Responsible investment

About this policy

This policy summarises and guides the Society’s approach to responsible investments. It is recognised that being a responsible investor will mean different things to different people, but the Society holds that one core element of being a responsible investor is to work in the charity’s best interests. To this end we run a globally diversified portfolio to manage the risks of over-exposure to a particular region, sector or company. Hence our investments tend to be a reflection of the global economy.

The policy summarises the principles and processes which guide the Society’s investment decisions, including the Investment Sub-Committee’s appointment of investment managers and products. There is a clear chain of delegated responsibility whereby the Investment Sub-Committee reports to the Finance Committee, which in turn reports to Council, the Society’s trustee body. Council represents the core of the Society’s governance and its ultimate authority. 

The Society benefits from a substantial body of unrestricted funds that carry no specific requirements in terms of the forms or objectives of investment. Guidance from the Charity Commission published in 2023 is more permissive of a social investment approach, i.e. the making of investments that directly engage with a charity’s purpose. 

The Investment Sub-Committee has not gone down this route to date. However, relatedly, the Society anticipates some application of unrestricted funds to invest in the Society’s primary material asset – our building in South Kensington – that reduce its environmental impact, make it more inclusive, reduce running costs and improve revenues from hiring the venue. Such investments would be directly relevant to the Society’s current strategy, itself an interpretation of the founding purpose of ‘the advancement of geographical science’.

There have in recent years been a range of different terms applied to investment strategies and policies guided by a set of values, including responsible, sustainable, ethical, values, and ‘ESG’ investing. The Society finds it robust and appropriate to describe our approach as a Responsible investment policy. This policy is regularly reviewed by the Investment Sub-Committee, Finance Committee and Council in turn. The policy is shared publicly online and is also summarised within the Society’s statutory accounts.

There is clear evidence that companies with high environmental, social and corporate governance (ESG) scores consistently outperform their lower-rated peers. Hence the Society has selected investment managers that are demonstrably committed to integrating these considerations into investment decisions, and they are quizzed on their performance at each meeting (at least twice a year). The current approach requires that our investment managers act as ‘engaged investors’ in relation to ESG issues.

The Society pursues this approach in favour of an exclusions-based policy. There are several reasons for this, including the fact that the Society, as a scholarly society, champions freedom of speech, critical thinking and informed debate. An exclusions policy would require unanimity of view across the Fellowship on such issues arising. This point is reinforced in the Society’s own Advocacy and campaigning policy.

The Society’s Investment Sub-Committee takes reports at each meeting on the responsible investment assessment processes and performance indicators for its main investment managers (currently Ruffer, Newton and Sarasin), and this would be a prominent consideration in future competitive review processes in relation to investment management. The Society’s preference is to invest in mandates which are specifically tailored to the needs of UK charities.

Additionally, it is worth noting that in the process of appointing new members to the Investment Sub-Committee, responsible investment experience was a prominent discussion point. Anticipated new appointments (summer 2025) will bring additional skills and knowledge relevant to responsible investing.