Ethical investment considerations form an integral part of the Church of England’s witness and mission. Through its ethical investment policy, the Church of England seeks a constructive engagement with the corporate world in order that responsible business practices and high standards of corporate behaviour are encouraged and supported. The Church of England is also mindful of the need to avoid undermining the
credibility, effectiveness and unity of the Church’s witness by profiting from, or providing capital to, activities that are materially inconsistent with Christian values.

The Ethical Investment Advisory Group (EIAG) of the Church of England carries out ethical investment research on behalf of the three national investment bodies of the Church of England, the Church Commissioners for England, the CBF Church of England Funds, and the Church of England Pensions Board (“the national Church investment bodies”). It develops policy recommendations, which once agreed by the national Church investment bodies, are then communicated to the wider Church. The General Synod, the Archbishops’ Council and the Mission and Public Affairs Council are also represented on the EIAG to provide counsel and wider expertise. The legal authority for investment decisions rests solely with the national Church investment bodies, as well as individual parishes, cathedrals, dioceses and other associated Church of England organisations.

The national Church investment bodies are supportive of companies that seek to develop their businesses successfully and sustainably in the interests of shareholders. The use of positive ethical criteria in assessing companies is firmly incorporated within the ethical investment policy through a process of constructive
engagement with business. Criteria have been identified across five broad areas as:

• responsible employment practices
• best corporate governance practice
• conscientiousness with regard to human rights
• sustainable environmental practice
• sensitivity towards the communities in which business operates

Companies are monitored according to this Statement of Ethical Investment Policy and, where appropriate, by developing an ongoing dialogue and engagement with them. The national Church investment bodies believe this to be the best means of exercising responsible stewardship and shareholder responsibility and of communicating Church concerns. Disinvestment, if recommended, remains the preserve of each national Church investment body, and is only considered if a company’s activities fall outside of the Church’s ethical investment policy or if, after sustained dialogue, it does not respond positively to the Church’s concerns.

Companies that promote pornography or supply armaments are avoided. Separate media and defence investment policies have been published outlining the criteria employed to determine whether companies breach the Church’s policy in these areas.

Investment is also avoided in any company a major part of whose business activity or focus is in the following areas, where this is usually defined as exceeding 25% of Group turnover;

• Gambling
• Tobacco and tobacco related products
• Alcoholic beverages (manufacture and licensed sale)
• Non-offensive military equipment (see defence investment policy)
• Weekly-collected home credit (doorstep lending)
• Human embryonic cloning

The national Church investment bodies also reserve the right to avoid investment in companies whose management practices they judge to be unacceptable. Given the complexity of many companies, some will have business interests in areas the national Church investment bodies seek to avoid, and these are closely monitored
to ensure they meet the Church’s broader criteria. Advice may be offered in respect of all classes of asset under management including domestic and international securities, land and real estate.