29 June 2011
ethical investment policy on alcohol has been adopted by the
Church of England investing bodies following advice from the
Church's Ethical Investment Advisory Group (EIAG).
Together, the Church Commissioners, the Church of England
Pensions Board and the CBF Church of England Funds hold assets of
more than £8 billion.
The EIAG - concerned about the continuing negative health and
social consequences of the misuse of alcohol - recommended
continued restrictions on investment in companies involved in the
production and sale of alcoholic drinks.
But, in a change from previous policy, all producers and
retailers deriving more than five per cent of their revenues from
alcoholic drinks will now be covered by the alcohol
This brings general retailers such as supermarkets within the
scope of the policy relating to alcoholic drinks for the first
time. The EIAG and the investing bodies concluded that it was
wrong to bar investment in every producer of alcohol while ignoring
the mass retail of low-cost alcohol by supermarkets.
John Reynolds, Chair of the EIAG, said: "The EIAG is concerned
about corporate complicity in the misuse of alcohol, including
through inappropriate pricing and promotions. Institutional
investors don't talk to the supermarkets about this and our old
policy had no teeth because we couldn't divest from a
supermarket. We want to use our influence as shareholders to
bear down hard on poor corporate practice and to encourage good
The new approach will involve the EIAG defining minimum
standards of corporate responsibility that it expects from
companies deriving more than five per cent of their revenues from
alcoholic drinks. The EIAG will analyse companies to see
which meet its minimum standards and will engage with those who do
not. The EIAG's ultimate sanction will be to recommend to the
investing bodies that companies who do not meet the minimum
standards should be excluded from investment.
The new policy will be implemented in partnership with CCLA who
are adopting a similar approach for several of the church and
charity funds they manage following a client survey in
2007/8. Policy implementation will be supported by an
advisory group whose members will include experts associated with
health, youth, and law and order charities. Labelling,
marketing, and pricing and promotions are key areas of
The EIAG expects to make its first recommendations on which
companies to exclude from investment under the new policy in
2013. Until the EIAG makes new recommendations, the old
exclusions of companies deriving more than 25 per cent of revenues
from alcohol will continue to be applied by the National Investing
of England Ethical Investment Advisory Group (EIAG) makes
recommendations on ethical investment policy to the Church of
England's three national investing bodies. These are the
Church Commissioners for England, the Church of England Pensions
Board and the CBF Church of England Funds. Together they hold
assets in excess of £8bn.
CCLA Investment Management
is the leading manager of UK church and charity investments by
assets under management or number of clients.* CCLA is a pioneer of
ethical and responsible investment and exists to help charities,
faith organisations and local authorities make the best of their
investments. CCLA is owned by its not-for-profit
The Church of England has no temperance doctrine. The new
alcohol policy notes that alcohol is a gift of God in creation, to
be enjoyed in moderation but not abused.
The former ethical investment policy was to exclude from
investment all companies deriving more than 25 per cent of their
revenues from the production or sale of alcohol drinks.
The new policy covers all companies deriving more than five per
cent of their revenues from the production or sale of alcohol
drinks, including general retailers such as supermarkets. It
gives the EIAG discretion to advise which companies should be
excluded from investment because of an insufficiently responsible
approach to alcohol production or sale.
There will be a two year transitional period during which the
EIAG will agree the standards it expects of companies and engage
with them, before giving its advice on investment
restrictions. In the meantime companies deriving more than 25
per cent of their revenues from the production or sale of alcohol
drinks will continue to be excluded from investment.
Investment has been permitted since 1998 in selected companies
that have diversified away from brewing into catering, hotels,
health and family-focused activities.
Between them the National Investing Bodies currently hold the
shares of all the major UK supermarkets. Total holdings in
Tesco, Sainsbury, Morrison and Walmart (owners of Asda) are
The EIAG's new ethical investment policy is published at:
* Charity Finance Fund Management Survey