The Church of England is to divest from fossil fuel companies that have not complied with its requirements to report on their climate change strategy by 2023.
The church’s General Synod – its governing body – voted earlier this month on the policy, which will now be adopted by its three investing bodies, The Church Commissioners, Church of England Pensions Board, and CBF Church of England Funds, with aggregate endowments worth around £13bn (€14.7bn).
The Synod overwhelmingly affirmed its support for the three bodies’ approach to tackling climate change, including its ongoing strategy of engaging with companies rather than divesting from them.
The investors had previously announced that, beginning in 2020, they would use Transition Pathway Initiative (TPI) assessments to start to reduce holdings in companies that were not taking seriously their responsibilities to assist with the transition to a low-carbon economy.
TPI is a £7trn asset owner-led initiative developed by the Church of England and pension fund partners.
However, an amendment submitted by Oxford Diocese in advance of the Synod urged the investors to require fossil fuel companies to align their business plans with the Paris Agreement by 2020 or – automatically – face immediate divestment.
After discussion, that amendment was dropped, with the Synod approving an alternative amendment asking the investors to assess companies’ progress by 2023, and divest from any companies not on track to meet the aims of the Paris Agreement.
During the debate, David Walker, bishop of Manchester and deputy chair of the Church Commissioners, said: “Unilateral, wholesale [divestment] from fossil fuel producers in 2020, or beginning in 2020 based on assessments in 2020, would leave our strategy, and influence, in tatters.”
He argued: “It would not spur companies on to change further and faster – it would take the pressure off them. Now is not the moment to do that.”
A Church of England spokesman said: “This new date is provided as a cut-off date when engagement has failed and the company is clearly not on the path towards the Paris Agreement targets.”
New research from the TPI has shown that, within the electricity, coal, and oil and gas sectors, most companies are yet to adopt business strategies aligned with the goals of the Paris Agreement.