Faith groups should play a leading role in delivering ethical, responsible, sustainable finance: that was a key message from the Faith in Finance round table at Ethical Finance 2019, hosted by the Global Ethical Finance Initiative, the UNDP and the Scottish Government.
The conference, attended by around 500 delegates on October 8-9, focused on both 'financing green' and 'greening finance'. There was consensus that private capital will be required on top of government money to address the climate crisis and support a just transition: up to 80% of the cost will have to be supported by private capital.
There was also a near consensus that we cannot disinvest ourselves into a zero carbon economy, so there must be a strong focus on holding banks to account, looking at corporate culture and ethics, the role of regulators, increasing the ethical options available and expanding the concept of ethical finance beyond green.
'Money is not neutral'
It was encouraging to see how mainstream providers are starting to put values at the heart of how they operate and how both government and private sector are looking to faith groups to once again take the lead in finance, as they did historically by providing social safety nets through the first mutuals and the first pension funds.
The UK Charity Commission is going as far as to suggest that if charities' investments do not align with their missions, this could be viewed as a failure to fulfil fiduciary duty.
As the Archbishop of Canterbury Justin Welby told delegates: ‘Money is not neutral – it can either do bad or good. Passive stewardship is the answer for no-one. We achieve the most when we act in coalition with others.’ He said the Church Commission had been using tools to assess climate impact for several years; its investments have generated an 8% average annual return over the past 30 years.
Multi-faith collaboration
The event acknowledged how far multi-faith collaboration had come with 3.5 years of dedicated engagement and consultation leading to the publication of Edinburgh Finance Principles and plans to launch a fund in January 2020 which is seeking £100k of matched funding.