Epworth launches new fund

Epworth are to launch a new sustainable fund in May, aimed at UK registered charities.

The Epworth Climate Stewardship Fund will exclude fossil derived oil, natural gas and cement manufacture from its investments, and further exclude any investment with like or worse emissions (whether carbon, methane or other GHGs). The fund will tend to long-term and stable sustainable investments, such as windfarms, where risk is relatively low. The fund will be run by a team under Epworth chief investment officer Stephen Beer.

In itself it is unlikely to make a major change to the world of sustainable investing, with CEO David Palmer admitting “what difference can tiny Epworth make?” but since being pioneer in sustainable investing in 1974 (screening for South African investment) and as part of Church Investors Group change has been achieved.

There can “never be a perfect answer” Palmer notes, as there are considerations of supply chain, contractors, logistics and use of products, expressing that it is a matter of not where you draw a line, but there being a line that can be seen. However, getting trustees to realise the impact of the funds is an important step, as is providing a clear alternative fund. Palmer believes that charity funds (worth an approximate 100bn) are aligned and deployable in climate finance, and that the charity trustee boards are ironically somewhat behind corporate pensions trustees in realising the wider ethical and social impact that they can directly create.

As an example of the power of investors and trustees in all sectors to make change, Palmer called the “sea change” at BP – saying that the company would be expected to made a commitment to the environment or face the prospect of being evaluated as part of Epworth’s stocks – literally an hour later BP released its vision for being a net-zero company before 2050. Palmer must be relieved, he notes that in most cases divestment is a last resort rather than the first, preferring engagement.

Epworth is currently looking over all of its holdings, with a view to scoring them and potentially removing those that do not have a convincing direction of motion on environmental issues. This is due to be announced in April.

Will charities see the power they have? Palmer thinks so, the charity trustees have traditionally lacked a diversity of thought that they are now increasingly self-aware of, and the success or failure of the Epworth Climate Stewardship Fund will be some measure of this.

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