Why look at cash deposits as part of stewardship?
Cash stewardship is a natural extension of how we invest on behalf of clients. Our cash funds invest with financial institutions, and while that does not give us shareholder rights, it does create a client relationship that can support engagement.
For charity treasurers, that means cash management can also include an element of responsible oversight.
The starting point was straightforward. Stewardship can reflect a fuller range of relationships through which we invest on behalf of clients, and for engagement with banks and financial institutions, the cash funds were the place to look.
We have already engaged with banks for several years, where they were held in portfolios. But looking at our cash funds, it was clear that these relationships also provided a broader route into dialogue.
We have a limited number of financial institutions in portfolios, so there is restricted scope for engagement just through holdings. In contrast, our cash funds rely on a much larger approved list of counterparties.
So, we decided to extend this work to the listed institutions on that approved list. That meant starting engagement with around 40 financial institutions used, or eligible for use, by our cash team.
The logic is that cash deposits give you some level of influence with the institution and can open doors to conversations. If a bank is taking your deposits, it is reasonable to ask how it is approaching climate-related risks and whether its financing practices are moving in the right direction.
How can you influence a bank without owning shares?
Having funds deposited with a bank is a different form of influence from share ownership, but it is still a meaningful avenue. If you place deposits with a bank, you are a client and a source of funding.
That gives you a basis for asking questions and expecting a response. In practice, that means writing to the bank, sharing your assessment, asking for a meeting and pressing them on areas where policy or practice appears weak.
As you are not necessarily acting in the position of a shareholder, there is not the same relationship with the financial institution, so we wouldn’t overstate the leverage.
However, it does provide access. It gives an opening to ask how climate considerations are feeding into financing decisions, whether or how fossil fuel expansion is being restricted in practice, and to get a sense of whether the bank’s policies are tightening or loosening over time.
For charities, that matters because cash management is often treated as purely operational. But viewed as an opportunity, it can offer a starting point for dialogue. Even without being a shareholder, you can still ask where your money sits and what activities that institution is helping to finance.
What does your approach look like in practice?
In practice, we assess the listed banks on our approved counterparty list, identify where we have concerns, and then aim to speak to them directly.
For climate, one area we focus on is fossil fuel expansion. We use external research, including coal and oil and gas policy trackers published by Reclaim Finance, to understand where bank policies appear stronger and where the gaps are. We then write to the banks, explain our assessment and ask for a discussion.
Those discussions are about getting beyond headline statements. We want to understand how policy works in practice.
For example, does the bank restrict finance for new oil and gas expansion only at project level, or also at company level? How does it treat LNG (liquid natural gas) and midstream infrastructure? How does it assess whether a client’s transition plan is credible? And does climate analysis actually feed into credit decisions?
Our discussion with a French bank was useful in this respect. It illustrated some of the stronger practice emerging in this area. What stood out was not just the policy wording, but the fact that climate analysis was embedded into the annual credit review process and supported by internal tools and governance.
That doesn’t mean there are no gaps, but it did give us a clearer sense of what more developed practice looks like.
Why focus on fossil fuel expansion finance?
Because this is a very clear way to test the credibility of a bank’s climate approach. Leading institutions, including the International Energy Agency, have said that no new fossil fuel extraction is needed if the world is to meet energy demand in line with climate goals.
In this context, continued financing of expansion activities is difficult to reconcile with a serious climate strategy.
Banks matter here because they have a crucial role in what gets financed, whether through loans, bond issuance or other forms of support. So, if you want to understand whether the financial system is supporting the transition, this is an obvious place to look at more closely.
It is also an area where broad commitments can hide important differences. A bank may have a general climate ambition but still allow support for companies or projects expanding oil and gas production or infrastructure.
Focusing on expansion helps cut through that. It’s a practical test, and one that is closely tied to actual outcomes.
What would you count as progress over the next year?
At this stage, progress is likely to be modest, but it can still be meaningful.
First: continued engagement and serious dialogue. We wrote to 40 institutions in October last year, and by year-end had received 12 responses and held six meetings. The meetings have been useful in understanding the banks’ overall approach.
Having time to explore in more depth how the policies are implemented in practice clarifies the rigour of their approach and how they intend to strengthen this implementation, so there is a lot to learn from direct discussion.
Second: better transparency. We would like to see clearer disclosure on how policies apply to coal, oil and gas expansion, especially where banks rely on case-by-case client assessment rather than exclusions.
Third: more consistent practice over time. That could mean more rigorous restrictions, fewer loopholes, or clearer evidence that climate considerations are feeding into credit review and financing decisions.
And in the current environment, I would add one more thing: no backsliding. Several banks have weakened climate commitments or targets recently. Bearing this in mind, simply holding the line would put the bank among the better performers.
As we are only a few months into these engagements, it would not be realistic to claim any major policy shifts. But better dialogue, improving transparency and staying on a clear course would all be positive indicators.
Fast facts
No. 1 investment manager of UK charities*
£14.9bn in assets under management**
60+ years of Good Investment
£16tn of assets supporting CCLA initiatives in mental health and modern slavery**
190 team of staff**
Early signatory (2007) to Principles for Responsible Investment (PRI)**
5✶ rated by PRI for listed equities**
*By number of charities. Charity Finance Fund Management Survey 2025 **CCLA: Internal research as at January 2026
What we do
Firmly believing that healthy financial markets depend on healthy communities, CCLA has a long track record of instigating change for a better world with its pioneering work on climate, modern slavery and mental health.
Founded in 1958, CCLA is authorised and regulated by the Financial Conduct Authority
