Speed up disinvestment from fossil-fuel companies, Church of England told

15 June 2018

ISTOCK

THE Church should rapidly disinvest from fossil-fuel companies and invest in clean alternatives, a new report suggests.

The report, Fossil Free Churches: Accelerating the transition to a brighter, cleaner future, published by Operation Noah on Monday, argues that the transition from fossil fuels to renewable energy needs to be quicker to meet the terms of the Paris Agreement: “To accelerate the transition to a net zero carbon economy, Churches must divest from fossil-fuel companies and reinvest their money in clean alternatives — not later, after years of ‘engagement’, but now.”

The Church of England still has significant investments of more than £190 million in oil companies, including Shell and BP, the study says, despite disinvesting from coal and tar sands in 2015.

It continues: “While most UK Churches have taken steps to divest from the most polluting fossil fuels . . . many have opted for a policy of ‘engagement’ with oil and gas companies. Yet there is little sign that notice is being taken.

“The argument for engagement is that activities such as putting forward resolutions at shareholder meetings can have a greater influence than divestment. A further argument against divestment is that investors lose all their influence by divesting from fossil fuels.

“However, if an investor wished to engage with fossil-fuel companies, it could do so while holding the minimum possible number of shares, which would give a clear signal that it did not believe in profiting from the fossil-fuel industry.”

James Buchanan, who works on Operation Noah’s divestment campaign Bright Now, said on Monday: “It is time for Churches to get out of the problem and get into the solution by divesting from fossil fuels and increasing their investments in renewable energy and clean technologies — bearing witness to their own congregations and the whole of society about the future they wish to see.”

Dr David Atkinson, an honorary assistant bishop in Southwark diocese and the former Bishop of Thetford, said: “I have admired the determination of church investors to bring shareholder pressure to bear on major oil companies.

“However, the sluggish response, and the increasing urgency of the need to respond to climate change indicate that now is the time for the Churches to divest from oil and gas, and reinvest in clean energy.”

The report also argues that, while the Church has played a “more prominent role” in the debate over transition from fossil fuels to renewable energy, through its work with the Transition Pathway Initiative (TPI), engagement with investors is unlikely to work.

The Director of Ethics and Engagement for the C of E’s Pensions Board, Adam Matthews, said on Tuesday that the TPI, an online data-analysis tool for investors to help them to assess how effectively companies are addressing climate change (News, 13 January 2017), has the backing of £5-trillion-worth of assets, and gives the Church “a lot of muscle power”.

Mr Matthews said: “There is a movement of asset owners and fund managers in charge of trillions that are willing to use their votes — and sometimes shareholder actions — to drive the change towards transition. . . I can understand divestment for organisations that are unable to gain broader traction with other asset owners, but the C of E is differently placed because of TPI.

“We are very much at the forefront of the key debate over transition with the oil and gas sector, as well as others. I really do not think we should be walking away from this.”

A spokesman for the Church Commissioners and the C of E’s Pension Board said on Tuesday: “We share Operation Noah’s conviction that climate change is an urgent ethical issue requiring a robust response from the Church and from investors. That is why we think it is crucial to use all of the tools at our disposal to pressure companies to do more on this — including engagement with companies and policymakers, investing in low-carbon opportunities, and divestment — where companies are failing to make sufficient progress.

“Our record shows that we will disinvest when engagement is not working. We have made a commitment to review the progress of companies covered by TPI in 2020, when governments next submit their Nationally Determined Contributions to the implementation of the Paris Agreement, and to start divesting from companies that are not taking their responsibilities seriously.

“This approach was endorsed by Synod 255-0 in 2015, when they endorsed our climate-change policy, and we look forward to reporting back to Synod in July.”

Mr Matthews said: “We welcome the Synod debate. There is no disagreement over the objectives with climate change: the whole debate is over the tactics.”

On Wednesday, a guide to managing the risks of climate change for asset owners was released, in conjunction with the Church Commissioners.

Papal rebuke. Pope Francis told the heads of large oil companies that there was “no time to lose” to address climate change, at a meeting at the Vatican last weekend. It was “disturbing, and a cause for real concern”, he said, that carbon emissions have continued to rise since the Paris Agreement. “Even more worrying is the continued search for new fossil-fuel reserves, whereas the Paris Agreement clearly urged keeping most fossil fuels underground”.

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