Two Church of England investment bodies announce they will divest from fossil fuels

By ENS Staff
Posted Jun 22, 2023

[Episcopal News Service] On June 22 the Church of England’s Church Commissioners for England and the church’s Pensions Board each announced they will independently disinvest from fossil fuels this year.

The Church Commissioners for England, which manages the Church of England’s £10.3 billion endowment fund – more than $13.1 billion in U.S. dollars – said it has decided to exclude all remaining oil and gas majors from its portfolio and will exclude all other companies primarily engaged in the exploration, production and refining of oil or gas, unless they are in genuine alignment with a 1.5 degree Celsius pathway formalized in the 2015 Paris Agreement, by the end of 2023. The General Synod will meet July 7-11 in York.

The announcement comes as the Church of England’s National Investing Bodies (NIBs) report to the General Synod on progress toward a 2018 synod motion, which set out a five-year strategy to invest in climate solutions, engage with high carbon-emitting companies and disinvest from fossil fuel companies not aligned with 1.5 degrees Celsius goal.

“We have engaged with these companies for many years now starting long before 2018 and we’ve been clear on our asks, on the decisions we must make, if they are not met,” Alan Smith, first church estates commissioner of the Church of England, said in a June 22 press conference. “We’ve asked the oil and gas majors to acknowledge the climate emergency as we have, to set targets and to act on them in line with the Paris Agreement.”

“For our part, we have set them clear, measurable hurdles over the past five years and have carefully tracked their progress using assessments from the Transition Pathway Initiative, which itself was co-founded by the NIBs, and it’s now used by investors with over $50 trillion of assets under management,” he said. “The hard truth is this: Not enough progress has been made. None of them have passed the 2023 rules. That is why the church commissioners and the church of England’s Pension Board have indeed independently decided to exclude the remaining oil and gas companies from their portfolios.”

NIBs’ “Approach to Climate Change” report presents the progress that has been made in response to the 2018 synod motion but notes that while some companies have made significant progress, no fossil fuel company has passed the 2023 hurdles set by the NIBs. The June 22 announcement marks the two groups’ intentions to disinvest accordingly.

The climate crisis threatens the planet we live on and people around the world who Jesus Christ calls us to love as our neighbors. It is our duty to protect God’s creation, and energy companies have a special responsibility to help us achieve the just transition to the low-carbon economy we need,” Archbishop of Canterbury Justin Welby said in a press release.

“We have long urged companies to take climate change seriously and specifically to align with the goals of the Paris Climate Agreement and pursue efforts to limit the rise in temperature to 1.5 degrees Celsius above pre-industrial levels. In practical terms that means phasing out fossil fuels, investing in renewables and plotting a credible path to a net-zero world. Some progress has been made, but not nearly enough. The Church will follow not just the science, but our faith – both of which call us to work for climate justice.”

The Pensions Board said its investment restriction will cover all oil and gas companies that do not have short-, medium- and long-term emissions reduction targets aligned with limiting global warming to 1.5 degrees Celsius, as assessed by the independent Transition Pathway Initiative. It said this also will apply to equity and debt investments.

In 2021, the Church Commissioners excluded 20 oil and gas majors from its investment portfolio. It is now also excluding BP, Ecopetrol, Eni, Equinor, ExxonMobil, Occidental Petroleum, Pemex, Repsol, Sasol, Shell and Total, after concluding that none are aligned with the goals of the Paris Climate Agreement, as assessed by the Transition Pathway Initiative.

“This is also about fundamentally about the hard-headed financial decision, a decision that protects our assets. If fossil fuel companies don’t embrace the zero-carbon world and start investing in allocating their capital accordingly, there’s a real risk of catastrophic failure for humanity, yes, and actually for those companies themselves,” Smith said during the press conference.

“Those companies frantically clinging to the last drops of oil, refusing to change course, incapable of seeing a different future, hemmed by eve-tightened regulation, the rise of alternative technologies and a public that is turning away and wants different [alternative to fossil fuels], those companies will not be long-term, sound investments. There will be left behind as the world transitions to a low-carbon future.”

Should companies change course and align themselves with the goals of the Paris Agreement, the commissioner said, the church might consider reinvesting.