Andrew joins in the newly created role and will be responsible for all matters related to the ethical thought leadership and ethical performance at Epworth.
After 27 years of service, Stephen Beer, Chief Investment Officer and Head of Ethics, is leaving the Central Finance Board of the Methodist Church and Epworth Investment Management to pursue new challenges.
Stephen leaves the CFB and Epworth with an outstanding track record of leadership in investment management, investment strategy, and ethical/ESG investment. He has led the investment team through a significant period of transformation, as the CFB and Epworth have modernised their investment processes, refined their research and portfolio construction approach, adapted to new regulations, served changing pension fund needs, and successfully launched and managed new ESG funds for the charity sector.
Stephen is well known for his commitment to, and knowledge of, ethical investment and has led many initiatives in this area. These include pioneering work bringing global mining chief executives and church leaders together to work out how mining can benefit all communities, our range of ethical investment policies, and one of the most comprehensive assessments of the oil and gas sector in the light of climate change, together with wider work towards net zero portfolios. The CFB, Epworth, and their clients have benefited from Stephen’s ability to bring together investment theory and experience, ethics, ESG analysis, company engagement, and an understanding of economic strategy and policy.
David Palmer, CEO, said:
“It is no exaggeration to say that Stephen will be much missed and we thank him for his strong commitment to the CFB and Epworth. As Stephen moves to new ventures we will build on his legacy, and we wish him the very best for the future.”
“Some ‘responsible’ investors are undertaking tax acrobatics to avoid paying their fair share of tax.” David Palmer, Chief Executive Officer
2020 has witnessed the acceleration of a number of major societal changes – the shift to e-commerce, remote working, and the transition to a lower carbon economy, to name a few.
The acceleration of these trends has, in part, been caused by Covid-19 with the lockdown providing the opportunity to reflect and ask the question ‘do we want to go back to how things were?’
This can be seen on a micro-level with surveys suggesting 40% of finance professionals and 70% of IT professionals are seeking a career change in 2021.
In the City of London, this has been evident through the very loud embracing of ESG, CSR and ‘stakeholder capitalism’ by institutions and investors alike.
We’ve all seen this in its various shapes and forms – a cuddly advert filmed over Zoom; a CSR initiative to feed/clothe/entertain key workers; or a cash donation to a charity stepping into a gap left by a government spending cut.
The City’s progress on ESG should be celebrated, but it needs to go further and, collectively, the City needs to achieve more.
The excuses, that were previously fed to savers to fob-off concerns around investing in weapons, tobacco, and fossil fuel exploration, are no longer working.
You can no longer tell a millennial or a member of Generation Z that the high barriers to entry and the stable income of weapon-manufacturing stocks mean that its therefore worth ignoring the fact that weapons platforms kill people, mostly civilians.
Those lines won’t work. If you try, you’ll find your young clients will download an app and have their money invested in green ETFs before the week’s end.
Our future customers will decide which of us continue operating and they’re only becoming more empowered thanks to advances in technology, the information available, and regulation.
So, it must be asked, will the tolerance of generations’ that graduated into the 2008 and Covid-19 recessions wear thin, when they learn that their newly carbon-neutral pension manager invests in companies that undertake tax acrobatics to avoid paying their fair share of tax, which is needed now more than ever?
If you think we’re exaggerating, here’s a sad fact: there’s only one asset manager in the UK with the Fair Tax Mark.
That’s clearly not good enough and not sustainable for any of us.
The true scale of this insidious problem remains unclear thanks to the secrecy and complexity with which these arrangements are made by London’s leading accountancy and law firms.
The UK government’s official estimate for how much tax is avoided is £36bn. Whereas, independent experts from Tax Research have suggested it’s as much as £116bn. To give you some idea of how transformative that money would be for the UK, our public spending for health and the NHS in 2020-21 is £178bn.
It’s only a matter of time before the public look even more dimly on firms with tax addresses in countries where they have very little activity while they pay a pitiful amount of tax in countries where they source billions of revenue.
You only have to look at public frustration surrounding the tax arrangements of leading Brexiteers Sir James Dyson and Sir Jim Ratcliffe, who have relocated their homes and businesses to Singapore and Monaco respectively, to understand how this might play out in the court of public opinion.
