ACF calls on Charity Commission to do more to encourage responsible investment

ACF has today submitted its response to the Charity Commission for England and Wales' consultation on charity investment guidance. 

ACF welcomes the Charity Commission’s interest in this important set of issues, its willingness to listen and engage prior to drafting the final guidance, and the efforts made in this revised version to clarify existing guidance.

However, we ultimately feel that the central problem of the current guidance remains in the revised version proposed – a false binary between ‘responsible investment’ and ‘financial return’. We also feel it risks remaining increasingly out of step with both current practice and societal expectation.

Many charities, including ACF members, are already investing in responsible, impactful and mission-focused ways. Some are field-leaders in ethical and responsible investing. The Charity Commission should seek to encourage charities to use all of their assets for public good. Given that there is no longer a basis for seeing responsible investing as in any way contradictory to strong financial performance, this is a moment for the Commission to be bolder in its guidance to trustees – not just enabling a permissive environment (which should be a bare minimum), but one of encouragement and raised expectation.

Rather than having to justify a responsible approach to investment, charities should be encouraged to pursue this approach as a starting point – straying from that course only if they can justify an alternative. In our view, societal expectation and financial prudence will demand that charities invest more intentionally and responsibly in the years ahead.

The proposed changes may have a fairly limited impact in either persuading or dissuading charities from working differently to how they do already. That would be a missed opportunity, at a time when societal expectations and charities’ appetites to deploy their resources for maximum public benefit is greater than ever.

Our key points are:

  • The terminology used in the proposed guidance is problematic, conflating responsible with more intentionally programmatic or mission-aligned investment
  • The guidance should be reframed – particularly to reflect the difference between more intentional programmatic and mission-aligned investment as distinct from more general responsible investment approaches
  • The guidance should reflect evidence that ESG-focused responsible investment is not in conflict with strong financial return, but a methodology for achieving it
  • We commend the 2018 guidance of the Scottish Charity Regulator (OSCR), which we believe has clearer wording and could be built on in the Charity Commission guidance

The consultation closes on 20 May 2021. Submissions can be made via this page.

ACF's full response is here. This response took account of ACF's Stronger Foundations' report on Investment from 2020, and our earlier response to the Charity Commission's listening exercise. ACF also held an event for members with the Charity Commission on 4 May. 


To contact the Association of Charitable Foundations for points of clarification or follow up, please email Max Rutherford, Head of Policy, on

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