New Church of England policy targets extractive industries

10 November 2017

PA

Aflame: the Longford Gas Conditioning Plant in Longford, Gippsland, in south-eastern Australia, an ExxonMobil project opened in May

Aflame: the Longford Gas Conditioning Plant in Longford, Gippsland, in south-eastern Australia, an ExxonMobil project opened in May

THE national investment bodies of the Church of England — the Church Commissioners, the CBF, and the Pensions Board — have threatened to disinvest from extractive companies that fail to comply with its latest policy on ethical investment.

The Extractive Industries Policy, published on Monday, is the culmination of two years of theological reflection and research on the industry, which includes the extraction of oil and gas, mining, quarrying, and dredging. “Extractive industries remain among the most controversial of economic activities,” it states.

“For some, they have been a blessing . . . for wealth creation and sustained future prosperity. For others, they have contributed to a ‘resource curse’: windfalls of income have not provided the expected benefit, they have been squandered or, even worse, misused, leading to macroeconomic and political instability, to inequity and increased poverty.”

The main ethical concerns are not, however, in the act of extracting raw materials, but in the conduct of business, the policy says. Companies have a responsibility to uphold basic standards of human rights; avoid corruption and pay taxes; protect the environment and ecology; and monitor social and economic concerns, such as labour standards, community engagement, fair pay, and collective representation.

“It is significant that there is nothing in scripture to say that you should not extract,” the head of engagement for the Church Commissioners and Pensions Board, Adam Matthews, explained on Tuesday, “but when you do, you have an enormous responsibility to protect the environment, communities, and economies of those effected.”

The policy does, however, bar companies that extract on world heritage or protected sites: “The range of risks includes ecological damage to important biodiversity; water contamination; soil erosion exacerbated by roads, pipelines, and associated infrastructure; unexpected operational disasters such as spills and tailings [leftover waste] releases; and, of course, the impact on greenhouse gas emissions both through operations and with respect to the final product consumption.”

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It also warns against the dilution of human rights and health-and-safety standards where joint ventures are undertaken. It comes after 19 people were killed and two villages destroyed two years ago by a collapsed dam owned by the Brazilian mining company Samarco, a joint venture between BHP Billiton and Vale of Brazil.

“The frequency of breeches to tailings dams where life has been lost is too often,” Mr Matthews said. “We have been to visit communities in South Africa and Zambia; we have met with mining communities and the widows of people who have been killed in mining incidents, to understand the depth and complexity of issues in the sector, which we have highlighted clearly in the policy.”

He has been meeting with chief executives of some of the largest mining companies in the world to address these concerns, and will be conducting an annual assessment on their response and commitment to ethical conduct in the industry.

Should these standards not be met, the C of E will sell its shares without hesitation, he says. “We recognise that this is a journey, but we have high expectations that companies will be responsive, which is why we have made it clear that if a company is unresponsive, or refuses to seriously engaging with us, then we are willing to disinvest — as we have done before.

“We are also conscious that communities in the Anglican Communion are impacted heavily by mining. Ultimately, our hope is that this policy is raising the bar in terms of our expectations of company performance, but that it also leads to significant change. In years to come, I think that this will be expected good practice.”

The Bishop of Manchester, Dr David Walker, who is the acting chairman of the C of E Ethical Investment Advisory Group, concurred. “Our approach to policies like this is grounded in theology, and is also practical and seeks to ensure we play our role as a faith investor in supporting those companies that seek to improve their practice and play their part in contributing to the good of society.”

It comes after calls for the Church of England to “show moral leadership” and immediately disinvest from the oil giant ExxonMobil, which denies that it contributes to climate change, despite fierce criticism from environmental campaigners.

A letter to The Guardian on Tuesday, signed by five bishops and more that 40 clerics, states: “While many of us believe that the Church of England should divest from all fossil fuel companies for ethical reasons, we are especially concerned about the Church’s continued investment in US oil and gas company ExxonMobil.

“Now is the time for decisive action. We call on Church of England investors to take the lead and immediately divest from ExxonMobil.”

A spokesman for the C of E’s investment bodies said on Wednesday: “Clearly we share concerns about ExxonMobil. These concerns resulted in the successful passing of a resolution at the 2017 AGM, sponsored by us and others, requesting disclosure of scenarios analysis from 2018 by Exxon — something which would not have been possible had we divested.

“We remain in private engagement with the company, and fully expect changes in Exxon’s reporting practice on climate change as a result.”

Read the full policy here.

 

Councils not disinvesting from fossil fuels. THE investment of more than £16 billion of workers’ pension funds in fossil-fuel companies last year “flies in the face” of the Paris Agreement, environmental campaigners have said during the COP-23 international climate talks in Bonn.

Councils in the UK invested £16.1 billion out of a total of £287.9 billion in pension funds into companies that extract coal, oil, and gas, data released on Thursday by the campaign group Go Fossil Free has found.

Manchester, Dumfries and Galloway, Torfaen, Hammersmith and Fulham, and Merseyside authorities were among the most exposed to fossil-fuel investments. The figures represent “no significant change” on 2015 investments, despite pressure to take climate risk into account, Go Fossil Free says.

Jane Thewlis, a disinvestment campaigner and member of the West Yorkshire Pension Fund, said: “Our pensions are investing in the companies responsible for the climate crisis. This flies in the face of the Paris Agreement, and of all the efforts being made locally to reduce emissions and combat climate change. It’s time to divest.”

The group also noted councils who had chosen to disinvest from fossil fuels in favour of cleaner energy, including Lancashire County Council, which had invested £12 million in a community-owned solar farm, Westmill Solar Co-operative.

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