The Church Commissioners for England's investment portfolio grew from £5.5bn to £6.1bn in the year to December 2013, according to its annual report and accounts filed this week.

The commissioners, the investment arm of the Church of England and a registered charity, had a total income of £139.7m and saw the value of its assets rise by £740m. Almost all of this came from investments, which rose in value by 15.9 per cent in the year.

It spent £257.5m in the year, of which £121.5m went on paying the pensions of clergy. The other largest expenditures were £40.9m given out in grants to churches, mostly through the Archbishop’s Council, and £25.7m supporting the work of bishops and archbishops.

“Pension liabilities… absorb the earning power of about one third of the Commissioners’ assets and impart an extra degree of caution into our investment policy,” said Andreas Whittam Smith, the first church estates commissioner, in his introduction to the accounts. “These heavy annual payments will not start to fall until at least the middle 2020s.”

The charity continues to hold a small stake in a venture capital fund which invested money in payday lender Wonga, it said in the annual report.

“While we would like to remove our small investment exposure to Wonga, we may not be able to do so for some considerable time because in a venture capital fund exposure to a single company cannot be sold, only the whole fund, usually at a significant discount,” the commissioners said.

“We are reviewing our use of pooled funds. However, we cannot achieve – and do not seek to achieve – a ‘perfectly ethical’ portfolio.

“The investment and business environment is complex and imperfect; recognising our own imperfections, we seek to use our influence as investors to positive effect.”

The church has said it will continue to develop a “challenger bank” operating along ethical principles, and that its Ethical Investment Advisory Group continued to lobby strongly for more ethical business, including voting against remuneration packages in 67 per cent of UK companies.

This month's cover theme in Charity Finance is ethical investment. Read what Edward Mason from the Church of England says about its approach to ethical investment here. There will be a range of articles around the issue on Civil Society Media next week. 

Tom Joy will be speaking about his charity's investment strategy at the Charity Finance Summit 2014,