Commentary on provisions of Act Section 15: Power to make social investments Section 292C: Charity trustees’ duties in relation to social investments
The duties set out in this section apply whenever a social investment is made after the commencement of Part 15A, whether or not making the social investment in question involves the exercise of the power conferred by section 292B(1). In other words, the duties apply whether or not, technically, the new power conferred by this Act is the power being used to make the social investment in question.
	The duties cover steps to be taken before a social investment is made (subsection (2)) and a duty to review the charity’s social investments from time to time (subsection (3)). Trustees must be satisfied that a social investment is in the interests of the charity based on its overall benefit to the charity, namely the combination of (a) the expected direct furtherance of the charity's purposes and (b) the expected financial return (subsection (2)(c)). A charity might make a social investment with an emphasis on the charity's purposes, or with an emphasis on the financial return, or where the trustees' motivation is both in equal measure.
	The duties may not be restricted or excluded by the trusts of the charity (subsection (5)).
	Some social investments will also be investments for the purposes of Part 2 of the Trustee Act 2000. In such cases, the duties in this section replace the duties in section 4 (standard investment criteria) and section 5 (advice) of that Act; this is the effect of subsections (6) and (7).
	A social investment made before the commencement of Part 15A is not subject to the duty to review under subsection (3). That is the effect of subsection (1). Where such a social investment made by the trustees of a charitable trust is also an investment for the purposes of Part 2 of the Trustee Act 2000, the corresponding duties of that Act will apply.