Baillie Gifford faces fresh controversy over arts funding

The controversy over Baillie Gifford’s involvement in the arts has reignited, once again highlighting the risks of sponsorship for asset managers.

Activist group Art Workers For Palestine Scotland published an open letter to Edinburgh International Festival (pictured), calling on it to cut ties with the Scottish investment firm. It claimed Baillie Gifford’s holdings in defence contractors AeroVironment and Babcock International have helped enable Israel’s actions in Gaza.

Baillie Gifford is not a sponsor of the event, and donates money to it without branding.

The letter said: “Baillie Gifford takes profits from death and destruction and turns them into arts funding for institutions like EIF. This is institutionalised complicity. This is artwashing.

“No art made from this money is clean.”

This controversy first surfaced over festivals in 2023, including the Edinburgh International Book Festival, with the target back then being Baillie Gifford’s alleged profiting from fossil fuels. The firm went on to end all sponsorships of literary festivals in 2024.

Baillie Gifford’s response in the past has been to point out that it is legally impossible for it to divest in the way that is demanded, and that the investments identified as problematic are standard and constitute a small part of its portfolio.

In an emailed statement, the firm said: “Baillie Gifford is a long-term investor with high ethical standards and a clear focus on doing what is right for the people who entrust us with their pensions and life savings. The assertion that we have significant amounts of clients’ money invested in the Occupied Palestinian Territories and fossil fuels is hugely misleading. As a large employer in Edinburgh, for decades, the firm’s partners have supported culture, education and society in Scotland – including arts festivals, where multi-year donations can make a big difference.”

The new controversy shows how febrile the political environment is around the arts, a world in which both patrons and performers tend to be of a left or liberal bent. The firm’s investments in areas such as fossil fuels and arms are generally less than industry peers, suggesting that other firms would face an even stronger backlash.