By Clare Fussell, Campaign Director, Operation Noah

I recently received this thoughtful (and frequently asked) question from a supporter: 

Our charitable objects are for ‘the advancement of the Christian religion for the benefit of the public’ – can I have a simple, Charity Commission-proof argument as to how putting money into possibly riskier investments, or accepting lower returns, can align with these charitable objectives whilst fulfilling our fiduciary responsibility?

Below are principles to share with your Finance Committee as you advocate for investment in climate solutions – even when such investments are potentially riskier or offer lower returns (though they often don’t!) – in a way that aligns with charitable objectives and fiduciary duty.

1. Theological and Moral Principle of Creation Care

The ‘advancement of the Christian religion’ entails more than the promotion of church attendance – it involves the lived expression of Christian values. Care for God’s creation is a core tenet of Christian theology, reflected in Genesis 2 and in many of the Church’s teachings, from Pope Francis’s encyclical Laudato Si to the Anglican Church’s Fifth Mark of Mission, which is, ‘To strive to safeguard the integrity of creation, and sustain and renew the life of the earth.’ 

Investing in climate solutions is a tangible expression of Creation Care, acknowledging the moral imperative to address environmental degradation, protect vulnerable communities, and steward the Earth responsibly. By directing resources toward climate solutions, the church embodies its theological commitments, thus fulfilling its object to advance the Christian religion.

The church’s investment choices are also a form of public witness. Aligning a Church or diocesan financial portfolio with climate action demonstrates integrity and leadership, inspiring others and reinforcing the relevance of Christian faith in addressing today’s existential challenges. It enhances the credibility of the Church’s public voice on justice and creation care, and thereby advances the Christian religion in the public consciousness and discourse. 

This was certainly the case in the fossil fuel divestment movement, through which nearly every major UK church denomination has now divested, as it led to significant public recognition, including the Church of England divestment commitment making headlines around the world.

2. Public Benefit and Intergenerational Justice

The charitable object is ‘for the benefit of the public’. If distilled down to a soundbite, our Christian ‘object’ might rightfully be argued as being to ‘love God and love our neighbour. Climate change disproportionately affects the poor, the vulnerable, and future generations. It strips lives and livelihoods from our global neighbours, as well as imperiling lives closer to home. Supporting solutions to this global crisis serves a broad and urgent public good by:

• Mitigating long-term environmental and social harm to all of God’s children, particularly the poorest and most vulnerable
• Advancing justice and peace, which are both central themes of the Gospel and Christian mission
• Promoting health, food security, and sustainable livelihoods

Investment in climate-positive ventures, even if they achieve lower financial returns, delivers substantial social and environmental returns, which can justifiably be considered part of the ‘public benefit’ mandated by the charitable object.

3. Fiduciary Duty: Risk, Return and Ethical Consistency

Charity trustees must act prudently, in the charity’s best interests, and in line with its objects. But fiduciary duty does not require maximising financial return at the expense of mission alignment. 

The UK Charity Commission and other regulators recognise that:

• Trustees can consider non-financial factors, such as ethical and mission alignment, in investment decisions
• Investments that further the charity’s purposes (so called programme-related or mission-aligned investments) are legitimate, even with lower financial yield or greater risk, provided they are made prudently

See below for evidence and discussion of the High Court ruling over charities’ fiduciary and environmental duties:

• Charity trustees can choose planet over profit, High Court rules | The Independent
• Charity trustees’ powers of investment: Does the Butler-Sloss decision change the law?
• Momentous ruling by the UK High Court | CCLA

By investing in climate solutions:

• The church avoids the reputational, ethical, and potentially long-term financial risk of supporting carbon-intensive industries
• It aligns its financial strategy with its mission and values, helping to build a safer future
• It acts in a way that reflects its holistic stewardship of finances, the planet, and the Gospel message

Furthermore, in many cases, Churches have found that green investments don’t equate to lower returns. For example, as countries around the world move to decarbonised electrification and modern, fossil-free grids, there are huge gains to be made in financing this transition. 

Some organisations have a track record which would even suggest that aligning investments with faith values can result in better long-term financial performance, improved risk management, lower costs, or a combination of these benefits. Others think it makes no difference in the long-term performance of their investments. The discussion on performance should include faith leadership, investment leadership, the governing board overseeing Church assets, and investment consultants to ensure a comprehensive and informed dialogue.

The good news is that green investments are now matching, if not outperforming, other investments. This blog from FaithInvest looks at the year-end report of a performance benchmark provider showing that the ESG-screened (Environmental, Social and Governance-aligned investments) index performance over the 5 years to 2023 consistently outperformed the non-ESG index. This trend is likely to continue across global markets as policy environments increasingly shift towards sustainability frameworks that strive for a Paris-compliant world where global temperature rise is capped at 1.5C.

The Green Investment Declaration for Church Institutions

The Green Investment Declaration suggests that church bodies start their journey to green investment by ensuring that their investment policy explicitly recognises the importance of investing in solutions that tackle the climate crisis, and then committing to making some initial green investments. This can be as little as 2-3% of their portfolio, with a view to increasing the percentage over time, which dilutes any increased risk across their total investments. 

Church bodies are encouraged to raise these questions with their fund managers, and ask that the mix of climate solutions in their investment portfolios be raised over time. Some guidance for these conversations can be found in the Church Investors Guide. 

Any church or faith institution can become a signatory to the Green Investment Declaration, and speak out about their ethical investments as well as join a community of fellow church investors. Fill out an expression of interest form today by clicking here. 

To Conclude

Investing in climate solutions is theologically grounded in the Christian call to steward creation, aligned with a Church’s charitable aims of advancing Christianity for public benefit, and wholly permissible within fiduciary responsibilities as a registered charity when considered as part of a balanced, mission-aligned investment strategy.

It is not only permissible, but arguably obligatory, for Churches and faith groups to consider investment in climate solutions as part of faithful, ethical, and visionary stewardship of their resources.