General Synod: climate change and investment

Companies have until 2023 to act or face disinvestment, Synod told

PHOTOGRAPHY BY MARK WOODWARD AND DANIEL EASTON

The First Church Estates Commissioner, Loretta Minghella, addresses the Synod

The First Church Estates Commissioner, Loretta Minghella, addresses the Synod

THE debate on climate change and investment was held on Sunday afternoon, preceded by a presentation on the progress made by the national investing bodies (NIBs) since 2015 on the climate-change strategy.

This was given by the First Church Estates Commissioner, Loretta Minghella, and the Chair of the Pensions Board, Dr Jonathan Spencer, and included a film produced by the Church Commissioners and featuring bishops and NIB staff, outlining both the threat of climate change and arguing in favour of sustained engagement with fossil-fuel companies to drive change.

The Church Commissioners’ head of engagement, Adam Matthews, spoke of disinvestment from coal assets by mining companies as evidence of the beginning of a transition away from fossil fuels.

Ms Minghella recalled joining the Ethical Investment Advisory Group (EIAG) after returning from a trip to the Philippines as CEO of Christian Aid, where she had heard “tales of bereavement and trauma”, including the story of a mother who had to swim for hours as her children cried out “Mum, Mum, how long do we have to keep on swimming?”, in the wake of Typhoon Haiyan. Her question — “So what are you doing about climate change?” — was “seared on my memory”.

Climate change was “the most complex and important socio-economic, environmental, and moral issue of our time. It is claiming lives and ruining livelihoods. And the NIBs know that it is a wicked problem in every sense of the word.”

She argued that the NIBs were already achieving successes. For example, at the end of 2017, less than five per cent of funds were invested in the big oil and gas companies, while companies working on climate solutions attracted almost ten per cent. These investments gave the Church “the opportunity to be in the room”.

MARK WOODWARD AND DANIEL EASTONValerie Hallard (Carlisle)

Dr Spencer presented a series of slides setting out how the NIBs had delivered against the commitments that they had made in 2015. This included the launch of the Transition Pathway Initiative (TPI), “an open source tool . . . so that anyone can judge what progress is being made”. There were already £7 trillion of funds supporting TPI. TPI had already assessed 154 companies. The NIBs had already voted against chairs of companies that ranked poorly against it.

“We are beginning to see clear signs this strategy is working in Europe amongst the major oil and gas companies,” he said.

He noted that Shell, Total, and ENI had all announced “serious emission reductions” and that Rio Tinto had left coal production. The NIBs had all increased investments in renewables: the Commissioners were one of the largest owners of forestry. He concluded that the current approach was “not an easy strategy, as that would be to walk away, and leave the heavy lifting to others. Our approach is to do all we can to drive long-term systemic change. But this is not a short-term task. and cannot be completed within the next 18 months.”

Ms Minghella reported that investors had come up to her to say thank you for the C of E’s leadership. She was proud to report that “we have some of the world’s best people on our team” — a remark that drew applause. She also emphasised that the NIBs were prepared to “start to separate the sheep from the goats” in 2020: “in some cases, there will be a clear-cut case for disinvestment,” but other companies were making efforts, and would require “intensive engagement”.

The Bishop of Oxford, Dr Steven Croft, said that, “as a measure of how far we have to go”, last year BP had carried out its biggest oil exploration since 2004, and Shell was still claiming on its website that it had no plans to commit itself to disinvestment within the next 20 years. Only four or five per cent of its shareholders had voted for emission reduction at its AGM. “The world is on a trajectory to catastrophic climate change if nothing else is done,” he said. “We need a debate grounded in change.”

The most important figure from the Paris Agreement was not two degrees, but zero, Dr Croft argued. “We need net zero carbon emissions to stabilise global emissions. If the Paris targets are to be met, this needs to be achieved by 2050. Therefore, any company making 40-year plans does not believe they will be met, or is not committed to meeting them.”

The most important question to ask companies was what their plans were to reduce carbon emissions to zero, and how they intended to remain profitable in the process. He was grateful for the work that the TPI had done, but there was a growing community of churches and investors for whom engagement was not enough, and not fast enough, he said. “Internal engagement needs to be combined with external pressure.”

If his amendment was carried, “we would not be walking away,” he assured the Synod. “Engagement can continue by different means.”

Ms Minghella responded, agreeing that many companies were not on track to meet the Paris targets. She was against “blowing the final whistle” before the NIBs had had a chance to make a final attempt to engage with these companies to bring about change. The proposal to disinvest in the amendment was “dangerously blunt”, given where the Church was currently.

“We don’t want these companies to fail; we need them to change,” she said. Disinvestment would result in the “abdication of responsibility” by the Church. Its shares might be bought by others who did not care about climate change, she warned.

