NHS Lothian Charity’s new investment ethos strengthens their commitment to achieve both financial returns and a positive impact on health

As a long-time responsible investor, NHS Lothian Charity is now pushing its consideration beyond avoidance of harmful investments and significant Environmental, Social and Governance (ESG) risks, to a more intentional approach that aims to deliver positive impact. Their new approach is to combine responsible, sustainable and impact-driven investments that align to their charitable mission, aiming for both a sustainable financial return and a measurable positive impact on health.  

As the official charity and strategic asset of one of the largest health boards in the country, NHS Lothian Charity’s philanthropic role maximises impact in line with its mission of having a positive impact on health in Edinburgh and the Lothians.

Director of NHS Lothian Charity, Jane Ferguson, explains:

Our advanced investment approach considers investments which seek to maximise financial returns without contradicting our mission. It supports long-term sustainability and aims to deliver a positive health and environmental impact, extending to our duties and guidance on ethical and responsible investment.

“Recognising the impact that climate change has on our health, we have implemented a climate strategy which excludes some of the worst contributors to global emissions. In 2022, we formally excluded fossil fuels from our portfolio, having gradually divested from coal, oil and gas over the previous decade. As part of our new approach, we will now also proactively invest in climate solutions. In 2023, we signed up to the Funder Commitment on Climate Change and have agreed an overarching target to align our investments with the 2015 Paris Agreement, committing to help limit temperature rises to no more that 1.5% by 2050.

“Our investment policy also states that we choose not to invest directly in any companies involved in tobacco or alcohol production, or gambling-related companies, due to their negative impact on health. We have also included an allocation to investments with a focus on healthcare, innovation and wellbeing within our portfolio to support those businesses which further our charitable aims.

“We have worked with our investment managers, Cazenove Capital, to help us develop our investment strategy to align with our mission and invest for a better future for all our beneficiaries. By combining philanthropic activities with intentional investing, we can deliver both future financial sustainability for the Charity as well as a measurable positive impact on health.”

Cazenove Capital are well-aligned to the Charity’s strategic goals. They have helped the Charity divest away from harmful areas as well as allocating to solutions through impact investments. Emilie Shaw, Cazenove Capital Sustainable Solutions Lead, said:

We have been working with NHS Lothian Charity for a number of years. As the Charity’s investment managers, we are delighted to support their objective to achieve financial returns and positive impact for people and the planet through the investments.

“NHS Lothian Charity’s portfolio aims to avoids harm – with exclusions on fossil fuels and a Paris aligned investment strategy – and aims to actively create a positive impact for people and the planet, by investing in companies that make a material contribution to the UN Sustainable Development Goals. This active investment approach is combined with a commitment to collaborate with other investors and use our influence to accelerate change towards more a sustainable future.”

Jane concludes:

There is always more work to be done, and we will continue to run a strong sustainable investment portfolio that delivers lasting change. We are committed to embracing new and innovative ways that help us to improve health and healthcare for future generations.”