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Ethics

Balancing
opportunity with integrity

The CFB is committed to seeking both superior returns and improving ethical standards.

Positive approach

We seek to improve the ethical profile of our portfolios by avoiding investments in particular businesses and encouraging better practices in others.

Company engagement

We view our investments as long term partnerships with company managements. We engage in constructive dialogue and practise active voting to challenge social, environmental and ethical considerations.

Integrated process

Ethical research integrated with financial analysis is key to our investment process. Fund managers are responsible for both financial and ethical analysis.

Clear policy

Comprehensive policy statements and position papers offer a reference for clients and a clear focus for fund managers.

Theological grounding

The Joint Advisory Committee on the Ethics of Investment provides a unique and robust mechanism for testing ethical investment decisions against theological principles.

Quarterly review
June 2020

Modern slavery

In its most recent Modern Slavery statement, Tesco noted instances of Modern Slavery in its supply chain in Thailand and Malaysia. We recognise that there is Modern Slavery in most, if not all supply chains, and, while we work collectively to eradicate Modern Slavery in society, that cannot be done without first uncovering it. This transparency from Tesco is welcome, along with its further investigation and action plans for the sites involved. We have previously engaged with Tesco on Modern Slavery. We are also part of the Find it, Fix it, Prevent it engagement on this matter with companies in the hospitality sector.

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Gender diversity

In 2016, the Hampton-Alexander review set recommendations for FTSE 350 companies to improve the representation of women at the board level and in senior management. It set a minimum 33% target to be reached by the end of 2020. In February 2020, FTSE 100 companies in aggregate reached this goal. However, the FTSE 250 had not. With less than six months to go, we continue to vote on gender diversity by voting against the re-election of the Chair of the Nominations committee at FTSE 350 companies where the Board composition is not at least 33% women. We are looking at how other aspects of diversity can be considered effectively.

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Corporate governance and voting

Q2 contains much of the AGM season, when companies with December year ends report to their shareholders. This year has seen an increase in the number of climate change resolutions (see Barclays above), and a number of ‘revolts’ where substantial minorities of shareholders voted against remuneration reports or executive pay schemes. These included Intertek, Lloyds Banking Group and Ten Entertainment Group among our holdings – we voted against remuneration policy in all three cases. Overall, during Q2 we voted against 63% of remuneration reports in the UK Equity Fund and 62% in the Epworth Global Equity Fund.

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More quarterly reviews

Voting

Reports

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June
2020
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March
2020
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December
2019
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September
2019

Policy

Voting policy →

Serving
the Methodist Church

The Joint Advisory Committee on the Ethics of Investment (JACEI) provides CFB with advice on ethical issues and reports to the Methodist Conference on CFB compliance with the aims and objectives of the Church.

JACEI Report

The JACEI Report is produced for the Methodist Conference outlining its activities each year. An abbreviated version is also produced. Together they provide a comprehensive survey of the issues that we have addressed.

Joint Advisory Committee on the Ethics of Investment Report 2020 Joint Advisory Committee on the Ethics of Investment Report 2019 Joint Advisory Committee on the Ethics of Investment Short Report 2019

The Climate emergency

Evidence continues to mount that the Earth is warming and yet greenhouse gas emissions continue to rise.

Read the CFB and JACEI's response →

Working
in partnership

Carbon Disclosure Project Church Investors Group IIGCC, Institutional Investors Group on Climate Change Access to Medicines Index Access to Nutrition Index FAIRR ECCR, The Ecumenical Council for Corporate Responsibility EITI< The Extractive Industries Transparency Initiative Institutional Shareholder Services Sustainalytics TRUCOST UNPRI UKSIF Business Benchmark on Farm Animal Welfare, BBFAW

Active membership of global networks and partnerships provide a powerful united voice when dealing with multinational corporations and assist us and our clients to make informed ethical investment decisions.

The Stewardship Code

The CFB supports investor engagement with companies and is a signatory to the Financial Reporting Council's Stewardship Code

Montréal Pledge

The CFB is a signatory of the Montréal Carbon Pledge and is committed to a voluntary disclosure of the results. Read the CFB's Montréal Pledge Disclosure.

Have your say...

Our ethics are based on Methodist Church principles. We welcome feedback on an ethical issue. If you would like to discuss these please contact CFB Relationship Manager Christophe Borysiewicz on 020 7496 3630 or Chair of JACEI Stephen Wigley on 020 7467 5245.