At EdenTree, our advice for any charity investing responsibly and sustainably for the first time is to think about the broader mission of your organisation and the ways you would like your investments to reflect that. There is a huge level of circularity here that makes a lot of sense for charity investors. If you invest in the companies with the outcomes your charity itself focusses on, you are contributing to your goal in more ways than one. This is a topic that has become increasingly prevalent amongst our client base and network, notably amongst animal charities.
As charities involved in the care and protection of animals; how can this important mission be aligned to your reserves and investments? Certainly, it would make sense to consider not investing in companies that use animals to test cosmetic or household products. A negative screen such as this can be implemented by your investment manager. Indeed, EdenTree’s own Amity Funds adopt an animal testing policy, which is aimed at avoiding the unnecessary use and exploration of animals where alternatives to animal testing exist. However, a charity’s mission can be affected by more than one issue. How might the effects of climate change, for example, impact your animal charity? As a charity focused on wildlife or tropical animals, surely the increased risk of heat and the reduced availability of suitable habitats, caused by climate change, can have detrimental effects?
For a number of animal charities and wildlife organisations, this is already a very real and pressing concern. Dr Nikhil Advani, Director at World Wildlife Foundation (WWF), says ‘we need to understand how climate change could harm the various species we’re trying to protect.’ To adequately address this crisis, WWF writes, ‘we must urgently reduce carbon pollution and prepare for the consequences of global warming’. EdenTree have been considering the implication of climate change as an asset manager for many years and our fund’s present a ‘carbon aware’ solution for investors. This includes carbon footprinting our equity funds and publishing the information for clients.
Animal welfare is another interesting area where a charity may find its core activities and values are misaligned with its investments. The EdenTree Amity range of funds take an exclusionary approach with our negative screen on intensive farming. This is aimed at avoiding the worst instances of the use and exploitation of animals during food production. In keeping with this approach, EdenTree has been a supporter of the Business Benchmark on Farm Animal Welfare (BBFAW), the first global measure of company performance on animal welfare, since inception, and was part of the pioneer investor group that provided input on the development of the benchmark criteria.
So how can animal charities move forward, closing the gap between their mission and the way their money is invested? For those that are understandably nervous about investing for the first time, and indeed doing so responsibly and sustainably; don’t feel pressured to invest all of your assets at once. We’ve seen great examples of clients undertaking a progressive learning exercise, investing some of their long term cash, building experience along the way and adding investment at a later date. The myth that you cannot gain a return from investing responsibly and sustainably will likely start to prove itself wrong. Secondly, don’t make size an issue. EdenTree’s charity funds, for example, have a minimum investment size of £1,000, designed to allow charities of all sizes to invest, so there are solutions out there. Thirdly, don’t make a leap you are not ready for. There are low risk, highly liquid options out there that can yield double the returns of a ‘safe’ high street bank. EdenTree’s Amity Short Dated Bond Fund is a good example of this, as it currently yields c1.2%, where most banks offer 0.6%, with the short dated bonds ensuring steady income and high liquidity.
Certainly it is right for animal charities to focus on their mission and values; however there is so much more your assets can do to solve some of society’s biggest problems, and certainly not contribute to the problem. In todays’ current climate we need charities and the services they offer more than ever. Adopting an even more holistic approach can ensure your animal charity’s aims are being fulfilled, not only through grants and projects, but directly through your well-aligned investment portfolio.
This document has been produced for information
purposes only and as such the views contained herein are not to be taken as
advice or recommendation to buy or sell any investment or interest thereto.
A full explanation of the characteristics of the investments is given in the Key Investor Information (KII). Any forecast, figures, opinions statements of financial market trends or investment techniques and strategies expressed are unless otherwise stated, EdenTree Investment Management own at the date of this document. They are considered to be reliable at the time writing, may not necessarily be all -inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecast made will come to pass. Please note that the value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations, you may not get back the amount originally invested. Past performance is not necessarily a guide to future returns.
EdenTree Investment Management Limited (EdenTree) Reg. No. 2519319. Registered in England at Beaufort House, Brunswick Road, Gloucester, GL1 1JZ, United Kingdom. EdenTree is authorised and regulated by the Financial Conduct Authority and is a member of the Investment Association. Firm Reference Number 527473.
 Source: EdenTree 30th September 2019
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