An interesting feature of the current debate around sustainability and investing is the way that trustees’ decisions are sometimes portrayed as black and white: investing in X is good but investing in Y is bad.

By Richard Butcher

A couple of months ago, a particular interest group issued a report setting out the harm that factory farming does. It called on schemes and, in particular, local authority schemes, to disinvest from them. Now, personally, I had some sympathy with their argument. Look into a factory farm and you’ll see a place of unusual unpleasantness. The life of a factory farmed animal cannot be pleasant. It’s one of the reasons I’ve been a vegetarian for more than 30 years. But, and this important, the report was not balanced. The interest group had an interest. Consequently, they failed to point out some of the benefits of factory farming – including providing affordable food to millions of people. Their argument was a black-and-white one, whereas reality was greyer.

A similar issue came up in a recent trustee meeting. We had been presented with a fund that had several exclusions. One of the exclusions was weapons manufacturing.

Yep – philosophically, again, I had some sympathy with the argument, but, also again, it wasn’t black or white. The meeting was held shortly after the invasion of Ukraine had begun. Weapons, or at least people with those weapons, had perpetrated the invasion, but, equally, they allowed the defence of Ukraine.

The decisions to invest or disinvest (ignoring the practicalities that most schemes have little or no control in any event on the grounds they used pooled funds) or to exclude or not are not, therefore, black and white. They are shades of grey.

And greyness is explicitly allowed for in the rules trustees follow when making decisions. The Edge Principles emerged from 1999 legal precedent and the final principle is that trustee decisions must be reasonable. ” Reasonable”, of course, must, by its nature, imply more than one outcome is possible. It allows trustees decisions to be made somewhere along the scale between black and white.

Trustee investment decisions are made firstly based on financial factors – bearing in mind the need to ensure they are sustainable investments. Ethical considerations rarely come into it. But on all occasions, it’s very rare our decisions aren’t necessarily grey.

For more information, please contact