Having the Church of England as its core client has required CCLA
Investment Management to keep at the forefront of investment research
into issues as diverse stem cells and the relationship between farmers
and supermarkets. Neville White talks to Mike Scott
For
many SRI investment funds it can be difficult to square the ethical
stance of the fund with the rest of the organization. But for CCLA,
ethics are central to everything it does.
‘The starting point
is the client,’ says Neville White, SRI manager at CCLA, a stance that carries
weight when 60 per cent of your £4.7billion ($9.4bn) business is
investing the assets of the Church of England and the rest involves
looking after money from charities and local authorities. ‘Ethical
considerations are very important to our clients,’ White adds. The
Church is the core client, while charities ‘have historically
piggybacked on what we do for the Church’, he says. The Church link has
also attracted other clients.
Investment on behalf of the
Church operates slightly differently to CCLA’s other work. Its
investment policy excludes companies involved in armaments, gambling,
tobacco, alcohol, pornography, stem cells and doorstep lending.
For
the COIF Charities funds, the company has to take a more pragmatic
approach. ‘We are allowed to have exclusions, but we are limited on how
much we can exclude for fiduciary reasons, so we exclude only
armaments, gambling and tobacco,’ White says. However, a more
discretionary approach according to a particular client’s needs is
available through the group’s segregated funds.
Engagement is an
important part of CCLA’s work on three levels, says White. ‘Reactive
engagement comes in response to issues that hit the headlines and tend
to be risk-driven. A recent example was the row over the BA employee
wearing the Cross at work. Then there is proactive engagement, where we
identify a risk and engage with companies on that issue. On palm oil,
for example, we started with the threat to habitats and then looked at
whether food and energy businesses were involved and their sources of
palm oil.’ Finally, CCLA undertakes research on behalf of the Church,
looking at general subjects such as the use of stem cells – ‘the Church
wanted to understand what the investment issues were’ – and more
specific studies of how, for example, businesses are reacting to
HIV/Aids.
Another example, which White believes illustrates
CCLA’s ability to focus on research that no one else is doing, looked
at the relationship between farmers and supermarkets. ‘The Church of
England is a unique and very specific client – in this case, the
research was important because the Church is both a very large
land-owner and a significant investor in supermarkets. We try to do
work not replicated elsewhere.’ The backing of the Church allows CCLA
to punch above its weight when it comes to engagement.
Perhaps
surprisingly, CCLA has not previously invested specifically in poverty
reduction and social development projects. However, this may change.
‘There is scope to co-operate with other churches and we may invest in
areas where the return is not as high as elsewhere, but it is part of
our social gift,’ White says. ‘There are lots of opportunities,
especially in microfinance.
‘CCLA goes against the prevailing
wisdom that the bigger you are, the more influence you have. You can be
influential if you have the expertise, dedication and quality.’
