the Attorney General open letter.

Members of the Coalition
The coalition, which is growing quickly, currently comprises:

Access – The Foundation for Social Investment

The Ashden Trust

B Lab UK 

Britain Yearly Meeting of the Religious Society of Friends (Quakers)

Bristol Quakers

Carbon Tracker

CAN (Helen Taylor Thompson Foundation)

The Centre for Innovation in Voluntary Action

ClientEarth

The Ecumenical Council for Corporate Responsibility (ECCR)

EQ Investors

Epoch Wealth Management LLP - Chartered & Accredited Financial Planners

EIRIS Foundation

Ethex

Future Fit Foundation

Friends Provident Foundation

Friends World Committee for Consultation

Friends Trusts Limited

Gower Street

Golden Bottle Trust

Human Organising Co Limited

I.G. Advisors 

The JJ Charitable Trust

Joseph Rowntree Charitable Trust

Joffe Charitable Trust

Lankelly Chase

The Margaret Hayman Charitable Trust

Millfield House Foundation

The Mark Leonard Trust

The National Council of Voluntary Organisations

Nesta

On Purpose

Panahpur

Pensions for Purpose

Positive Money 

Ten Years' Time

The Polden-Puckham Charitable Foundation

Royal Society for the Protection of Birds

The Solberga Foundation

The EQ Foundation

The Stockwell Charitable Trust

Transformational Business Network International

Treebeard Trust

Thirty Percy Foundation

Work for Good

Zing Foundation


Luke Fletcher photo

Luke Fletcher

Partner

T
+44(0)20 7551 7750

E
l.fletcher@bwbllp.com
View full information about Luke Fletcher

Posted on 04/03/2019 in Legal Updates

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