The old excuses that were once fed to clients on this issue are similarly losing their potency.
People are tired of hearing how many hospitals could be built if schemes like the Double Irish with the Dutch Sandwich weren’t exploited by the world’s largest tech firms.
Moreover, these firms, including Amazon, are set to be some of the largest beneficiaries of the lockdown-led boom in e-commerce. Due to the desperation in today’s society, they have been able to recruit newly laid-off workers by the thousands, but have declined to offer them sick or holiday pay.
There is real anger that companies in receipt of taxpayer money are using it to pay dividends or support executive pay, while countless families live in fear of the furlough scheme ending.
This year, the power of the public to bring about change has never been more evident and so underestimated.
That power, which has brought out the best in humanity in 2020, will continue to find its way into City boardrooms in which the question will be asked: ‘Are you paying your fair share?’
Reproduced with kind permission of ESG Clarity
Between Wednesday 4 and 18 November 2020 Epworth Investment together with the Central Finance Board of the Methodist Church held a series of online conferences for charity trustees on ethics and investment.
This session looked at the impact of ethics on investment performance, risk and income; and considered whether or not ethical screening works to eliminate exposure to certain areas and engagement works to improve corporate practices.
Following the cuts to interest rates and company dividends in response to the COVID-19 pandemic, we looked at cash management and how best to secure income, as well as considering whether long-term investments are a more sustainable source of income for charities.
After the extraordinary levels of volatility in investment markets in the spring of 2020, we reflected on the current economic environment and where value currently exists in investment markets.
Epworth Investment Management, which has in excess of £1.2bn of assets under management, has today (21st September) secured its first Fair Tax Mark certification, and joins the growing movement of responsible businesses who ‘say what they pay with pride’.
Epworth Investment Management is an investment manager dedicated to serving the needs of Churches and Charities. They are stewards of their investors’ money and carefully select investments using Christian ethical criteria. Epworth is wholly owned by the Central Finance Board of the Methodist Church, which was founded in 1960.
The Fair Tax Mark is an independent certification, which recognises organisations that demonstrate they are paying the right amount of corporation tax in the right place, at the right time. More than 50 businesses have now been certified. These include national brands such as Timpson, Lush, and Richer Sounds, FTSE listed companies including SSE and Marshalls Plc., as well as co-operatives, family businesses and social enterprises.
Epworth Investment Management has developed a clear responsible tax policy and is committed to transparency. This includes being open regarding its lobbying on taxation matters and foregoing influencing governmental tax legislation in any way that is detrimental to its stakeholders’ best interests. They are also at the leading edge, globally, of engagement with investees on responsible tax conduct.
David Palmer, Chief Executive, commented:
“Responsible investing is at the heart of what we do, and I am pleased to say that Epworth Investment Management has taken all of the necessary steps to ensure it is responsible and transparent on tax. We will not stop there however. We are committed to the Fair Tax Mark, and shall encourage our investee companies to secure this certification as well”.
Paul Monaghan, Chief Executive, Fair Tax Mark, said:
“We are delighted to announce that Epworth Investment Management is the first fund manager in the UK to achieve the Fair Tax Mark. They are walking the talk and have thrown the gauntlet down to other asset managers, in terms of both operational conduct and securing change among investees.”
“Institutional investors and asset managers have, to date, been somewhat cautious on the issue of tax justice, in comparison with their vigorous work in the areas of climate change and human rights. So it’s great to see Epworth Investment Management setting a benchmark for what meaningful action can look like.”
Justin Thacker, Director, Church Action for Tax Justice, said:
“John Wesley, the founder of Methodism, famously encouraged us to gain all we can – but then added ‘without hurting our neighbour’, without ‘ruining his trade’. In making the decision to comply with the requirements of the Fair Tax Mark, Epworth Investment Management are truly honouring their Methodist foundations. They are demonstrating that it is not just possible, but also valuable, to combine effective investment practices with a Christian ethical base, and have forged a path for other Christian investment institutions to follow.”
Polling* commissioned by the Fair Tax Mark from ICM has recently found record levels of post-covid concern among the public about the use of tax avoidance practices by business in the UK. Over three-quarters of people responded said that they would rather shop with (79%) or work for (82%) a business that can prove it is paying its fair share of tax. Eight in ten people (82%) believe businesses benefiting from Government bailouts should be forced to agree terms that prohibit tax avoidance and enforce responsible tax conduct.
