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Church Commissioners report that they will continue to invest in ‘heavy emitters’

25 June 2021

Church Commissioners

Cover image from the stewardship report

Cover image from the stewardship report

THE Church Commissioners will continue to invest in “heavy emitters” as they seek to achieve a portfolio with net zero carbon emissions by 2050 (News, 23 April), in the belief that constructive dialogue is the best way to drive change.

While other Churches have opted to disinvest from fossil-fuel companies (News, 7 May), the Commissioners argue in their stewardship report, published on Tuesday, that “being a responsible investor means being an active one, using the power of our voice to encourage companies to make the changes the world needs”.

The report, For the Common Good: Stewardship at the Church Commissioners, has been published to comply with the Stewardship Code of the Financial Reporting Council (the regulator for auditors, accountants, and actuaries), which asks signatories to measure how they are performing against its 12 principles.

The Commissioners look after a £9.2-billion endowment fund. Climate change is described as their “top engagement priority. . . We believe in undertaking constructive dialogue with companies, even when they are heavy emitters. We are committed to engaging with such companies and encouraging them to invest into low carbon solutions for their respective sectors. In cases where companies are unwilling to have proactive dialogue with us or other investors, we then consider divestment, as demonstrated through our climate-related investment restrictions programme.”

In 2020, the Commissioners “committed to start disinvesting from companies that are not taking seriously their responsibilities to help the transition to a low carbon economy”. It also restricted investment in nine companies judged to have fallen short of specific carbon-emission standards (News, 18 December 2020).

Among those who have argued for a tougher approach to companies is the Bishop of Oxford, Dr Steven Croft (News, 6 July 2018), who called for disinvestment from recalcitrant companies to begin in 2020. The diocese has disinvested from all fossil fuels (News, 5 December 2014). Some clergy have protested against the existing dialogue strategy (News, 4 June).

The report acknowledges that, at the end of 2020, the carbon footprint of the Commissioners’ portfolio did not meet its benchmark: 335 tonnes of carbon-dioxide emissions per £1 million of revenue rather than 222. This was the result of “a small number of stock selection decisions by some of our fund managers”, and did not take into account the investment restrictions announced in December 2020.

The report also looks at the Commissioners’ land holdings, calculated to be sufficient for about 28,500 new homes, of which about 8600 are expected to be “affordable”. The Archbishop of Canterbury’s Housing Commission, which reported earlier this year (News, 26 February), has called on the Church to commit itself to “using its land assets to promote more truly affordable homes”, asking whether the Commissioners could be “sacrificial as they develop out this land and accept, if necessary, a lower price for their land in order to deliver more affordable housing”. It suggested that legal changes might be necessary, to give the Commissioners freedom to pursue this.

The report notes that the Commissioners voted against 17.8 per cent of management resolutions, the main trigger being executive pay, auditor independence, and board composition, including cases where bonuses were considered to be “excessive”. Votes against included the chair of a nomination committee when less than 33 per cent of a board was composed of women.

The Commissioners’ own diversity is also presented. In 2020, a total of 10.9 per cent of staff classed themselves as BME, while 40 per cent of those in senior positions were women. The percentage of those who classed themselves as having a disability was 3.3 per cent.

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