“We have a mountain to climb,” she told the Synod. “Please don’t set us up to fail.”

THE Bishop of Manchester, Dr David Walker, proposing the motion on climate change and investment, declared an interest as acting chair of the Ethical Investment Advisory Group (EIAG). The last time he had led a debate about climate change, the Paris Agreement had created a framework for how to tackle it.

The Church needed to make use of all tools at its disposal: disinvestment, engagement, and positive investment.

The NIBs had already disinvested from the worst fossil-fuel companies, including thermal mining and oil sands. There was still much more work to be done to meet the Paris Agreement, which was why the TPI was so important. Using it, they could see how ethical the companies that the Church invested in were.

The Bishop of Oxford’s amendment “cuts the legs from under” the TPI and the NIBs’ approach to tackling climate change. Disinvestment would leave the Church’s strategy in tatters. He was, however, sympathetic to Canon Goddard’s amendment, which set a deadline of 2023, which fitted in more with the NIBs’ plan. He urged the Synod to back the investing bodies’ plans again, and “strengthen our hands as we drive towards a low-carbon future”.

Valerie Hallard (Carlisle) urged the Synod to back a transition from fossil fuels to renewable energies: point (f) of the motion. She discussed wind farms offshore, and said that they did not have a big impact on bird populations. She also talked about plans to build a tidal lagoon, which looked unlikely to happen after the collapse of the Swansea Bay tidal scheme. There was also nuclear energy. The Government’s regrettable retreat from renewable energy meant that they would not meet the Paris targets.

Canon Martin Gainsborough (Bristol) remarked: “We are kidding ourselves if we think technology will solve all our problems.” They needed to change their economic system for the good of the environment. He urged the Church to “lock horns” with thorny questions about economic growth, and find a distinctly Christian response.

The Archbishop of York, Dr Sentamu, spoke of his visit to the South Pacific and the impact of climate change in Fiji. “What is constructive in this search for answers is what we find on the way.”

Arrogance and greed were damaging the planet. “Modern technology has allowed us to lead a life of comfort literally at our fingertips, but it has come at the cost of great damage,” he said. “Treating the environment as family can rearrange our hearts and minds.”

MARK WOODWARD AND DANIEL EASTONThe Archbishop of York, Dr Sentamu

Every year that they failed to cut carbon emissions made an impact on the poorest people around the world; but the Church’s investing bodies could have an impact on companies. “We have a seat at the table, and, boy! do we use it, and use it well,” Dr Sentamu said. He would not be voting with the Bishop of Oxford’s motion, as 2020 was too soon; he urged the Synod to unite around Canon Goddard’s “clever framework”, and concluded: “Loretta, we support you. . . Be bold.”

Dr Croft, introducing his amendment, said that it came from a sense in parishes that climate change was not being tackled enough. He would support Canon Goddard’s “helpful amendment”, but could not vote for the motion as long as clause (e) stood as it was.

By 2020, the priority should be disinvestment over engaging, Dr Croft said. “The world is not aiming for a low-carbon economy: it is aiming for a carbon-zero economy. Nothing else is enough.”

He urged the Synod to support his amendment, because climate change needed to be tackled quickly; but, if it could not do so, to support Canon Goddard.

Canon Giles Goddard (Southwark) said that TPI had become bigger and more far-reaching than he had envisaged, and that he was proud of the work that the Church was doing. His amendment would continue to hold the NIBs to account but also give the TPI time to demonstrate how effective it could be.

The churches were in a unique position: they had been at the forefront of work on investment and climate change. He did have “some anxiety about relationship between haste and urgency”; his amendment gave a clear end point of 2023, by which point, if there was not clear evidence of change, the NIBs would disinvest. It gave urgency but did not force haste.

PHOTOGRAPHY BY MARK WOODWARD AND DANIEL EASTONThe Second Church Estates Commissioner, Dame Caroline Spelman

The Second Church Estates Commissioner, Dame Caroline Spelman MP, argued that “the most effective way to achieve lasting change is through a policy of engagement.” It was only when a coalition of business, civil society, and the public spoke with one voice that governments and international bodies “get serious about finding global answers”.

She urged the Synod to engage with the Commissioners and “lobby them to be firm and go further, but allow them that flexibility they need to rise to the challenges we have given”. Disinvestment would generate “widespread relief across the business sector that one of the key actors prepared to challenge them is leaving the stage”.

Dr Croft moved his amendment.

Dr Walker responded with an analogy with the Bayeux Tapestry, which showed Harold “encouraging” his troops by prodding them with his sword. The Oxford amendment appeared to encourage and strengthen the hand of the Commissioners, but would, in fact, backfire: “as soon as companies know that, if they remain motionless until 2020, we are out, some of them will think ‘We can abide 18 months and lose this uncomfortable shareholder and the pressure will be off.’”

