The majority of the public believe a charity should invest ethically, even if this produces lower returns, according to a new report from the EIRIS Foundation and the Holly Hill Charitable Trust.

The survey, 'What is the UK public's opinion of charitable investments', quizzed 1,000 people. It found that 78 per cent of the UK public would think worse of a charity if they found out it had funds invested in activities that run contrary to its specific work and values.

Further 70 per cent believed that charities' investment policies should prohibit investing in any company with poor social, environmental or ethical practices, even if this reduced long-term financial returns.

UK charities, which hold nearly £78bn investments, are not legally required to consider social responsible issues when investing or make lists of their investments available to the general public.

Around 87 per cent of those quizzed either donated to charities and/or worked for them. Of these 89 per cent were not familiar with the investments or investment policies of the charities they worked for/donated to. 

The majority of respondents (84 per cent) agreed that charities should be fully transparent about their investments.

Mission-related investing was also addressed by the survey, with 60 per cent of respondents saying large charities should shift some of their funds into mission investments.

One respondent added: “I was not aware that they did not demand high standards – I think it is shocking that if you give to a charity you may be causing harm and discomfort in other areas.”

Mark Robertson, head of communications at EIRIS said: "Our survey provides clear evidence that the British public expect charities to be fully transparent and to think more about the environmental and social impacts that their investments have".