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 The church's Ethical Investment Advisory Group (EIAG) is reviewing
its policy on ethical investment related to climate change, with
some church officials calling for disinvestment from such companies
to highlight the need to move to a low-carbon economy.
The Church of England, mother church of the world's 80 million
Anglicans, holds total investments worth about 8 billion pounds ($13
billion) that are used to pay clergy pensions and fund the church's
work.
Some is invested in funds but the church also has direct investments
of more than 10 million pounds in Shell <RDSa.L>, BP <BP.L>, Rio
Tinto <RIO.L> and BHP Billiton <BHP.AX>.
The diocese of Southwark last July passed a resolution for the
church to completely divest from fossil fuels, following the lead of
other religious organizations globally including Anglican dioceses
in New Zealand and the Quakers in the UK.
However, some in the church argue that shareholders should engage
with companies to make them reorder their priorities and cut
emissions. Others recommend quitting high-emission practices like
coal and tar-sands with a proposed time-frame to move to a
low-carbon portfolio.
Richard Burridge, deputy chairman of the EIAG that advises the
church's three National Investing Bodies (NIBs) and a Church of
England clergyman, said there was a real financial risk in excluding
sectors of the market from investment for ethical reasons as it
reduced opportunities.
He said 12.5 percent of the UK's FTSE350 stock market index was
already excluded from investment as a result of ethical investment
policies which had meant a loss of about 0.7 percent a year between
2001 and 2012.
A further 14.25 percent of the FTSE350 would be excluded if the
church quit the "integrated oil and gas" and "oil and gas
exploration and production" sectors, he said.
"This would leave 26.5 percent of the index excluded from
investment, and a higher risk of financial detriment," Burridge said
in a paper to be presented at the next meeting of the church's
governing body, the General Synod, in February.
"From discussions to date, a recommendation that the NIBs should
disinvest from all fossil fuel companies seems unlikely."
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WORKING GROUP
The push for disinvestment follows the release of several reports by
the church and other religious groups raising concerns about climate
change. The Southwark resolution stemmed from a motion by a
parishioner challenging the church's investment in Shell and the
fossil fuel industry.
Burridge said the EIAG would consider the merits of blocking
investment in some companies involved in fossil fuels.
"For example, the EIAG will consider whether to recommend that the
NIBs should implement, at this stage of the transition to a
low-carbon economy, ethical restrictions on investment in companies
whose main business is coal mining," he said.
Jacqui Philips, clerk to the synod, said the review into the
church's investment position was ongoing and the synod would be
asked to set up a working group on the environment to look at
initiatives to reduce the threat and impact of climate change.
"No decision has yet been made and this is something that is under
review," Philips told Reuters.
(Editing by Susan Fenton)
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