THE Church Commissioners have warned that they may vote against company boards that lack ethnic diversity, in a new push to use their £8.7-billion investment fund as a tool to bring about change in business.
The Commissioners have increased their activism as shareholders concerning climate change in recent years, joining with other consciously ethical investors to press fossil-fuel firms to do more to reduce emissions (News, 18/25 December).
Now, the Commissioners, who provide the Church of England with more than £100 million from its historic endowment each year, have pledged to consider also the representation of ethnic minorities on company boards, when it comes to exercising their financial influence.
The Commissioners’ new head of responsible investment, Bess Joffe, told The Guardian that letters outlining the new expectations of diversity on boards would shortly go out to the least diverse in their portfolio.
If they did not improve diversity in senior positions, the Commissioners would begin protest votes at shareholder meetings, she warned. “Ethnic diversity has not been a priority in any real way for companies. They have to play their part in improving the lives of people who have been disenfranchised and left behind, and who are going to suffer [disproportionately] as a result of Covid.
“You want to be in a world where boards of directors, management teams, and pipelines of talent look like the communities in which they exist. I think you’ll see some vote impact as early as 2021.”
Ms Joffe said that her team was currently rethinking the Church’s ethical-investment priorities based on two aims: respect for the planet and respect for people. “I think that fits really well with the Church’s overall mission,” she told The Guardian.
The move was praised by the Bishop of Manchester, Dr David Walker, who is the deputy chair of the Commissioners. “As church investors, we’re ramping up our shareholder influence, encouraging businesses to appoint leaders who reflect the ethnic diversity of the communities they serve. And, yes, we’re working to increase that same diversity in our own leadership, too,” he wrote on Twitter.