Private Trustees and Ethical Investments

About this event:

To what extent should private trustees be able to take into account wider ethical or environmental, social and governance factors when making investment decisions?

English caselaw from the 1980s suggests that unless the trust instrument expressly permits it, they may only do so in very limited circumstances, eg where all the beneficiaries are adults and have strict views on such matters. Usually, trustees of private family trusts must focus on the maximisation of risk-adjusted returns for the benefit of the beneficial class as a whole, which is likely to include minor and unborn beneficiaries.  This leaves private trustees in a difficult position, as they face increasing demand from beneficiaries for environmentally and socially responsible investment strategies, which may not always deliver equivalent financial returns.

Does such a conservative legal approach still make sense in the 21st century?  If not, what approach should English law take?  How strongly does English authority support the restrictive approach? Is there room for the English courts to develop the law to permit trustees of private trusts to have regard to ethical considerations when investing and, if so, how could they do it?   For example, how easily would the more relaxed approach adopted in relation to charitable trust investments transpose into the private trust context?  Does English caselaw relating to the exercise of other types of powers and/or the variation of trusts support the adoption in the investment context of a wide definition of “benefit” that extends beyond material financial benefit?  What lessons are to be learned from the development of caselaw in jurisdictions, such as Jersey and Guernsey?  Other jurisdictions, such as Scotland and Bermuda, have legislated to enable private trustees to have regard to appropriate non-financial factors when exercising their investment powers.  Is statutory intervention needed here too, and, if so, how can legislation best balance and protect the interests of both current and future beneficiaries? 

These issues are set out in a discussion document which will be pre-circulated to all registered attendees.  It will form the basis of a group discussion led by a panel of experts. 

Chair: 
Sir Launcelot Henderson.  

The panel: 

• Professor Sinéad Agnew (Cambridge)
• Dr Dan Carr (University of Edinburgh)
• Edward Cumming KC (XXIV Old Buildings)
• Robin Vos TEP (Macfarlanes and STEP) and
• a judicial commentator [tbc].

This is a public event for which no charge is made but attendees are required to register.

The Trust Law Committee is a law reform body composed of trust law practitioners and academics.  

Read more about the UCL Private Law Group