On Desmond Tutu and the struggle for responsible investment

Responsible investment has been something with which many trustees have struggled. Although trustees are under fiduciary duty to provide the highest returns for members, the impact of investments on wider society and the environment has become increasingly important.

However, the approach to such responsible investment has been different. Some schemes have used the exclusion method – not investing in companies, such as arms manufacturers, that can have a negative impact on society.

Others have decided to remain invested in companies in order to engage with the board, which could result in better governance and therefore better returns. 

It has been reported that Archbishop Desmond Tutu has waded into the responsible investment debate. He has written to Dutch super-pension the €309bn (£246bn) ABP to ditch its investments in three Israeli banks – Bank Hapoalim, Bank Leumi and Mizrahi Tefahot Bank.

According to Reuters, the Nobel Peace Prize winner wrote to the scheme’s board saying the investments “enable the expansion of Israeli settlements on occupied Palestinian territories, and profit from the illegal seizure of this land”.

He continued: “Your board has a choice – continue to turn a blind eye to the facts and claim ABP investments are somehow ringfenced from bolstering Israel's occupation, or join the growing movement towards divestment, which will reduce the company's risk, respect international law and strike a powerful, non-violent blow for peace in the Middle East.”

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