JAMES FEATHERBY, who chairs the Ethical Investment Advisory Group (EIAG), delivered a presentation on its policy-development process, key recommendations, and the debate about disinvestment and engagement.
He emphasised that the EIAG did not provide financial advice to the investing bodies. He explained that the Group had consulted “widely” within the Church and from “leading economic and environmental experts”. Its conclusions had been: first, that “the key task is an urgent but orderly transition to a low-carbon economy.”
Second, while it was “right” to disinvest from coal and tar sands, “the most significant ethical contribution the national investing bodies [NIBs] could make as church investors is to engage with major fossil-fuel producers and users.”
Third, there was a need for flexibility: the policy could change. Immediate disinvestment from all fossil-fuel companies was not the best ethical response.
Dr Jonathan Spencer, who chairs the Pensions Board, spoke about what the NIBs were doing in response to the EIAG. The NIBs had disinvested £12 million of shares from coal and oil sands. This had sent a “strong signal on the moral imperative of an energy transition”. Another strand to the approach was investment. It had made a commitment to investing six per cent of its growth assets in “core, socially useful infrastructure projects”.
The third lever was engagement with companies. And the final lever was engagement with policy-makers: “The most effective and efficient way of mitigating climate change is through internationally co-ordinated public policy.” The NIBs would finance a new position at the Institutional Investors Group on Climate Change.
After the presentations, it was open to Synod members to ask questions.
The Revd Hugh Lee (Oxford) asked about the danger of investing in oil companies and whether they could become “stranded assets”. Mr Featherby said that “It is not our role to advise the national investing bodies on those sorts of issue.”
“Given that fossil fuel is still a relatively cheap form of energy,” Canon Giles Goddard (Southwark) said, “how can the little that still needs to be burned be reserved for the poor of the world?” Responding, Mr Featherby said that “we need to make the point very strongly to public-policy makers that low-income countries need ethical access to sustainable energy.”
Within the UK, he said, “we are going to have to accept that those of us who can afford it are going to have to . . . pay more to subsidise those who are struggling to afford it.”
Clive Scowen (London) asked: “Wouldn’t the threatened loss of activist shareholders have most CEOs celebrating? Why is it thought that the possibility of us selling our shares is any sort of threat?”
The Revd Professor Richard Burridge (University of London) gave two examples: Rupert Murdoch “has not lost any sleep” after the C of E’s disinvestment from News Corp; and when the Church divested its shares from an extraction company that had refused to engage with it, “lots of other investors followed.” The company had since been back in touch with the Church, and was now talking about how it could improve.
Tim Hind (Bath & Wells) asked what engagement was taking place with people in charge of public policy, especially to pre-empt any negative unintended consequences of new cleaner technologies.
The Revd Stephen Trott (Peterborough) said that progress could not be made until green energy was cheaper than fossil fuels. “But could we use part of our investments in a prophetic manner by investing in research and development start-ups that might otherwise not receive investment?” he asked.
Ian Fletcher (West Yorkshire & the Dales) said that companies did listen to what the Church of England said. He also said that the Budget that had imposed the climate-change levy on green energy needed to be raised with the Government.
He reminded the Synod members that, whenever they paid for energy, they, too, were investors, and could invest in green power.