The majority (92%) of UK charities believe it is important that when selecting investments they have strong Environmental, Social, and Governance (ESG) credentials.
This is according to research from Rathbones, which also found that over the next three years, 50% of senior charity executives said ESG will become more important when selecting investments, and 47% said it will become significantly more important.
Additionally, 47% of the charity executives surveyed said that their list of investment exclusions has increased over the past two years, with environmental degradation the top exclusion.
However, only 6% of charities said that they are very effective at screening out potential investments that do not meet their exclusion policy. Over three quarters (78%) said they are quite effective and 16% only rate their charity as ‘average’ at screening out potential investments that do not meet their exclusion policy.
Rathbones head of charities Andy Pitt said: “Despite increasing noise around a move away from ESG, our research shows that this is more important than ever for charities, and charity leaders are increasingly wanting to align investment portfolios to their values and purpose.
“This growing emphasis on ESG isn’t just about meeting regulatory expectations or keeping pace with peers – it reflects a deeper commitment to protecting mission integrity. Charities are telling us they want partners who can provide tailored, values-driven investment solutions that go beyond simple exclusions, and offer proactive strategies that support long-term, sustainable impact.”
More than half (59%) of senior charity executives surveyed said they are very concerned about the ability of their investment management advisers to consistently meet their charity’s ethical requirements.
Only 16% of charities surveyed said their investment management firm offers them a very bespoke service for their charity’s specific needs.
In order to obtain these results, Rathbones surveyed 100 UK charity board directors, finance directors, investment managers and investment directors with a collective £3.7bn of equity investments.
