THE Church Commissioners' 2014 annual report, released on
Friday, reveals that they opposed two-thirds of the executive pay
deals in companies in which they have a
The Commissioners manage an investment fund of £6.7 billion on
behalf of the Church of England. Their report shows that they voted
in favour of remuneration packages at only 34 per cent of AGMs in
The annual return on the Commissioners' fund was 14.4 per cent
last year, slightly below the 2013 figure 15.9 per cent, but
comfortably beating their target of inflation plus five per cent,
which in 2014 totalled 6.6 per cent. A common comparison fund
reported an 11.7 per cent return, suggesting that, once again, the
Commissioners' investments outperformed the market last year.
The First Church Estates Commissioner, Andreas Whittam Smith,
writes in the annual report that, while "caution" remains the
Commissioners' watchword, the strong growth of their fund had now
wiped out the losses sustained in the early 1990s.
"New figures for the performance of the Commissioners' portfolio
over the past 30 years show that, since 1985, the portfolio has
appreciated by 9.8 per cent per annum, well ahead of inflation, and
in advance of similar funds."
In the report's foreword, the Archbishop of Canterbury writes
that 2014 was another "eventful" year in the life of the Church.
"There is constantly much to be done and the work of the Church
Commissioners is vital in providing necessary financial
In 2014, the Commissioners spent £215 million, which accounted
for 16 per cent of the overall cost of running the C of E. This
included £122.9 million on clergy pensions, £46 million on parish
ministry and mission grants, £32.3 million on the archbishops and
bishops, and £9.1 million on cathedrals.
Funding for dioceses, cathedrals, and bishops increased by one
per cent from 2013, and is due to increase a further one per cent
in 2015 and 2016.
As part of the Reform and Renewal programme unveiled earlier
this year, the Commissioners are considering dipping into their
fund to provide additional cash to train more clergy and lay
leaders. Mr Whittam Smith told the General Synod in February that
this would break their rule on "inter-generational equity", but was
necessary to stave off an "existential crisis" of decline in the
Church (News, 13
The report also highlights the Commissioners' drive to make
their investments greener and more ethical. During 2014 they
appointed a new head of responsible investment, Edward Mason, and
bought up significant amounts of forestry - becoming the UK's
largest private owner of woodland.
They have also persuaded Tesco, Morrison's, and Sainsbury's to
update their alcohol policies to recognise the harm it can cause,
and held meetings with 27 companies on environmental, social, and
Another notable success was getting the boards of BP and Shell
to back resolutions that would force the companies to include in
their annual reporting how they are reducing emissions and
researching into low-carbon energy (
News, 6 February). Furthermore, 4.5 per cent of the
Commissioners' total portfolio now qualifies for the Low Carbon
A rare failure came in the Commissioners' UK equities, which
only returned 0.7 per cent in 2014, compared with an average 1.2
per cent return on all shares last year. But in property, the
Commissioners saw impressive returns of an average of 27 per
But, over the past five, ten, 20, and 30-year time frames, the
fund has outperformed both their target of inflation plus five per
cent and a standard comparison fund.
This has resulted in large bonuses for the Commissioners' top
staff, including a £160,000 payment to the director of investments,
which took his total pay for 2014 to £409,000. Seven other members
of staff also received bonuses linked to the fund's performance,
pushing total remuneration to £5.5 million, up £500,000 on last