The Church of England and ethical investing

The Church of England is taking an increasingly hands-on role in its investment, for example managing its own property assets worth over 1.1 billion pounds. This has exposed some embarrassing investment decisions while making the Church more intentional about connecting its portfolio to the Church’s witness.


The global financial crisis has strengthened the Church of England’s drive for more ethical business practices by making companies and shareholders more receptive to change, according to the man who manages its investment fund.

With about 5.5 billion pounds ($8.8 billion) of financial and property assets, the Church has greater clout than many hedge funds. But it has often struggled to make its voice heard.

That is starting to change, according to First Church Estates Commissioner Andreas Whittam Smith.

“It’s on both sides,” he told Reuters in his wood-panelled office in the shadows of London’s Westminster Abbey. “It’s not only companies considering whether they are behaving as they should as good citizens,” it’s also investors preparing to line up alongside the Church to promote better behaviour, he said.

Ethical investing is not without cost. It is estimated that about 0.7 percent a year of growth was lost to “opportunities foregone”.

But the Church’s fund still made a return of 9.7 percent last year and stands firmly by its decision to sell out of News Corp in 2012 and mining company Vedanta in 2010, unhappy with how the companies were run.

So while things are going well, there is plenty of uncertainty out there.

Whittam Smith was confident the portfolio was faring well this year and would again beat its annual growth target of five percentage points over the rate of inflation, with much of the income used to pay clergy pensions and support Church work.

“I believe we will exceed that this year,” he said.

He said the Church fund was looking to invest in infrastructure projects either in Britain or overseas, increase investment in private equity, and had considered investing in Brazil but had veered off that idea for now.

Asked what kept him awake at night, Whittam Smith expressed deep concerns about the fiscal impasse in the United States.

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