More than a quarter of charities are calling on the Charity Commission to broaden the scope of its guidance on how they can invest responsibly.

The concerns have been raised in responses to the regulator’s consultation on the future of its responsible investment guidance.

The Commission is proposing that the guidance focuses on ensuring charities consider their purpose when making investment decisions.

But 28% of charities that responded said the Commission’s proposed use of the term is “unhelpful”. Their main concern is that “proposed use of the term is too narrow”, according to responses to the consultation, which has now closed.

They point out that investor charities and advisors “understand the term more broadly”, to include considering wider environmental, social and governance factors.

Almost all (95%) advisors who responded said that the Commission’s focus on responsible investment was “unhelpful”.

“A significant number of respondents also commented that responsible investment is not a helpful term because it implies that other approaches are less responsible or not responsible,” said the Commission.

“Some respondents commented that they continue to prefer the term “ethical investment”, previously used in Commission investment guidance.”

In addition, more than a quarter (26.5%) were concerned that the regulator’s guidance “could be clearer”.

The consultation attracted responses from 173 charities, with 103 having a range of investments, while 51 said they mainly have money in a bank in a regulator or deposit account.

Despite concerns around the Commission guidance around a fifth of charities (19%) approve of the Commission’s definition of responsible investment.

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