THE Church of England Pensions Board has declined an invitation from the comedian Joe Lycett to disinvest from water companies that are spilling sewage.
The TV programme Joe Lycett vs Sewage, broadcast on Channel 4 on Tuesday, shows the comedian writing to the Archbishop of Canterbury, and inviting the Pensions Board to join him in disinvesting from Severn Trent Water.
“I know you legends like to make ethical investments, and previously cut your financial links with oil and gas companies like Shell over climate concerns [News, 23 June 2023]. I’m now asking you to join me and make a similar gesture in regard to the water companies.”
The company was fined £2 million on Monday for discharging about 240 million litres of raw sewage between November 2019 and February 2020 from the Strongford Sewage Treatment Works, Stoke-on-Trent, in Staffordshire, into the River Trent.
Failing infrastructure and under-investment have been blamed for continued sewage spills and the pollution of rivers, lakes, and canals throughout England.
The day after the programme was shown, the Pensions Board published a response to Mr Lycett, dated 21 December, its chief responsible-investment officer, Adam Matthews.
Mr Matthews wrote that the combined shareholdings of the Board in two water companies named by Mr Lycett were “less than half a million pounds”. He also confirmed that “the Board does also own debt in a number of companies within the sector.”
A spokesperson for the Pensions Board confirmed to the Church Times on Wednesday that it held £30 million in fixed-income bonds (Anglian Water, Northumbrian Water, South West Water Finance, Thames Water, United Utilities, Welsh Water, and Yorkshire Water) and £3250,000 in shares with Severn Trent Water and United Utilities. The investments were all expected to yield a dividend.
In his letter, however, Mr Matthews wrote that the Board was committed to encouraging “change in and by the sector, which a one-off disinvestment in the short term would limit. We use disinvestment as a last resort when we assess that our influence as an investor is not achieving the desired results, but we have not yet reached that point with the water companies.”
The letter continues: “Where our analysis indicates that we have a useful role to play, our preference is to remain invested as a means of applying influence. However, as recently demonstrated by the example you mention of the Pensions Board’s divestment from the oil and gas sector, the Pensions Board does not rule out disinvesting from companies or refusing to fund future debt if we believe the management are not suitably responsive to our engagement. That form of escalation could also be an option for water utility companies, but it is not one that we are recommending to our Trustees as being necessary at this stage.”
Mr Matthews went on to write that the Board remained “deeply concerned by the operation of several [water] companies, the effectiveness of the regulation of the sector and also how investors can better engage with the sector to improve it. Given the level of concern and the issues that you rightly raise, this is not an easy task but we view that progress and improvements are possible.
“To this end, the Pensions Board are engaging a number of companies relating to their plans to address historic underinvestment in key infrastructure, the burden of future finance on their customers, the resilience of the sector to extreme climate impacts and, ultimately, how individual company Boards retain or seek to regain the confidence of their customers and the social licence of wider society.”
Last year, the Pensions Board published its first Climate Action Plan (News, 8 December 2023), which confirmed its decision to disinvest from companies in the oil and gas sector, and fossil fuels in particular, because of environmental concerns.