Ethical Performance
inside intelligence for responsible business


an investment business built on an ethical approach

July 2007

Having the Church of England as its core client has required CCLA Investment Management to keep at the forefront of investment research into issues as diverse stem cells and the relationship between farmers and supermarkets. Neville White talks to Mike Scott

For many SRI investment funds it can be difficult to square the ethical stance of the fund with the rest of the organization. But for CCLA, ethics are central to everything it does.

‘The starting point is the client,’ says Neville White, SRI manager at CCLA, a stance that carries weight when 60 per cent of your £4.7billion ($9.4bn) business is investing the assets of the Church of England and the rest involves looking after money from charities and local authorities. ‘Ethical considerations are very important to our clients,’ White adds. The Church is the core client, while charities ‘have historically piggybacked on what we do for the Church’, he says. The Church link has also attracted other clients.

Investment on behalf of the Church operates slightly differently to CCLA’s other work. Its investment policy excludes companies involved in armaments, gambling, tobacco, alcohol, pornography, stem cells and doorstep lending.

For the COIF Charities funds, the company has to take a more pragmatic approach. ‘We are allowed to have exclusions, but we are limited on how much we can exclude for fiduciary reasons, so we exclude only armaments, gambling and tobacco,’ White says. However, a more discretionary approach according to a particular client’s needs is available through the group’s segregated funds.

Engagement is an important part of CCLA’s work on three levels, says White. ‘Reactive engagement comes in response to issues that hit the headlines and tend to be risk-driven. A recent example was the row over the BA employee wearing the Cross at work. Then there is proactive engagement, where we identify a risk and engage with companies on that issue. On palm oil, for example, we started with the threat to habitats and then looked at whether food and energy businesses were involved and their sources of palm oil.’ Finally, CCLA undertakes research on behalf of the Church, looking at general subjects such as the use of stem cells – ‘the Church wanted to understand what the investment issues were’ – and more specific studies of how, for example, businesses are reacting to HIV/Aids.

Another example, which White believes illustrates CCLA’s ability to focus on research that no one else is doing, looked at the relationship between farmers and supermarkets. ‘The Church of England is a unique and very specific client – in this case, the research was important because the Church is both a very large land-owner and a significant investor in supermarkets. We try to do work not replicated elsewhere.’ The backing of the Church allows CCLA to punch above its weight when it comes to engagement.

Perhaps surprisingly, CCLA has not previously invested specifically in poverty reduction and social development projects. However, this may change. ‘There is scope to co-operate with other churches and we may invest in areas where the return is not as high as elsewhere, but it is part of our social gift,’ White says. ‘There are lots of opportunities, especially in microfinance.

‘CCLA goes against the prevailing wisdom that the bigger you are, the more influence you have. You can be influential if you have the expertise, dedication and quality.’


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