Edward Mason must have wondered if he had been handed a poisoned chalice. The year before he took on the newly created post of Head of Responsible Investment for the Church Commissioners last year, his boss, Archbishop of Canterbury Justin Welby, attacked payday lenders – and then it was found that the Church was investing in one of the most notorious, Wonga.

Admittedly, the funds were held only indirectly via a venture capital firm, and the money was a fraction of the Church’s £6bn under management, but nevertheless, it created fertile ground for headline writers. Even though the Commissioners’ indirect exposure to Wonga was eliminated on the eve of his taking up his role, Mason found his external audience still fixated on the controversy.

It was a baptism of fire through which the former diplomat sailed with calm demeanour, drawing on 15 years in the diplomatic service, and in particular his 2002 posting in Zagreb. 
“People tend to think that ethical investment is about what you don't invest in, whereas it's actually vital what you do invest in and how you relate to those investments”He was Deputy Head of Mission, number two to the Ambassador. “The whole political environment after the war was fascinating. And we were involved in helping the country steer a new course. Croatia applied for EU membership while I was there, so that was the main theme of my time. We were the bad guys because we wanted them to send their indicted war criminals to The Hague, so that was quite a difficult political issue, but that was a condition for us if their EU membership application was to be agreed.

“Politically it was quite difficult, because some of our EU partners were less strict on conditionality and co-operation with The Hague tribunal than we were. So we were outliers and we were very firm on it. There was some quite difficult press, but I think if you stick to something that you feel is the right thing for you and you can articulate well the reasons for it and why it is a point of principle, then people can respect you for that.”

“And in the end, the General in question – General Gotovina – was transferred to The Hague and, on appeal, he was found innocent.

“It wasn't our role to say whether he was guilty. But just being involved in that process of Croatia becoming part of the European mainstream and finding its feet as an independent country, that was the real positive of it, and seeing the country get back on its feet in terms of tourism as well, which really built up momentum while we were there.”

Ethical position Mason joined the Church of England in March 2009 “and then worked for about five and a half years as Secretary to the Church of England Ethical Investment Advisory Group.”

That was quite a change, I would imagine, from your previous job?

“Well, it was and it wasn't. It was amazing, actually, how relevant the skills were, perhaps even more than I imagined. Working for the Foreign Office representing your country, you're used to representing a high-profile institution, and the Church of England still is a high-profile institution in this country and has great resonance in the area of investments. And then there was the range of policy issues, which I really liked. That was what I was used to from my previous background.

The CV

2014 – present: Head of Responsible Investment at the Church Commissioners for England

2009 – 2014: Secretary to the Church of England Ethical Investment Advisory Group

2005–2009: Head of London Office, Independent Diplomat

1990–2005: HM Diplomatic Service, Foreign and Commonwealth Office “Obviously people expect the Church of England to be ethical throughout investments, to talk to business on a wide range of ethical issues, and that could be anything from how a mining company treats communities in India or Zambia, to say, the culture in banking and banking standards reform: a very wide range of issues that I deal with. And again, engaging with business used my relationship-building and influencing skills. So it's amazing how much of it was familiar territory – and diplomacy can be quite handy in the Church of England as well!”

Mason admits he “had a lot to learn about the finance sector and investment, but I really enjoyed that. I'm guess I'm curious about, essentially, what makes the world tick. Through the Foreign Office, it was politics and in investments it is the world of money.”

Complex landscape How would you say you see your role here?

“My current role is to lead on the implementation of the Church Commissioners' ethical investment commitments and also our commitments to responsible investment, including through our signature on the UN Principles for Responsible Investment. I think the landscape of ethical investment is quite complex these days.”

The concept is not a new departure for the Church of England. “We've always implemented investment exclusions in our direct investments, right from when the Church Commissioners went into equities in 1948 when we were established.”

Of course the early exclusions were rather different. “Some of them have survived through to this day. So armaments has been a consistent one, [and so has] gambling. We've always had restrictions around alcohol. Interestingly, tobacco came in when medical evidence about that got stronger – I think that was in the 1970s. 

“My favourite of the original exclusions was around amusements. The Commissioners didn't invest in amusements, which sounds quite Victorian. I think maybe the gambling one was wrapped up within that. And also, they didn't invest in newspapers, because it was felt that newspapers were sort of party political and that wasn't appropriate for the church.”

Media coverage Eventually, of course, the Church did invest in the press. “But then one of the issues I dealt with was News Corporation and the phone hacking scandal. So it was quite ironic, then, that a newspaper issue came up and we ended up divesting from News Corporation because we weren't satisfied with the way in which they were responding to the issues they faced, and also the corporate governance of the company gave us concern. It’s quite unusual for us to divest from a company because of specific concerns about that company.”

He explains how the Wonga investment happened: “When you invest in venture capital, you hand over your capital and then they invest. And it was even more complicated, because it was a fund of funds. So we invested with a fund of funds and then that fund of funds manager invested in funds, and then those funds invested in companies. So that's why it was so far removed from us – and such a tiny exposure, less than £100,000.

“We say it in our statement of ethical investment policy that the way we invest is an integral part of the Church of England's witness and mission. So it's part of being the Church of England's endowment that we seek to reflect the values of our beneficiaries and the wider church. Clearly, that has to be consistent with our fiduciary duty, our legal responsibility to generate the best returns that we can on the assets that we're entrusted with, and doing that in a way that's consistent with ethical policies.

“We're very proud of our track record. We have quite a demanding returns target, which is RPI plus 5% over the longer term. In fact, in our forthcoming annual report we'll be able to announce the track record on that going back 30 years, that we have met that target, which is a very impressive investment return. 

“People tend to think that ethical investment is about what you don't invest in, whereas it's actually vital what you do invest in and how you relate to those investments.”

Working with companies Thus, the Church Commissioners introduced a new alcohol policy five years ago that looks at how responsible a company is in retailing and marketing alcohol – and that includes supermarkets. The Church’s Ethical Investment Advisory Group is also debating the issue of climate change, but as in other areas, Mason expects the Commissioners will generally work with companies rather than divest from them where possible. The Commissioners will announce a new policy on climate change soon.

“There's a Christian phrase 'salt and light' that you may be familiar with. So, Christians should be salt and light in the world and, in a sense, that's how we see engagement. It's kind of being salt and light in the world of business. We're not activists, campaigners, banging the drum. We are investors in companies. We want them to be successful. We want them to be sustainably successful and we want them to operate their businesses in ethical ways.

“Salt adds something to food. Light brings a kind of enlightenment. So I think that's the concept of being a positive, enhancing force in the world.”