Consultation outcome

Charity responsible investment guidance

Applies to England and Wales

This consultation has concluded

Detail of outcome

We’ve published our refreshed investment guidance for charity trustees.

Feedback received

Detail of feedback received

We received 211 responses to this consultation and we are pleased to publish a summary of your views in the document above. Thank you to everyone who participated.

Original consultation


Charity Commission consultation on the clarity of draft revised guidance about adopting a responsible (or ‘ethical’) approach to investing charity funds.

This consultation ran from

Consultation description

This consultation seeks views on the clarity of draft revised guidance for charity trustees about adopting a responsible (or ‘ethical’) approach to investing their charity’s funds.

Geographical scope

The guidance is relevant to charities in England and Wales, whether or not they are registered with the Charity Commission for England and Wales.

Basic information

This is a public consultation and anyone with an interest in the proposals may respond.

This consultation will be of particular interest to charities that invest some or all of their funds. We are keen to receive responses from trustees of these charities, as well as from advisers and investment professionals.

How to respond

This consultation has now closed.

Charity investments – background

All charities can invest. For some charities, investments can be a major source of funding: for many others, however, investments play a smaller role

The applicable law on charity investments depends on factors such as:

  • the charity’s legal form (trust, company or charitable incorporated organisation)
  • the scope of investments to be chosen
  • the duties and responsibilities to be followed in relation to investing
  • any investment restrictions set out in the document which governs the charity

Trustees are responsible for how they invest their charity’s assets, and it is not for the Commission, as a regulator, to tell trustees what they should do.

However, the Commission does provide guidance for trustees, to help them understand and comply with the law as it applies to their charity.

Responsible investment and the need for clearer guidance

Trustees have long had the option to make financial investments in ways that align with their charity’s purpose and values. Previously labelled ‘ethical investment’ we now refer to this as ‘responsible investment’.

Examples include:

  • a health charity avoiding investments in businesses whose products are harmful to health (‘negative screening’)
  • an environmental charity choosing to invest in the renewable energy sector (‘positive screening’)
  • a human rights charity using its shareholder rights to influence company practice (‘stakeholder activism’)
  • a heritage charity avoiding investments in fossil fuels because the trustees have evidence that this would damage its reputation, reduce donations and not be in the charity’s best interests

Our current guidance – Charities and investment matters: a guide for trustees - ’CC14’ – describes the legal framework, duties and discretions that trustees have when investing their charities’ funds.

In January 2020, the Charity Commission began a listening exercise to help it understand the barriers that may deter trustees who wish to make responsible investments from doing so.

A number of respondents to that exercise identified the Commission’s investment guidance as one of those barriers.

Several reasons were given, including:

  • that some trustees felt they are unable to make responsible investments, because they perceive they have an overriding legal duty to maximise the financial returns when investing, regardless of any other consideration
  • that there is insufficient assurance that trustees can decide to take a responsible approach to investment
  • a perception that the Commission does not accept that trustees can comply with their duties fully if they adopt a responsible investment approach
  • that some felt that the guidance lacks practical advice.

Our guidance should give trustees confidence about the options open to them for investing their charities’ funds and about making investment decisions that serve their charities’ best interests within the limits of the law. It was clear from the responses that we need to revise and clarify our guidance to minimise the risk of misunderstanding.

Revised draft guidance

We have therefore developed an updated draft of the opening sections of our guidance: these include an explanation of trustees’ ability to adopt a responsible investment approach.

In the existing guidance, these matters are covered in:

  • section 1 - Executive Summary
  • section 2 - Introduction
  • section 3 - Legal Framework for Financial Investments

It is proposed that these would be replaced by revised sections. In drafting these revised sections of the guidance, we have aimed to describe in clear, simple language:

  • the duties that trustees have when making financial investments
  • the discretion trustees have to decide whether or not to adopt a responsible investment approach

The remainder of the guidance has not been updated, except for changes needed to reflect the alterations to the opening sections. This is because we want to address the issue of responsible investment first, which the sector tells us is an important and pressing issue, and consult to ensure that this part of the guidance is improved, before moving onto the remainder of CC14.

We will move to a full redesign of the rest of our investment guidance once we have completed the consultation and publication of the revisions to the section on responsible investment. The result of the redesign, which we will test with trustees, will be to improve the clarity of the guidance, using the same simpler style of this draft opening section on which we are now consulting.

For the purposes of this consultation, we are therefore inviting comments only on the revised content, not on other parts of CC14. We have nonetheless made available a version of the full guidance showing the new text, together with a table of amendments.

Although it is not part of the consultation, we have made available, for information, our legal underpinning that shows our refreshed interpretation of the law.


We are consulting on this draft revised guidance to understand whether it will:

  • provide greater clarity about the discretion trustees have to make responsible investments
  • reassure trustees that they can decide to adopt a responsible investment approach in most circumstances

Our consultation questions therefore seek to test the clarity of the new guidance and its treatment of responsible investment.

Update 5 May 2021

On 14 April two charities were granted permission to bring a case relating to responsible investments to the High Court. The two charities seek clarification of the law, and we expect that there will be a court hearing later this year.

In the meantime, the Commission is continuing with this consultation, and we encourage charities and others to respond. We still plan to publish a summary of the consultation responses in the summer. As the court’s decision may affect our draft guidance we will consider any further steps once the court has given its judgment.

Read our Privacy Notice which explains how we process personal data when you respond to one of our consultations

Consultation questions

Question 1

As a result of reading this draft guidance, how clear are you about the duties and good practice that apply to decisions about a charity’s financial investments, whether or not the charity adopts a responsible investment approach?

Question 2

As a result of reading this draft guidance, how clear are you about what a responsible investment approach is?

Question 3

Is the phrase ‘responsible investment’ an appropriate term for the approach to investing in line with a charity’s purpose and values?

Question 4

How confident would you be, as a result of reading this draft guidance, that adopting a responsible investment approach is a valid option?

Question 5

In the section ‘Check if extra rules apply’, we say that there are some situations where a responsible investment approach can be taken only if at least one of five tests is met.
As a result of reading this draft guidance, how clear are you about when these tests are relevant to the decision to take a responsible investment approach?

Question 6

Do you have any other comments to make on the draft guidance?


More information: legal underpinning

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Published 8 April 2021
Last updated 1 August 2023 + show all updates
  1. Consultation outcome published.

  2. Summary of consultation responses added.

  3. Updated 'consultation' section to say that on 14 April two charities were granted permission to bring a case relating to responsible investments to the High Court. We expect that there will be a court hearing later this year. The Commission is continuing with this consultation, and we encourage charities and others to take part.

  4. First published.