Church Investments and Shareholder Responsibility: The Church as Active Investor

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Church Investments and Shareholder
ResponsibilityThe Church as Active Investor

• Workshop on Churches, Civil Society,
  Multinational
• Companies and Corporate Responsibility in Central
• and Eastern Europe
• 19 21 October 2006
• John Cunningham
• Chair Church Investors Group UK
• Diocesan Finance Secretary, Diocese of Plymouth UK

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The Church as Active Investor Background

• Plymouth Roman Catholic Diocese, England
• Financial Secretary responsible for all the
  financial affairs of the Diocese, including
  investments
• Invested funds of about 40million, (including
  cash) for the central funds of the Diocese and
  its parishes

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The Church as Active InvestorEnglish Civil Law

• Assets held by Trustees who have a fiduciary duty
  of care when investing
• They cannot behave as if they owned the assets on
  their own account
• The law recognises that the stakeholders in the
  Trust have a right to expect certain standards
  and ethics being applied when investing

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The Church as Active Investor Diocesan policy
avoid the following

• Companies that have abortion, euthanasia as a
  major role
• Complaints that exploit labour force in
  unjustifiable way
• Companies which have operations in areas of
  oppressive regimes where the operations
  contribute to the oppressive natures of regimes
• Have manufacture of arms/weapons as a core
  activitiy
• Are involved in pornography or obscenity
• And due regard shall be given to environmental
  concerns

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The Church as Active Investor Use of external
fund managers

• We cannot do it in-house.
• Need to have a firm and articulate brief when
  instructing experts
• Important role of EIRIS
• Accountability and reporting of fund managers
• Accountability and reporting of Trustees to
  stakeholders

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The Church as Active Investor Limitations on
small institutions as ethical investors

• Diversity of responsibilities of appropriate
  personnel
• Difficulty in-monitoring compliance
• Voting
• - Engaging
• Lack of impact at corporate level eg total market
  capitalisation of BP 114,407,000,000
• Need to combine to achieve impact

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The Church as Active Investor My role of chair
of UK Church Investors Group

• 30 year background of CIG
• Relaunch in 2005. membership with combined
  invested assets of 10billion
• All members contribute if only by subscription
• Ecumenical witness and power of working together
• - letters
• - presentations
• - delegations
• Reporting back to all members
• International contacts