This report shows public data only. Is this your organisation? If so, login here to view your full report.


PRI reporting framework 2019

Export Public Responses

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

The delivery of long-term sustainable returns is a central requirement for our clients. For this reason, responsible investment and stewardship is at the core of our investment approach.

Our responsible investment philosophy is based upon three principles. First, our experience suggests that, over the long term, conventional financial modelling only gives part of the answer as to what makes a company a good investment. So, we carefully assess the environmental, social and governance (ESG) standards of all companies. We have strict processes to identify and then remove companies with high unmitigated ESG risks or the poorest standards of corporate governance from our investment universe. As part of this process we also identify material weaknesses in our portfolio holdings and develop an action plan to improve them through engagement.

Second, we recognise that investment markets will only be able to deliver sustainable, long-term, returns if they are located within a healthy environment and stable society. Therefore, we seek to allocate capital to investments that provide a positive environmental or societal benefit and, through active engagement, help companies improve their ESG performance. 

Finally, we seek to invest our clients' assets in a manner that reflects, and hopefully contributes to furthering, their values.



01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

01.6. Additional information [Optional].

I confirm I have read and understood the Accountability tab for SG 01 I confirm I have read and understood the Accountability tab for SG 01

SG 01 CC. Climate risk

01.6 CC. Indicate the climate-related risks and opportunities that have been identified and factored into the investment strategies and products, within the organisation's investment time horizon.

CCLA recognises that climate change, and associated changes in governmental policy, pose a threat to shareholder value over the medium to long-term. We view climate change as the largest threat to our planet, ecosystems and communities, as well as a being a critical issue for long-term investors. We also recognise that the transition to a low carbon economy presents investment opportunities. For these reasons we have long supported efforts to limit global temperature rises to substantially below two degrees Celsius above pre-industrial levels. 

When identifying new opportunities for our equity and multi-asset funds we aim to invest for a minimum of five years and are aware that the time horizon for many of our charity clients is much longer. For this reason, our climate change and investment policy is applied to all assets under management at CCLA.

We recognise that the biggest risk to investors is a failure to limit temperature rises to a level that is substantially below two degrees above pre-industrial levels. We are also aware that different companies and sectors will be impacted at different times and to different extents and that the impacts of climate change will spread beyond purely environmental issues. For this reason, we review the World Economic Forum's Annual Global Risks Report to identify themes that are of concern and, subsequently, conduct an annual review of the impacts of climate change on the performance of 67 GICs Industry Sectors.

Due, in part, to climate concerns CCLA is currently absent many high carbon sector sectors (such as aviation and cement). Therefore, our risk assessment has prioritised concerns in the sectors held within our portfolios. The keys risks identified are:

- The prospective impact of potential regulation, legislation and litigation on carbon intensive businesses. Through this review we continue to hold a particular concern that the market is not correctly pricing the risk of accelerated legisilation and consumer trends and the impact that this could have on ‘Stranding Assets’ (such as existing fossil fuel reserves)

- The physical effects of climate change. We believe that this will impact upon real estate value (we have a particular focus on assets held in our property funds), financial services companies (such as increasing numbers of insurance claims due to extreme weather events) and impact upon day-to-day operations of assets due to issues such as water shortages.

The risk awarded to a sector determines whether an asset is an eligible investment and/or the level of due-diligence that is necessary to complete prior to a stock entering a CCLA portfolio. For this reason, we are significantly underweight the oil and gas sector, the automobile industry and other exposed sectors.

We also recognise that the transition to a low carbon economy will present significant investment opportunities. We have identified opportunities in renewable energy infrastructure, energy efficiency investments and property refurbishments.

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

01.8 CC. Indicate the associated timescales linked to these risks and opportunities.

We believe that the physical impacts of climate change are already beginning to affect the activities and value of companies within several sectors. For instance, we are experiencing an increased frequency of previously extreme weather events. This has affected the profitability of companies involved in the insurance and underwriting of physical assets in the US. By way of example, 2017 was the most expensive hurricane season on record and we were concened that a small number of CCLA holdings were not adequately re-assessing the forward looking risk within their modelling. These companies have been removed from our portfolio.

We also believe that legislation, regulation and consumer preferences are likely to have an impact on company valuations within both our standard and our clients' extended time horizons. We do not believe that the market is correctly pricing, or that the most exposed companies are adequately preparing for, a quicker than expected transition.

Over the long-term we remain convinced that the biggest risk to the valuation of our funds' assets is a failure to limit temperature rises to a level that is substantially below two degrees Celcius above pre-industrial levels. For this reason, we continue to advocate for stable progressive legislation that will accelerate the transition to a low carbon economy.

01.9 CC. Indicate whether the organisation publicly supports the TCFD?

01.10 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.


