Presentation for EIRiS’ Pooled Fund Event 1 December 2009 By Helen Wildsmith, Head of Ethical

1. Presentation for EIRiS’ Pooled Fund Event 1 December 2009 By Helen Wildsmith, Head of Ethical & Responsible Investment

2. Responding to Charities’ Evolving and Polarised Ethical Requirements

3. Agenda About CCLA Charity client consultation Main proposal Differences and similarities Policies in details Next steps

4. About CCLA • CCLA is the largest charity fund manager in the UK • 11 Funds for CofE (CBF Funds) and Charity clients (COIF Funds) • £4.5bn funds under management • We look after c45,000 clients with c95,000 accounts • All we do is manage charity and not-for-profit funds • We are owned by our clients

5. Charity client consultation 2007 phone survey followed by postal survey in 2008 50 in depth phone conversations 20% response rate to postal survey Strong and polarised views about ethical exclusions Existing policy too ethical for some and not ethical enough for others

6. Main proposal “Split” the COIF Charities Investment Fund (£868m at 30/9) COIF Charities Investment Fund COIF Charities Ethical Investment Fund Seed funders for new Ethical Fund identified from survey 90-day notice period for all clients before policy changes

7. Differences and similarities COIF Charities Investment Fund Limited ethical exclusions: focus on international norms COIF Charities Ethical Investment Fund Faith-consistent exclusions: focus on contentious products Some engagement/divestment themes span both funds Appropriate high impact investments in both funds Climate change and CG integrated into core processes

8. Policies in detail – Ethical Fund (from 1/1/10) This fund will exclude all companies with any involvement in supporting oppressive regimes (currently Burma and Sudan) or the production of landmines, cluster bombs or nuclear weapons. Companies with significant involvement in tobacco, alcohol, pornography, gambling and conventional weapons will also be excluded. In addition, there will be a 1% weapons cap. Company engagement (which could lead to exclusion from 2013) will focus on poor practice in any remaining companies with exposure to the products and services above, and violations of international conventions and norms in the areas of human rights, employment practices and climate change disclosure.

9. Policies in detail – Other Funds (from 1/1/10) Any involvement by companies in the production of landmines or cluster bombs will lead to exclusion from these three funds. Companies with significant involvement in tobacco, the production of pornography, and online gambling will also be excluded. Company engagement (which could lead to exclusion from 2013) will focus on poor sales and marketing practices relating to alcohol, and violations of international conventions and norms in the areas of human rights, employment practices and climate change disclosure.

10. Next Steps • Client support during the final weeks of the 90 day period • New fund will exist from the beginning of 2010 • We’re just starting a similar process with our CBF Clients to support the policy reviews underway in the CofE