Will end of CoE fossil fuel investment benefit green energy?
In accordance with a new environmental policy, the Church of England (CoE) will divest £12 million from companies in fossil fuel and whose revenues are more than 10 per cent dependent on thermal coal extraction or oil production from tar sands.
The move is indicative of the CoE’s renewed attitude towards climate change, and reflects the belief that ignoring environmental problems ultimately harms the poorest and most vulnerable in the society.
In April this year, a proposed shareholder’s resolution, designed to encourage more eco-friendly production methods, and conceived of by the CoE-led investor coalition, “Aiming for A”, won approval from British Petroleum (BP) shareholders, having been recommended by BP’s board.
Furthermore, the CoE has reported that, since the resolution’s success, “The Shell board has also recommended that investors back the “Aiming for A” resolution at the company’s annual general meeting on 19th May.”
According to the BBC, the CoE has an investment portfolio worth around £8 billion, and while this announcement marks a positive step, it still invests heavily in energy firms. The figures from the Guardian show, the body retains investments worth £101m in Shell and £91.9m in BP.
Contrary to campaigner calls for full divestment, the CoE has stated it will first try to negotiate with energy firms over more responsible and environment friendly practices. Divestment, they say, is a last resort. Richard Burridge, deputy chair of the Church’s Ethical Investment Advisory Group (EIAG), commented: “Alongside issues about disinvestment, even more important in many ways is our work in engaging with companies. Engagement is crucial, and the last resort is well if you won’t engage and if you won’t change, then we’ll disinvest.”
Edward Mason reiterated and stated: “Companies like the oil and gas majors are significant players in the business world and political world, and we’d like them to be part of a constructive call for the transition to the low-carbon economy.”
Although this fractional divestment commitment by the CoE, relative to its overall investments in fossil fuels, has disappointed some, the argument still exists that these actions of the church have a far-reaching effect. An amended church environmental policy could potentially spark changes in global attitudes towards such investment, and ultimately in company policy.
Speaking to the Guardian, Ben Caldecott, director of Oxford University’s Stranded Assets programme, said: “Faith groups remain influential in shaping societal norms and views of particular industries. But even if this impact is limited in increasingly secular societies, it still provides succour to those within non-faith groups pushing for divestment. Either way, I think it increases the reputational risk for fossil fuel companies.”
Christine Allen, director of policy and public affairs for the charity Christian Aid, welcomed the commitment of the CoE’s investment funds, and noted the past involvement of the Church in the “great social movements in history”, such as the end of apartheid in South Africa and the Civil Rights movement in the US.
She did, however, appear to support a stronger and more comprehensive divestment and said; “The Church of England has effectively read the last rites to the coal and tar sands industry. The message must be heard loud and clear: they have no place in a sustainable future, and ultimately other fossil fuels don’t either.”
Those campaigners who believe the CoE has only made a moderate and inconsequential divestment may well look to the Church of Sweden (CoS), who last September severed all ties with fossil fuel companies and although the investment portfolio of the CoS – around £450 million – is considerably smaller than that of the CoE, it allows for no doubts about the CoS’ commitment to matters of climate change.
While the removal of £12 million from the fossil fuel industry is a laudable effort, and should be repeated by wealthy institutions, religious or otherwise, the world over, the CoE might yet be on the receiving end of loud calls for further disinvestment.