Campaigners right to protest Baillie Gifford Book Festival funding

The current argument, about the ending of its main sponsorship of an event attended by less than 0.2% of the population, by a company most people have never heard of, might be regarded as somewhat peripheral, especially during a general election campaign.

Not that you’d know it from the reams of column inches devoted to the issue by those who believe the Edinburgh International Book Festival and Baillie Gifford are victims of some terrible, disproportionate outrage.

To recap, the former announced last week that it has been forced to end its sponsorship agreement by the latter, after it came under “intolerable pressure” by climate change campaigners who disapproved of the Edinburgh-based investment firm’s financial stake in the fossil fuel industry and in Israel.

The annual Hay literary festival has ended its sponsorship arrangement with the fund manager for the same reason.

The issue has pulled off the neat trick of uniting commentators in both the Guardian and the Daily Telegraph who, together with others, accuse campaigners of behaving like teenagers and of making “absurd” demands on the festivals.

Baillie Gifford has pointed out that only 1% of the assets it manages is invested directly in fossil fuel companies and that its involvement in Israel includes investments in global companies like Amazon, Nvidia and Meta.

Yet for all their supposed naivety and adolescent posturing, the activists at Fossil Free Books have succeeded in running rings around festival organisers and Baillie Gifford which, at the last count, had more than £225 billion of funds under management.

The tactics of climate change campaigners switched a long time ago from direct action - blockading oil rigs and gluing themselves to trains - to awareness raising. And on this measure alone, they have more than achieved their goal.

At a time when we should all be focused on health, education, and the cost of living, instead the public prints are filled with the pompous fulminations of politicians and commentators attempting to turn it into a freedom of speech issue.

If the right of anyone to speak freely on this issue is under threat, it is certainly not the book festivals nor Baillie Gifford, all of which have well-funded and fully staffed communications departments. Nor is it the writers who have their books in which to express their views and, of course, the letters pages.

Let’s be clear that no-one is being denied the right to read a book through the ending of these sponsorship arrangements and if Edinburgh or Hay wants to avoid the “intolerable pressure” that results from their association with an unpopular sponsor, then they have the freedom to find another. I don’t underestimate the difficulties faced by arts bodies and events. Few, if any, can wash their face financially on ticket sales alone, and they rely on public funding and private sponsorship to be able to operate.

But anyone who argues that Baillie Gifford only invests a small amount in fossil fuels and in Israel is missing the point. If a literary festival is not the place to take a principled stand on this, or any other issue, then what is?

As with any private sponsor of the arts, the fund manager doesn’t lavish hundreds of thousands of pounds on these events every year out of a sense of unalloyed altruism.

It does so because of the image it creates, that it is not a faceless, capitalist behemoth, devoid of a cultural and intellectual hinterland.

Through its association with literary festivals and an annual literary prize, Baillie Gifford contributes more to society than handsome returns for its investors and eye-watering annual bonuses for its senior executives, is the message it wants to send.

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But in return for that, it should come as no surprise when organisations like Fossil Free Books want to kick the tires and look under the bonnet. Nor should it have to be pointed out to the fund manager that what matters to climate change campaigners is the principle, not the amount it invests in behaviours which threaten the life of the planet.

Let’s not forget that Baillie Gifford is not a fossil fuel producer; rather it is a company that chooses to invest in fossil fuel companies, albeit on a comparatively small scale.

If it really wanted to continue with its support for Britain’s literary well-being, it could easily divest itself of the £2.5bn it directs to those funds, in favour of one or more of the many ESG (environmental, social and governance) funds preferred by ethical investors.

Anyone who has taken out a private pension will be familiar with the questionnaire that gives them the option not to have their savings invested in industries with which they feel uncomfortable, including oil and gas, pharmaceuticals, tobacco, alcohol and arms among others.

Similarly, there are several ways in which fund managers choose to invest their clients’ funds; some avoid products or issues with which they don’t agree, or they can opt for a more proactive approach, seeking to effect positive social and environmental change through investment.

Impact investing is an example of the "doing well by doing good" approach to responsible investing: investors hope to profit by promoting investment in projects that will also produce a societal good.

Green bonds and social bonds are examples of sustainability bonds, a form of low-risk impact investing, all of which have similar objectives, but the funds they raise are applied to different environmental or social goals.

The European Investment Bank (EIB), working with other international financial institutions, believes the goal of the green bond market should be “to help mobilise private sector financing for sound climate and environmentally sustainable investments and help enhance transparency of environmental finance.”

Similarly, the International Capital Markets Association (ICMA) publishes the Green (GBP2) and Social (SBP3) Bond Procedures, annually updated voluntary process guidelines.

I am a great admirer of the Edinburgh International Book Festival and I hope it finds a new sponsor. The next time a group of writers gather to put their name to an open letter, I hope they will consider some of the wider issues that extend beyond their immediate purview.