30/04/2025
Introduction of new charity investment governance principles
In January 2025, new Charity Investment Governance Principles were introduced to help charities improve the management of their investments. These principles provide a structured approach for trustees to make informed, ethical decisions that align with the charity’s mission while ensuring financial sustainability.
The introduction of the Charity Investment Governance Principles marks a significant step in improving investment practices within the charity sector. These principles offer charities a roadmap to make responsible, informed investment decisions, ensuring alignment with their core values while maintaining financial stability. Adopting these principles will help charities foster stronger governance, build trust, and secure a sustainable future.
Trustee responsibility and ethical investment
One of the key components of the new guidance is the enhanced role of trustees. They are now required to take a more active approach in overseeing charity investments, ensuring they understand the implications of investment decisions. Charities are also encouraged to integrate Environmental, Social, and Governance (ESG) factors into their investment practices, ensuring their decisions reflect the charity’s values, such as avoiding investments that might undermine their mission or harm the environment.
Transparency and improved governance
The guidance stresses the need for greater transparency in reporting investment decisions. Charities are now urged to provide clear and comprehensive reports that demonstrate how their investments align with their mission. Additionally, the principles focus on strengthening governance by encouraging charities to review and improve their internal controls, ensuring robust oversight of investment activities.
Long-term sustainability and ethical considerations
The new principles support charities in creating investment strategies that not only generate financial returns but also contribute to their long-term goals. They help charities strike a balance between ensuring financial sustainability and adhering to ethical standards. By following these principles, charities can maintain the trust of their supporters while navigating the challenges of an increasingly complex investment landscape.
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CFG and sector partners launch Charity Investment Governance Principles