* 2020 ICM Omnibus: a nationally representative omnibus survey of c.2,000 adults across GB between 15th and 17th May 2020.
NOTES TO EDITORS:
The Fair Tax Mark certification scheme was launched in February 2014 and seeks to encourage and recognise organisations that pay the right amount of corporation tax at the right time and in the right place. Tax contributions are a key part of the wider social and economic contribution made by business, helping the communities in which they operate to deliver valuable public services and build the infrastructure that paves the way for growth. More than fifty businesses have now been certified, including FTSE-listed PLCs, co-operatives, social enterprises and large private business – which between them have over 7,000 offices and outlets. A suite of global accreditation standards will be rolled out in 2021. We operate as a not-for-profit social enterprise and believe that companies paying tax responsibly should be celebrated, and any race to the bottom resisted. Other initiatives include Fair Tax Week and the Councils for Fair Tax Declaration. https://fairtaxmark.net
Epworth Investment Management present the online seminar “The Climate Emergency – How Can Charities use their Investments to Respond to the Challenge?” at Civil Society Faith Week, Wednesday 9 September 2020.
Revd Canon Jennifer Smith
Superindendent Minister Wesley’s Chapel
“The Climate Emergency – a faith perspective”
Chief Executive Officer, Epworth Investment Management
“Are all faith groups on the same page when it comes to the climate emergency?”
Head of Investment Management, Epworth Investment Management
“Risk, income and other investment challenges in tackling the climate emergency”
Head of Business Development, Epworth Investment Management
“The Epworth Climate Stewardship Fund for Charities – a possible solution”
Epworth Investment Management’s Christophe Borysiewicz talks to Catherine Kingdom of the United Reformed Church Southern Synod Trust about the Church’s decision to divest from fossil fuels.
“The Epworth Climate Stewardship Fund tackles the climate emergency head-on, letting UK charity trustees invest in a way that will help save the planet while targeting good long term investment returns.” David Palmer, Chief Executive Officer
Epworth Investment Management Limited (Epworth), the UK investment manager dedicated to serving the needs of charities, today announces the launch of the Epworth Climate Stewardship Fund (‘the Fund’). It invests in a way that will help UK charities both save the planet and target above market returns over the long term.
Created in response to the climate emergency, the Fund has been developed in partnership with UK charities.
Climate change has been at the core of Epworth’s investment approach for over 10 years. We engage with companies in all sectors to push for better action on reducing carbon emissions and we avoid investment in the worst offenders. This Fund is the evolution of this process, accepting that we are now in a climate emergency and that charities want to take greater steps to ensure they are investing in a way that will benefit the planet.
The Fund aims to have a carbon footprint substantially below that of the FTSE All Share Index. It will invest with Christian ethics, seeking out companies that contribute to the transition to a lower carbon economy and engaging with portfolio companies to encourage action that reduces the risk of climate change. It will exclude companies that extract or refine fossil fuels, those companies that have material involvement in supplying them with goods or services as well as those that do not meet our bespoke Christian ethical screening process.
The Fund will seek income and capital growth over a minimum 5 year period through investing mainly in UK companies.
“Covid 19 has shown everyone just how quickly the world can change – and the sudden damage and disruption that can be caused to day-to-day life. It is rightly everyone’s immediate concern – but climate change remains the biggest long-term threat to our planet. The pandemic response also shows that rapid radical action in response to an existential threat is possible. That gives us hope for action on climate change.
The Epworth Climate Stewardship Fund tackles the climate emergency head-on, letting UK charity trustees invest in a way that will help save the planet while targeting good long term investment returns.”
Epworth Investment Management Limited will be holding two conferences on “Investment and Ethics” in November 2019.
The conferences are aimed at all those that are in a financial role or a trustee of a UK charity. We will be looking at the investment outlook, exploring some of our work on ethics and investment and will also outline possible investment options.
Each conference starts with lunch at 12:30pm and finishes at 4:30pm.
Register to attend
To register for the conference please contact Ashma Ponniah email@example.com