General Synod sets church investors target on fossil-fuel recalcitrants

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A man helps a young girl light a candle for a family member who died in Typhoon Haiyan, in Tacloban, Philippines

A man helps a young girl light a candle for a family member who died in Typhoon Haiyan, in Tacloban, Philippines

THE investors in charge of the Church of England’s £8-billion funds have been instructed to disinvest from fossil-fuel companies by 2023 unless the latter can prove that they are on the path to tackling climate change.

Members of the General Synod rejected a proposal to bring forward the deadline to 2020, despite backing from NGOs, after several speakers argued that it would mean losing the potential to exert shareholder power.

The Bishop of Manchester, Dr David Walker, deputy chair of the Church Commissioners, warned: “Unilateral, wholesale disinvestment from fossil-fuel firms in 2020, or beginning in 2020 based on assessments in 2020, would leave our strategy, and influence, in tatters. . .

“It would not spur companies on to change further and faster. It would do the exact opposite; it would take the pressure off them. Now is not the moment to do that.”

Members voted for a motion that affirmed the national investing bodies’ (NIBs’) current approach to tackling climate change, which combines scrutinising companies’ business plans through the Transition Pathway Initiative (TPI) (News, 13 January 2017), shareholder engagement (including leveraging the threat of disinvestment), and increased investment in renewable energy.

It was amended by Canon Giles Goddard (Southwark) to urge the NIBs to ensure that by 2023 they have disinvested from fossil-fuel companies that were “not prepared to align with the goal of the Paris Agreement to restrict the the global average temperature to well below 2ºC”.

Canon Goddard said that his amendment would continue to hold the NIBs to account, but also give the TPI time to demonstrate how effective it could be. He had “some anxiety about the relationship between haste and urgency”.

It was welcomed by Dr Walker. He firmly rejected, however, an amendment from the diocese of Oxford setting a deadline of 2020 (News, 5 July 2018), comparing it to an image in the Bayeux Tapestry which was described as showing King Harold welcoming his men, but in fact depicted him prodding them with his sword.

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“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 share-holder and the pressure will be off,’” he warned.

He was supported by the Second Church Estates Commissioner, Dame Caroline Spelman MP, who argued that disinvestment “offers little more than a one-off piece of media coverage and a listing in the divestment campaigners’ catalogue of supporters”.

The Bishop of Oxford, Dr Steven Croft, cast doubt on fossil-fuel companies’ commitment to change, BP had carried out its largest oil exploration since 2004 last year. “The world is on a trajectory to catastrophic climate change if nothing else is done,” he said. “We need a debate grounded in change.”

On Saturday, the former Archbishop of Canterbury, Lord Williams, offered support for disinvestment, arguing that the vote was “an opportunity for the Church of England to encourage our society to take control of a question which threatens to overwhelm us before it is too late”.

In the end, the Commissioners’ account of engagement held sway with members.

A presentation by the chair of the Pensions Board, Dr Jonathan Spencer, noted that Shell, Total, and ENI had all announced “serious emission reductions”, and that Rio Tinto had left coal production.

Members applauded after the First Church Estates Commissioner, Loretta Minghella, paid tribute to the NIBs’ staff: “we have some of the world’s best people on our team.” She reported that, at the end of 2017, less than five per cent of funds were invested in big oil and gas companies, while companies working on climate solutions comprised almost ten per cent.

These investments gave the Church “the opportunity to be in the room. . . Persuading a big company to change generally requires winning the hearts and minds of institutional shareholders, and we have shown we can do that, time and time again.”

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.”

At the beginning of the debate, she described her visit, as chief executive of Christian Aid, to the Philippines in the wake of Typhoon Haiyan. She had spoken to a mother who had to swim for hours as her children cried out “Mum, Mum, how long do we have to keep on swimming?”. Her question — “So what are you doing about climate change?” — was “seared” on her memory.

”I want to be able to say to her, and to all those suffering its impacts: ‘We see you, we hear you, and you don’t have to keep swimming any more,” she told Synod members.

Responding to the vote, Christian Aid’s head of UK advocacy, Tom Viita, said that it put companies “on notice”. “Despite having known about climate change for decades, none of the oil and gas companies has a business plan that aligns with the goal of 2ºC, or the Paris Agreement’s more urgent goal of 1.5ºC,” he said.

“Today, they must hear loud and clear: the Church, along with many other investors, expects them to honour international goals by fundamentally changing their business models, or face the consequences.”

James Buchanan, from Operation Noah’s Bright Now disinvestment campaign, said on Sunday that Synod had “drawn a line in the sand”.

He said: “It is unethical for Churches to profit from companies that are causing the very harm they seek to alleviate.

“Today, the Church of England has drawn a line in the sand and, given the increasing financial risk of fossil-fuel investments, they would be well advised to divest sooner rather than later.”

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 the full debate, here, and find reports on every other General Synod presentation and debate from York 2018, here

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