Sustainable Finance: Balancing Financial Goals with Social Impact

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In a recent discussion at the Navigating Change event, our audience heard from Guy Davies Co-Founder of Charity Intelligence, who shed light on how charities can balance their financial objectives with making a positive impact on society.

As the world rapidly evolves, the role of charitable organisations in driving positive change becomes increasingly vital. In a recent discussion at the Navigating Change event, our audience heard from Guy Davies Co-Founder of Charity Intelligence, who shed light on how charities can balance their financial objectives with making a positive impact on society. In this blog, we delve into this insightful presentation and explore the key principles of sustainable finance, highlighting how charities can align their investments with their mission.

Charity Intelligence, founded by an insightful duo, has been at the forefront of guiding charities towards making more informed and socially responsible financial decisions. Their mission is to connect charities with professional advisors who can assist them in various aspects, including investments, legal matters, and more.

The Evolution of Sustainable Finance:

Sustainable finance is all about aligning financial goals with social impact. It's a significant shift from traditional investing that focused solely on financial returns. The evolving landscape emphasises three key principles: Environmental, Social, and Governance (ESG). By incorporating these principles, charities can leverage their financial resources to create a positive societal change.

  1. Environmental (E) Considerations:

The "E" in ESG represents the environment. It addresses matters related to preserving the planet. Charities must consider how their investments affect carbon emissions, renewable energy, and the broader ecological landscape. Sustainable investing aims to support initiatives that move away from fossil fuels and promote eco-friendly practices.

  1. Social (S) Factors:

The "S" in ESG is all about people. Guy suggests charities should evaluate their investments based on employee engagement, gender diversity, human rights, and supply chain ethics. He suggests that it's imperative to ensure that your investments align with your social mission. For example, investing in companies that engage in unethical practices, such as child labour or exploitative interest rates, can contradict the core values of many charitable organisations.

  1. Governance (G) Principles:

Governance entails the governance structures and practices within the companies or entities you invest in. This includes assessing the independence of the board, shareholder rights, conflicts of interest, and political contributions. Companies with strong governance policies and practices are less likely to engage in unethical or risky behaviour that could harm your charitable mission.

A Legal Landmark: Butler-Sloss & ors and the Charity Commission:

A crucial legal case in 2022, Butler-Sloss & ors vs. Charity Commission, addressed the question of whether charities can invest for a social benefit alongside a financial return. The conclusion of this case affirmed that charities have the legal right to invest with both financial and social objectives in mind. Charities can pursue investments that are aligned with their mission and reputation without necessarily maximising financial returns.

Guidance from the Charity Commission:

The Charity Commission has provided guidance for charities looking to align their investments with their mission. The recent guidance in Investment CC14 clarifies how charitable investments should consider ESG factors and societal impact. It simplifies and supports the idea that charitable investments should prioritise the social and environmental good alongside financial returns.

Finding Your Balance:

For charitable organisations, finding the right balance between financial stability and societal impact is key. Your investments should support your mission and protect your beneficiaries' interests. By screening investments and excluding sectors that conflict with your values (e.g., tobacco, fossil fuels, weapons), you can ensure your financial decisions align with your mission. Additionally, impact investing empowers charities to leverage their financial clout to effect positive change. Whether it's influencing corporate policies, advocating for social justice, or supporting underprivileged communities, your investments can create a lasting impact.


Balancing financial objectives with a positive societal impact is not just possible; it's a legal and moral duty for charitable organisations. Sustainable finance, guided by ESG principles, allows charities to make more informed investment decisions. By using your financial resources wisely and aligning them with your mission, you can ensure that your investments contribute not only to your financial sustainability but also to the betterment of society as a whole. The world is changing, and as charities, you have the power to be at the forefront of that change, using your investments for good

To explore further resources and connect with experts in the field, you can visit Charity Intelligence's website at Explore our "Navigating Change" series for more insightful blogs and resources on topics crucial to the social sector.

About Charity Bank

Charity Bank is the loans and savings bank owned by and committed to supporting the social sector. Since 2002, we have used our savers’ money to make more than 1,250 loans totalling over £450m to housing, education, social care, community and other social purpose organisations.

Find out more about us here.

Nothing in this article constitutes an invitation to engage in investment activity nor is it advice or a recommendation and professional advice should be taken before any course of action is pursued.