# Charity Commission consults on draft guidance for responsible investments

- Link: https://fundraising.co.uk/2021/04/12/charity-commission-consults-on-draft-guidance-for-responsible-investments/
- Published: 2021-04-12T10:15:23+01:00
- Author: Melanie May

**The Charity Commission is asking for views on newly published draft guidance for
making responsible investments.**

‘Responsible investments’ refers to financial investments that align with a charity’s
mission and purpose. The regulator announced the review earlier this year, after
an informal listening exercise found that the way responsible investment is outlined
in its [existing guidance](https://www.gov.uk/government/publications/charities-and-investment-matters-a-guide-for-trustees-cc14)
does not give all trustees sufficient confidence that they can consider, or that
the Commission supports, this approach to investment.

It has now published a [draft of updated guidance](https://www.gov.uk/government/consultations/charity-responsible-investment-guidance)
and is asking charities and others to feed back on whether the changes are clear,
and make the guidance easier to use. The consultation runs for six weeks until 20
May.

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Under the draft guidance trustees of all charities can decide whether or not to 
adopt a responsible investment approach that reflects the charity’s purposes and
values, and not just focus on the financial return. The new draft explains that 
the rules applying to responsible investments are those that apply to all financial
investments, including that trustees’ decisions must always be made in the best 
interests of the charity, and in line with its governing document. The guidance 
also highlights the slightly different rules that apply when charities invest permanent
endowments.

Paul Latham, Director of Communications and Policy at the Charity Commission said:

> “During the listening exercise we held last year, we learnt that many charities
> are interested in considering responsible investments but need more clarity around
> the regulatory position.
>  
> “We have worked hard to ensure our draft guidance is easy to understand and empowers
> trustees to make decisions that are right for their charity.
>  
> “I encourage trustees, charity staff, those involved in investment management,
> and anyone with an interest in how charities are run to take part in our consultation,
> to help ensure our final guidance is as clear and empowering as possible.”

The guidance is part of the Commission’s wider guidance on Charities and Investment
Matters, which is not yet being updated. According to the Commission this is because
it recognises an urgent need to first address concerns about the clarity of its 
existing guidance around responsible investments.