As investors we recognise that we have a duty to manage our financial exposure to climate related risk and to maximise the opportunities arising from the low carbon transition for our clients.

For this reason, we updated our 'Climate Change and Investment Policy in 2019'. This mandates five steps.

First, informed by scenario analysis and qualitative investigation by our investment analysts and ESG experts, we conduct an annual review of the major risks and opportunities associated with climate change.

Second, informed by this analysis we seek to avoid investing in the companies, in the most exposed sectors, who are not properly preparing, or are not able to prepare, for the transition to a low carbon economy.

Third, we engage with our holdings to support them in addressing and mitigating the risks that the low carbon economy poses to their business.

Fourth, we seek to promote proactive climate regulation and legislation through interaction with public policy makers. Finally, we seek to identify investments that meet our risk and return objectives and dedicate capital to accelerating the low carbon economy.

We also believe that CCLA has a duty to be at the forefront of institutional investors acting on climate change and that we have the ability to lead other investors in collaborative action. For this reason, we created the 'Aiming for A' investor initiative. This brought together institutional investors to engage with UK-listed oil, gas and mining companies on the low carbon transition. The 'Aiming for A' programme acted as a pre-cursor to the new global Cimate Action 100+ initiative ( To further facilitate collective action Helen Wildsmith, CCLA's Climate Change Stewardship Director, Co-Chairs the IIGCC Resolutions Sub-Committee and promoted the development of the 'Investor Agenda' (


1.12 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.






02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

CCLA's responsible investment policies are set, and their implementation is monitored through, our bi-annual Responsible Investment Committee. This is chaired by our Chief Executive and attended by the Chief Investment Officer, Head of Responsible Investment and other appropriate members of staff.

The majority of our policies are presented in an easily accessible manner within our annual Responsible Investment Report. This is available at 

Further detail is included in subject specific policies. These include:

- Our response to the Stewardship Code (which also acts as our engagement policy) which is available at

- Our Climate Change and Investment Policy which is available at

- and our Cluster Munitions and Landmines Policy which is available at

In addition, the vast majority of our Funds implement ethical investment policies that have been set, either through client consultation or by the Church of England's Ethical Investment Advisory Group, to reflect the values of the underlying unit holders. The specific details of the Screens are included in the Funds' Scheme Particulars. Again these are available on the relevant pages of our website.

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

All of CCLA's business is managed in accordance with our company wide Conflicts of Interest Policy. This details the steps that we take to prevent or manage conflicts (actual or potential) in our day to day business. Our process for identifying and managing these conflicts is detailed at 

We are also aware responsible investment (and particularly stewardship activities) can give rise to specific conflicts of interest. These can include, but are not limited to:

- Voting upon the appointment of a company director with whom CCLA has an existing commercial or other significant relationship

- CCLA portfolios holding the shares of the different companies involved in proposed M&A activity

- Our clients having different views and priorities for engagement 

In order to ensure that possible conflicts of interest do not negatively impact upon our clients CCLA has established robust policies and oversight for all Stewardship Activity. This is regularly monitored by the Ethical and Responsible Investment Committee.

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

CCLA undertake a three year engage/divest cycle with companies who have not responded to allegations of non-conformity with international norms (ILO Core Labour Standards, UN Guiding Principles for Business and Human Rights (GPBHR), GHG emission disclosure and severe incidents that threaten biodiversity).

This process is driven by data provided by MSCI’s ‘ESG Controversies’ product, which researches company public documents, media sources and NGO publications to:

Assess controversies based upon their severity (‘Fail’, ‘Watchlist’, ‘Pass’ or ‘Very Severe to ‘Minor’ – the scoring system used changes dependent upon indicator).
Assess the status of the case (is it ‘Concluded’ or ‘Ongoing’)
Identify whether the case relates to company management problems (is it ‘Structural’ or ‘Non-Structural’).
Provide clients with data as to whether a company has ‘Acknowledged or settled’, ‘Denied Allegations’ or provided ‘No Response’ to the controversy.

Under our controversies process, companies that meet the following criteria are investigated to identify whether they should go into a, formal, three-year engagement programme that requires us to divest if no progress has been made. The criteria for inclusion in this programme is that the company must be:

Rated as ‘Fail’ (under the ILO core labour standards or GPBHR) or ‘Very Severe’, for biodiversity
The controversy has to be ‘Ongoing’ and assessed by MSCI as being ‘structural’ (I.e. a failing on behalf of the company is to blame for the incident)
MSCI have classified the companies response to the incident as either: ‘No response’, Denied Allegations’ or ‘Other’
Approved by the E&RI Committee, following analysis by the E&RI team, as requiring inclusion in the programme.

For completeness, engagement is also conducted with ‘Watch List’ rated companies. However, due to the lower concerns there is no obligation to divest from these companies if no progress is achieved.