Charities Bill [HL]

Baroness Hayman Excerpts

Wednesday 7th July 2021 Grand Committee

[Baroness Hayman (CB)]

My Lords, I declare my interests as a co-chair of Peers for the Planet and the chair of Malaria No More UK. Like others who have spoken, I have been involved with various charities for many decades.

I certainly support and welcome this Bill and its provisions to address complicated and uncertain areas of charity law. I will leave it to others better qualified than I to comment on some of the detail, although I have past experience of legacies and ex gratia payments where these provisions will, I think, be extremely welcome.

Since we do not often debate charity law, I hope that noble Lords will allow me the opportunity to touch responsible investment, which is another area of charity law that could similarly be described as complicated and uncertain, and, in line with that, to consider how the role and remit of the Charity Commission aligns with the UK’s net-zero and biodiversity goals.

In January 2020, the Charity Commission began a listening exercise. It revealed that ambiguities in charities investment law impede some charity trustees from pursuing responsible investment strategies. The commission subsequently published a consultation on draft revised responsible investment guidance. My reading is that this continues to take a permissive approach to responsible investment but neither expects nor encourages any charity to invest responsibly. I fear that that could be interpreted as an invitation not even to consider whether responsible investment is the right thing to do.

With environmental degradation and climate action failure commonly recognised as the greatest risks we face, and with the Government arguing that all sections of society should be involved in our statutory and international obligations and support the UK’s transition to a net-zero, nature-positive economy, I have to ask whether the Charity Commission should play a part in this and encourage charities to do so themselves. The commission’s statutory remit does not include any express mention of sustainability or any requirement to promote sustainable behaviour on the part of charities. This is at odds with government policy and trends in all areas of society. The commission’s strategy documents —its five-year strategic plan and its business plan—make no reference to the challenges posed by climate change and biodiversity loss. The commission last updated its rather slim guidance on environmental sustainability in March 2013.

The Climate Change Committee’s recent progress report to Parliament emphasises the need for a net-zero test to ensure that all government policy is joined up and compatible with UK climate targets. Charities and their regulator should not be exempt from this. At a time when these changes are driving comprehensive social, economic and political change, charities should be at the forefront of responding to it and seizing sustainable opportunities, and the Charity Commission should be encouraging them to do so.

I agree with the noble Lord, Lord Stevenson, that this is not the Bill to make major changes to the commission’s functions, although perhaps in future we could look at how we could insert a responsibility for it to align with climate change goals in statute. In the meantime, much could be done through improved guidance and clarification of the commission’s role to ensure that it takes the UK’s environmental commitments into account when setting its strategy. I would be very grateful for any comments from the Minister on how the Government consider their own goals should interact with the Charity Commission’s remit, powers and guidance for charities.