The Church of England’s Ethical Investment Advisory Group (EIAG) has recommended that the UK’s £8bn (€9.5bn) church investors exclude high interest-rate lending companies from their portfolios.
The body said it was “not prepared to sanction” investment in companies charging triple-digit interest rates to some of the most vulnerable customers of financial services.
It wants to avoid investments in businesses that “may exploit, or over-burden with debt, lower income borrowers”.
It comes amid widespread calls for a clampdown on so-called payday lenders, which provide short-term unsecured loans.
Labour Member of Parliament Stella Creasy has in the past criticised the charitable Wellcome Trust for its investment in Wonga, which charges an annual rate of interest of 360%.
The EIAG makes recommendations to the Church’s three national investing bodies, the Church Commissioners,the Church of England Pensions board and the CBF Church of England Funds run by asset manager CCLA.
It takes advice from its ethical screening provider but will make “bespoke recommendations” where appropriate. The new policy builds on a previous exclusion of companies involved in so-called doorstep lending. The group called on the lenders to keep interest rates as low as possible and appropriate for customers’ circumstances. And it called on high-street banks to make ‘basic banking’ more available.
The EIAG has also released a more “fully theologically articulated” policy on the exclusion of companies involved in pornography. It says there are too many big businesses which have pornography as a revenue stream – even though revenue levels are below its screening thresholds. “We do not think it is acceptable, for example, that major mobile phone companies should promote pornography on their own internet portals, especially when mobile phones are provided to children at ever younger ages. New policy announcement