In the report
State of the sector
The EIC is one experiment in a deeper questioning of how charity money is invested, and how that aligns with charitable missions. The aim of this report is to share our learnings of both:
- What is available in the market that supports our vision of how charity money should be invested.
- The challenges and opportunities for charity investors and other values-based asset owners who are considering how they invest their capital.
Across asset classes and themes, there are numerous options to invest money in more impactful and values-based ways. However, challenges remain and there is no perfect ISP or product that can deliver impact without compromising on return and/or risk.
Trade-offs are much more visible in 2026 compared to 2020 and need to be seriously considered by organisations who want to align investment with their missions.
These trade-offs are discussed later in the report, but the primary one is that sustainable and impact funds cannot match the financial performance of the global market due to the dominance of the “Magnificent 7” (Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, Tesla) and fossil fuel energy companies, neither of which tend to hold a meaningful allocation in impact and sustainable funds.
Trustees of charities have a fiduciary duty to safeguard assets, which has traditionally meant prioritising financial return over other considerations when investing. This has created tension for trustees wishing to invest in line with their charity’s mission. Recent developments have eased this tension: the High Court’s judgement in Butler-Sloss v Charity Commission (2022) and resulting revised Charity Commission guidance, CC14 (2023).
However, charity trustees still face the dilemma of how best to balance making mission-aligned investments with financial return. Through the process, we learned that these trade-offs are a large cause of concern in boardrooms. Looking forward, we may need to reconsider what ‘good financial performance’ is, or what non-financial cost it comes at.