No laughing matter: Comic Relief invested in tobacco, alcohol and arms firms

The investigation found that the charity invested £630,000 in shares in leading weapons manufacturer BAE Systems

Comic Relief has been forced to defend its investment policy after it emerged that millions of pounds donated to the charity went towards buying shares in tobacco, alcohol and arms firms.

Comic Relief has been forced to defend its investment policy after it emerged that millions of pounds donated to the charity went towards buying shares in tobacco, alcohol and arms firms.

The investigation, carried out by the BBC Panorama programme, claims that the charity has invested in ethically questionable industries when researchers said they had identified "several" funds which had fared better financially by avoiding such businesses.

Researchers claimed that they had found a number of ethically screened funds which outperformed Comic Relief's portfolio for the past three years. Many well-known charities avoid investing in companies which may be in conflict with their stated humanitarian aims.

The investigation found that the charity invested £630,000 in shares in leading weapons manufacturer BAE Systems, despite repeatedly committing itself to helping ‘people affected by conflict’.

The charity, which has raised nearly £1bn for worthwhile causes in the UK and abroad, also invested more than £300,000 in shares in the alcohol industry despite having a stated aim to reduce alcohol misuse and its spin-off effects.

In 2009 £3m of Comic Relief money was invested in shares in tobacco companies despite the charity's work to fight against tuberculosis - for which smoking is a contributory factor in many cases.

Comic Relief, which generates huge publicity for its activities with star-studded programmes on BBC1, said it had avoided a policy of ethical screening for its investments because it does not want to limit the amount of money it raises.

According to the documentary, which will be shown on BBC1 tonight, the charity has also refused to reveal its current investments.

Comic Relief today confirmed that it avoided filtering out investments in order to bring in more money, although it said it kept the situation under review.

In a statement, it said: "To fulfil our legal obligation, Charity Commission guidelines are clear that charities are required to maximise returns on money in their care. For Comic Relief, because the range of issues we support is so broad, ethical screening would significantly limit our ability to invest as well as seriously increase financial risk.

"Therefore ethical screening would have left us unable to meet both our legal and moral obligation to maximise returns and look after the money in our care with an appropriate level of risk. Instead we put the money into large managed funds, like many other leading charities and pension funds. We do not invest directly in any individual company. We believe this approach has delivered the greatest benefits to the most vulnerable people.

"This policy has achieved strong returns over the years, which have helped Comic Relief cover its running costs, without having to use any of the money donated directly by the public. This is a complex area, with many important considerations, and we keep it under constant review."

The charity Save the Children was also under fire today after The Independent exclusively revealed emails appearing to show the charity self-censoring criticism of Big Six energy suppliers for fear of upsetting existing – or potential – corporate donors.

Internal emails obtained by The Independent show senior staff were worried about publicity that could “risk the EDF partnership”.

The charity said today it “totally refuted” the claims, pointing to a fuel-poverty campaign they ran in January last year which was critical of the Big Six.