JRCT welcomes High Court ruling empowering charity trustees to invest to prevent climate breakdown

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JRCT welcomes High Court ruling empowering charity trustees to invest to prevent climate breakdown

9 May 2022

JRCT welcomes High Court ruling empowering charity trustees to invest to prevent climate breakdown

We welcome the ruling that charities can use their investment portfolios to fight climate change.

In a momentous new judgment, the High Court has confirmed that charity trustees can align their investments with the goals of the Paris Agreement to avoid the worst impacts of climate change, even if this excludes investing in a large part of the market.

Mr Justice Michael Green approved the investment policies of two charitable trusts, the Ashden Trust and the Mark Leonard Trust, which were designed to be aligned to the goals of the Paris Agreement.

They brought the case (Butler-Sloss v Charity Commission) in order to provide legal clarity on the rights and responsibilities of trustees considering adopting a responsible investment policy.

“The Claimants have decided, reasonably in my view, that there needs to be a dramatic shift in investment policies in order to have any appreciable effect on greenhouse gas emissions and for there to be any chance of ensuring that there is no more than a 1.5°C rise in pre-industrial temperature,” the judgment says.

Sarah Butcher, head of finance and investment at JRCT, said: “We’re delighted by this ruling which asks charity trustees to weigh up financial return against any potential conflicts with their aims and work. 

“We recognise that our investments do not stand in isolation; the way we invest plays an important role in mitigating the worst impacts of climate change.

“We are grateful to the Ashden Trust and the Mark Leonard Trust for their courage and commitment in seeking clarity on charity trustee investment duties.”

In 2019, JRCT was among a coalition of charities which joined with law firm Bates Wells in order to address the outdated law in this area.

JRCT has had a long-standing interest in the ethics of investment, with its first policy statement being agreed by the board in 1975.

Since 2013, in work which was led by our former head of finance, Jackie Turpin, the Trust has invested in sustainable funds which integrate environmental, social and governance considerations into our investment processes as a matter of course.