UK Charity Trustees Win Right to Prioritise Climate over Returns

A High Court ruling has given UK charities the green light to prioritise alignment of their investments with the goals of the Paris Agreement to avoid the worst impacts of climate change, even if this incurs financial risk. In a case brought by trustees of the Ashden Trust and the Mark Leonard Trust, both of which support environmental protection and improvement causes, Justice Michael Green agreed with the claimants that there needed to be “a dramatic shift in investment policies in order to have any appreciable effect on greenhouse gas emissions”. The ruling reinterprets case law dating back to 1992 (Harries v Church Commissioners for England) which obliged charity trustees to maximise return on investments without taking account of ethical or moral considerations that could reduce returns, unless in in the case of conflict with the charity’s mission. The decision is likely to require the Charity Commission to revise its guidance for charity trustees on investment matters and may also influence the prevailing interpretation of ficuiary duty in other jurisdictions and for other categories of investors.

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