Ethical Investment in Hard Times
| Author | Peter Luxton |
| Date | 01 July 1992 |
| DOI | http://doi.org/10.1111/j.1468-2230.1992.tb00937.x |
| Published date | 01 July 1992 |
July
19921
Ethical Investment in
Hard
Times
This, then, is the lesson to be learned from
Royall.
Simple verbal tests are no
substitute for a careful analysis of causal principles. This is not to say, of course,
that causal principles offer a straightforward answer to all the complicated causal
questions thrown up by the criminal law.
As
with any other principle, they need
interpretation and application, and there
will
always
be
borderline cases. Nevertheless,
without a clear exposition of these principles we lack the tools necessary to approach
the difficult problem of causation in the law.
Ethical Investment in Hard Times
Peter
Luxton
*
The concept of ethical investment has attracted increasing attention since the
1960s.
Individuals investing their own funds are, of course, entitled to invest as they wish.
Specialist advice is available’; and distinctive forms of investment (some of which
even permit the expression of a social conscience
in
varying degrees)* have been
designed for investors with particular ethical
concern^.^
When, however, the
investment is of funds held
in
trust, ethical investment has remained a grey area
of law.4 The starting point is the general principle that trustees must secure the best
financial deal for the beneficiaries: ethical considerations do not enter into In
Cowan
v
Scargill,6
Megarry VC applied this principle to the investment policy of
pension fund trustees, admitting to it only one qualification,
viz
where another policy
receives the unanimous support of beneficiaries who are
suijuris.
The recent decision
of Nicholls VC in
Bishop
of
Oxford
v
Church Commissioners
of
England,’
however, indicates that, at least in regard to charities, some degree of ethical
investment is permitted.
The Church Commissioners are an incorporated body with charitable objects:
to provide for clergy of the Church of England and ‘for the cure of
souls
in
parishes.’
This is effected by paying the stipends and the pensions of Church of England clergy
and their families.
In
1990,
the Commissioners’ total income was f230m. The Bishop
of Oxford and some other clergy with the support of the Christian Ethical Investment
Group claimed declarations that, in managing their assets, the Commissioners were
obliged to have regard to the object of promoting the Christian faith through the
established Church of England. Nicholls VC refused to grant the declarations sought
on
the
ground that they were ambiguous and would not assist the Commissioners.
Nevertheless, he did consider the principles applicable to ethical investment.
His Lordship affirmed that trustees are under a duty to further the purposes of
*Unit for Commercial Law Studies, University
of
Sheffield.
From eg The Ethical Investment Research and Information Service
(EIRIS).
The Mercury Provident Bank has a scheme enabling the investor
to
select an interest rate
of
between
0
per cent and 9 per cent, the
surplus
benefiting various Rudolph Steiner projects.
Hence, for instance, the Ecology Building Society, the Abbey Life Ethical Trust.
The Trustee Investments Act 1961,
s
6(l)(b). requires a trustee, in the exercise
of
his powers of
investment,
to
have regard
(infer
ah)
to
the suitability
to
the trust of the description of investment
proposed. However, since suitability
is
not there defined, the section affords little assistance to the
problem at hand.
Thus, trustees have been held under a duty
to
gazump:
Eurrle
v
Saunders
[I9501
2
All ER 193.
[I9851 Ch
270.
Lexistranscript; (1991)
The
Independent,
29 October 1991:
The
Times.
30 October 1991.
587
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