Church of England Urged to Divest from Oil and Gas Companies at Synod

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Campaigners demand Church of England divest from fossil fuels

The Church of England’s approach to climate action has come under the spotlight ahead of its general meeting as pressure mounts for it to divest from all fossil fuel companies.

The general Synod will vote on a motion to reaffirm the Church’s existing strategy to engage with oil and gas companies and urge them to take more ambitious climate action when it meets in York later this week.

But campaigners said the motion was not going far enough and tabled an amendment calling on the Church to threaten to divest from fossil fuel companies if they are not on “an unequivocal path” to align their business models to the Paris Agreement goals by 2020.

The call for the Church to strengthen its stance on fossil fuel investments comes after Pope Francis urged big oil including Exxonmobil, Eni, Shell and BP to make a faster transition to clean energy.

Pope Francis told big polluters the rising of greenhouse gas levels in the atmosphere was “a real cause for concern” and that the continued search for new fossil fuel reserves was “even more worrying” — urging big oil to keep most of fossil fuels in the ground in line with the Paris Agreement.

The debate taking place within the Church opposes two different approaches to tackle climate change. On the one hand, Church authorities say it needs to remain a shareholder in oil and gas companies so that it can engage with fossil fuel companies and put pressure on them to take more ambitious climate action.

On the other hand, activists within the Church argue that engagement with fossil fuel companies has failed to compel oil and gas companies into taking meaningful climate action and that the Church should divest.

Adam Matthews, director of ethics and engagement at the church of England pensions board told DeSmog UK there was “no disagreement in terms of urgency of the issue and commitment to tackling climate change” but different opinions within the Church on the tactics to achieve a transition to a low carbon economy.  

But the Bishop of Oxford, Dr Steven Croft, who backs the amendment, said the Church’s climate change policy was “not sufficiently challenging”  and called for “an urgent policy of divestment”.

According to the Church of England 2017 annual report, 4.48 percent of its portfolio included oil and gas companies and the carbon footprint of its investment increased from the previous year to 313 tonnes of carbon dioxide per million pounds of corporate revenue.

In 2017, the Church’s pensions board said it expected to invest at least 20 percent — or £66 million — from a £330 million investment pot dedicated to infrastructure projects in renewable and clean energy projects.   

In 2015, the Church of England had £101 million invested in Shell and £91.9 million in BP. The same year, the Church voted to divest from tar sands oil and thermal coal — two of the most polluting fossil fuels.

Engage to change

The Church of England’s climate change investment policy was adopted in 2015 and pledged to engage with policy makers and fossil fuel companies but divest from the most polluting companies including tar sands and coal.

The Church also committed to start divesting from companies “that make a significant contribution to emissions of greenhouse gases but do not take seriously their responsibilities to assist with the transition to a low carbon economy” from 2020.

Matthews defended the Church’s engagement approach arguing that it is at the forefront of the debate on a range of issues including climate change and the energy sector.

He added that the engagement of the Church and other major investment funds with oil and gas companies through companies annual general meetings (AGMs) had led to “ground breaking shifts” over the past years.

We are engaging because we want to see change happen but we will be using divestment if we consider progress to be insufficient. But we will only divest where it feel appropriate. We are not going to exit from the [oil and gas] sector but from those companies that we think are not going to manage that transition to a low carbon economy,” he said.

With the Church of England’s pension funds still holding significant investment in oil giant BP and Shell, Matthews attended both AGMs earlier this year and backed calls for the companies to set tougher emission targets.

While BP has not set any emission reduction targets, Shell has set out “ambitions” to halve carbon emissions by 2050 leading shareholders to prompt the company to turn promises into action.

But a resolution for tougher emission targets was defeated by Shell investors with just 5.5 percent of votes in support during this year’s AGM.

Matthews yet argued that shareholder pressure had seen the company break ranks with other oil majors and set “ambitions” for emission reductions.

He said: “Although the vote for the resolution was low, its principle had huge support. Shell is doing the kind of thing that we would like them to do.”

Engagement failure’: The moral case for divestment

For activists, the Church’s strategy of engagement has failed to develop the urgent and ambitious climate action necessary to limit global temperature rise “well below” two degrees and in line with the Paris Agreement goals.

James Buchanan, campaign manager for Operation Noah, a Christian charity which works to create leadership and respond to the threat of climate change, told DeSmog UK: “The Church has already pursued engagement a few years and if in the next couple of years these [oil and gas] companies are not committed to take stronger action then they should be divesting.

It is time we hold these companies to account.”

Buchanan argued that with only 5.5 percent of shareholders backing the tougher climate targets resolution at Shell’s last AGM, the prospect of a majority of investors backing the resolution was “still a long way away”.

Are we really going to see majority support for these resolutions any time soon? Will it ever have the desired impact that is urgently needed?,” he asked.

Buchanan added that momentum was building up behind the divestment movement with the Church of Ireland joining the Quakers in announcing full divestment from fossil fuels.

For him, the amendment to the Church’s motion presented by the Oxford diocese would be “a step in the right direction towards the full divestment from fossil fuels”.

It would send a message that the Church is intensifying its engagement while providing a clear timescale for divestment if oil and gas companies don’t change their business models very quickly,” he added.

In a report published last month, Operation Noah spelt out the moral case for divestment, citing a 2017 poll by ComRes commissioned by Christian Aid which found that 78 percent of adult respondents agreed that investing in companies that cause dangerous climate change is morally wrong, no matter how profitable it is.

DeSmog UK has previously reported on how faith communities including Christians, Muslims and Jews have lent a moral voice in the global divestment movement, building powerful grassroots campaigns and heightening the case to keep fossil fuels in the ground.

Transition Pathway Initiative

To assess which companies are making progress in transitioning to a low-carbon economy and inform investment and divestment decision, the Church is England is using the Transition Pathway Initiative (TPI).

The TPI is a public tool developed by the Grantham Research Institute and the London School of Economics which assesses and ranks companies’ awareness and strategies to manage their carbon performance on a scale from zero to four.

The TPI is supported by asset owners with more than $7 trillion (£5 trillion) of assets under management, including the Church of England and the Central Finance Board of the Methodist Church.

Matthews, who also serves as co-chair of the TPI, said the tool was used to make “informed decision using the best academic advice that we can get” and that the Church of England had “confidence” in the tool.

But in its report, Operation Noah criticised the methods used by the TPI, saying the targets and timescales used as benchmarks were not ambitious enough to ensure the urgent transition to a low-carbon economy.

The TPI was launched in January 2017. From 2020, the Church of England’s investment bodies are expected to take divestment decisions on the basis of which companies score the lowest on taking seriously their responsibilities to assist with the transition to a low carbon economy.

Photo: Campaigners call on the Church of England to fully divest from fossil fuels, pictured 2015. Operation Noah 

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