THE new chairman of the Ethical Investment Advisory Group
(EIAG), James Featherby, made himself available
for questions from Synod members after a presentation about the
work of the group from Mr Featherby and the EIAG's vice-chairman,
the Revd Professor Richard
Burridge (University of London).
Professor Burridge began by explaining that the EIAG came into
being after one of his predecessors as Dean of King's College,
London, the Rt Revd Richard Harries, took the Church Commissioners
to court over South Africa. "Things have moved on, now that the
Dean of King's is a representative of the Church Commissioners," he
The EIAG's task is to advise the C of E's national investing
bodies (NIBs): the Church Commissioners, the Pensions Board, and
the CBF (C of E funds managed by CCLA). The three have combined
assets of about £9 billion.
"Our starting point is that we take a positive view of business
and of the role of business in society," Mr Featherby said. It was
"entirely appropriate" that the Church should provide capital to
support business, and the investments increase the ability of the
Church to "fund mission and support witness".
The EIAG was "not naïve about the problems". It was right for
the Church to avoid some investments. The Church's restricted list
excluded about 12 per cent of the FTSE 350 index of companies; but,
he said: "Our investments are never going to be pure: investment,
like life, is always going to be ambiguous."
Engagement with companies was better than disengagement. "We are
going to graze our knees, [but] we need to be involved on the field
of play, not sitting on the sidelines."
The part played by Christian investors was not to be "some sort
of moral policeman", but to encourage business to be "all that it
can be in God's Kingdom".
The EIAG's engagement with business "tends to focus on what are
called EESGs: ethical, environmental, social, and governance
issues", Mr Featherby said. "This means things like sustainable
environmental practices, respect for human rights, fair treatment
of employees, customers, and suppliers, proper systems of corporate
governance; and also, from time to time, we engage with wider
The EIAG used its voting powers actively. In 2013, it had voted
on 30,000 resolutions at 2820 company meetings, and supported only
30 per cent of UK executive remuneration pay reports. It had also
engaged directly with 42 companies.
"We find that we are reinforcing elements of good practice, or
aspirations to good practice, that are already under way," Mr
Featherby said. EIAG would, as a last resort, recommend divestment
where there was no evidence of a momentum for change, as it had
with the mining company Vedanta.
Professor Burridge explained that the EIAG applied a "Christian
systematic theology" to its investment advice, including
identifying the biblical approach to issues such as warfare or
"Many supermarkets told us that we were the first people to want
to talk to them about the dangers of alcohol. We've been working
very closely with advisers from the NHS, from the police, from
social services, and so on; and are working towards making
recommendations to the NIBs later this year.
"But, already, as a direct result of our engagement, three major
UK supermarkets - Tesco, Sainsbury's, and Morrisons - have
published new alcohol-policy statements in which they have
recognised the harm that alcohol can do. And action has been taken
by them, particularly on things like high-strength white
Mr Featherby spoke of the "pooled-funds" type of investment, and
the risks inherent in "losing an element of control" when your
funds were put alongside those of others.
The decision whether or when to sell the stake in Wonga was "not
one for EIAG", but for the Church Commissioners. "I understand from
them that it may be a little while before they are able to dispose
of that investment," he said. "To dispose early might damage other
investments, because Wonga is held in a pooled fund alongside other
much more positive investments, and one simply can't sell one
without the other."
Before questions from the floor of the Synod, the
Chairman of the Church of England Pensions Board, Dr
Jonathan Spencer, said that the board "values greatly the work that
the EIAG does". He warned that the Church "should be active in a
hard-headed way without . . . being seduced by the view that
investment solves all our problems".
Responding to a question from Tim Allen (St
Edmundsbury & Ipswich), Mr Featherby explained that the
Commissioners' investment in Wonga was known about "at a fairly
junior level", but there was a "communications failure" between the
Commissioners and Lambeth Palace. A review was currently under way,
but, he said, "Can we guarantee that this won't happen again? No,
He told Gavin Oldham (Oxford) that it was
"difficult to tell" whether damage was caused to the Church's
investment portfolio by excluding particular stocks. He reiterated
that it was important to be engaged with businesses. An academic
report said that "companies improved because of our
April Alexander (Southwark) asked whether it
was taken into account which companies paid their employees the
Living Wage. Professor Burridge explained that was a difficult area
because "all public organisations have to go out to public tender
and are required to take the lowest bid."
All staff directly employed by the Church Commissioners were
paid the Living Wage, and it was being written into agreements with
sub-contractors that their staff employed on C of E contracts must
be paid the Living Wage from 2015.
The Archbishop of York, Dr Sentamu, said that
this was not good enough. "York City Council has announced that, as
from April, all sub-contractors will be paid the living wage. If a
city council can do it, why can't we? You must try to persuade
Professor Burridge replied that he "enjoyed being pushed by the
Archbishop of York". As a member of the board of the Church
Commissioners, the Archbishop could "push a little harder than I
Responding to a question from Dr Anna
Thomas-Betts (Oxford) whether the EIAG could widen its
engagement on issues such as climate change with other parties,
such as the Government, Professor Burridge said that it was "right
that we have to engage elsewhere, particularly with the
Government"; but, he said, "that's why we have bishops in the House
of Lords and Mission and Public Affairs. We're tied up with ethical
In response to a question from the Revd Hugh
Lee (Oxford), Professor Burridge said that the EIAG had
been "in conversation with a number of companies" about
carbon-capture and storage facilities, and with oil companies
regarding exploration in the Arctic.
The Bishop of Warrington, the Rt Revd Richard
Finn (Liverpool), asked whether disinvestment closed the door on
engagement: "Is reinvestment possible?"
Professor Burridge highlighted the difference between the
approach of Vedanta and News International. With Vedanta, the EIAG
sent a representative to India to investigate its concerns, "but a
single shareholder with a majority share that wasn't going to
change the policies. . . So we did recommend to the NIB that they
should dispose of their investments. . . Many others who were also
concerned also disinvested, following our lead. . .
"What we have found with Vedanta is that suddenly they are
banging on our door, and asking us to come back and reinvest; and
asking what they would have to do to get us to reinvest; so now we
are re-engaging again. . .
"But, in the case of News Corporation, Rupert Murdoch was
somewhat rude about the Church Commissioners, and has not come
banging on our doors to have us back. I would love to think that
Rupert Murdoch lies awake at night quaking in his boots at the
thought of the Ethical Investment Advisory Group, but I fear that
he is not."
Penny Allen (Lichfield) said: "it seems ironic
that at the one end we have investments in alcohol, and at the
other we're mopping it up through street pastors."
Professor Burridge said that the EIAG had "come up with a very
long list of standards": "unless a company passes a test on each of
those, they won't be open for investment."
Jackie Butcher (Sheffield) asked what effect
the EIAG's engagement with Nestlé had produced: while the company
was compliant in some areas, it still "perpetuated malpractice"
Mr Featherby replied that the EIAG did "meet with Nestlé quite
regularly to discuss these issues"; he would be happy to hear about
"areas where Nestlé are not doing all that they could".