Equities
Equity investment refers to the ownership of a share in a company. Charities could adopt a positive screening, negative screening and/or engagement approach to equity investments. It is possible to invest directly in companies and through a pooled investment fund.
In this section:
Responsible Investment Issues
How Responsible Investment operates
Responsible Investment Issues
Equity investments have been the focus of most Responsible Investment activity. Research is available on the social, environmental, governance and ethical performance of most publicly quoted companies. Investors can use the research to make decisions on companies to avoid or support.
It is also possible to use the ownership rights that come with equity investments to engage with companies or vote on issues of concern.
How Responsible Investment operates
The Responsible Investment options for equities depend on whether a charity invests through pooled funds or through a segregated approach.
Segregated investments
It is possible to develop a bespoke policy by which the fund manager will screen equity investments (on both positive and negative criteria) in line with a charity’s policy. Fund managers also engage with companies. Advisers may be able to help charities examine the engagement policies and records of fund managers when deciding on which fund manager to employ.
It is also possible to invest directly in companies. Charities, advisers and fund managers may wish to use the services of a research provider – such as EIRIS or Ethical Screening – to determine which companies meet certain ethical criteria.
Pooled investments
There are several equity funds, including common investment funds and retail funds, which employ responsible investment criteria. The Database of funds and fund managers provides some examples.
