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 holding.     

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 2014.

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 resources."

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 February).

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 governance issues.

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 Investment Registry.

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 cent.

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 year.