The Third Church Estates Commissioner, Dr Eve Poole, spoke against the Oxford amendment. She had written her doctoral thesis in Lambeth Palace Library on the subject over a 20-year period. Their track record in the 1970s had not been so good, she said, but the diocese of Oxford had saved that reputation by calling out the Church on its “thin approach” to investment. “It took a long while to hear,” but she was delighted that things had changed.

The Church had won some incredible victories, she said, and many were now following the Church’s lead. “We are asking Synod to protect our negotiating position. If these companies know that you have called us to divest anyway, why would they try? Like Jacob, we must wrestle until daybreak until the angel blesses us.”

Canon Sue Booys (Oxford) spoke as a “convert” to the Oxford amendment. Her conversion had happened on a visit to its link diocese of Cape Town. “When it began to rain, children ran out of church into the rain. It did not rain again for eight weeks,” she said. South Africa was warming at twice the rate of the global average.

MARK WOODWARD AND DANIEL EASTONThe Bishop of Salisbury, the Rt Revd Nicholas Holtam

Carl Hughes (Southwark) had worked with companies in the oil and gas sector for most of his life. “We need to transfer this energy to a low-carbon sources, while ensuring that we can produce affordable energy.” The demand was not static, but increasing, which made transition critical, he said. “It cannot happen overnight.”

“Breaking up is hard to do,” said April Alexander (Southwark), a Church Commissioner. She reminded the Synod that it had voted unanimously in July 2015 for the NIBs to “engage robustly” with energy companies. The NIBs had been “successful beyond our wildest imagination”, she said. “Now it is being suggested that they break away from that agreement long before they see it achieved.”

The Bishop of Salisbury, the Rt Revd Nicholas Holtam, gave examples of how the Church had been seen as a leader in ethical investment. He chaired the environmental working group, which had been engaging local churches with this agenda, with notable success. The Church was one of few institutions that could give a “God’s-eye view” of what was happening with the environment.

He praised the 900 churches that had joined the Eco Church programme, although there was no Eco diocese. Shrinking the Footprint had enlisted 2000 churches; and the Church Times Green Awards had attracted hundreds of projects. After the success of the plastic-free Lent campaign, he suggested a plastic-free Synod.

Kathryn Winrow (Oxford), supporting the amendment, said that the Synod had heard at least four times that time was running out. “If you are a child or parent in Bangladesh, Fiji, South Africa, and elsewhere, time has already run out. . .

”The Church simply cannot continue to invest in companies who place a profit margin above the environment and God’s children.”

The amendment was lost.

Canon Goddard formally moved his amendment, and Dr Walker supported it.

Mark Russell (Sheffield) supported Canon Goddard’s amendment. He wanted Ms Minghella to be given the ability to put pressure on companies.

Clive Scowen (London) said that a chief executive of a fossil-fuel company would be more frustrated by an investor who turned up every year than by disinvestment, whether it was in 2020 or 2023.

The amendment was supported by Annika Mathews (C of E Youth Council). New ways to find fossil fuels were proving very damaging. It was necessary to have a deadline for investment, and 2023 was suitable.

The amendment was carried.

The Bishop of Huddersfield, the Rt Revd Jonathan Gibbs (Northern Suffragans), praised the Church for offering “global leadership”.

The motion as amended was carried by 347 to 4, with 3 recorded abstentions.

That this Synod:

(a) welcome the worldwide agreement in Paris in December 2015 to hold “the increase in the global average temperature to well below 2°C above preindustrial levels” and to pursue “efforts to limit the temperature increase to 1.5°C above pre-industrial levels”;

(b) affirm, as it did in 2015, its support for the climate change policy recommended by the EIAG and adopted by the National Investing Bodies (“the NIBs”) in 2015;

(c) welcome the NIBs’ disinvestment from companies focused on thermal coal mining and the production of oil from oil sands;

(d) welcome the NIBs’ establishment of the Transition Pathway Initiative (TPI) to track whether major companies associated with high carbon emissions are aligning their business plans with the Paris Agreement;

(e) urge the NIBs to engage urgently and robustly with companies rated poorly by TPI and, beginning in 2020, to start to disinvest from the ones that are not taking seriously their responsibilities to assist with the transition to a low carbon economy;

(f) urge the NIBs to ensure that by 2023 they have disinvested from fossil fuel companies that they have assessed, drawing on TPI data, as not prepared to align with the goal of the Paris Agreement to restrict the global average temperature rise to well below 2°C; and

(g) urge the NIBs proactively to seek and scale up investment in renewable energy and low carbon technology.

 

Read a report of every General Synod presentation and debate from York 2018, here

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