The Church of England has agreed to reduce holdings in coal and tar sand across its £9bn (€12.4bn) in pension and charitable funds, but divestment fell short of the full sale of fossil fuels.
Critics accused the Church of lacking urgency.
Revising its climate change policy, both the £6.1bn Church Commissioners and the £1.7bn Church of England Pensions Board agreed not to invest directly in companies that draw more than 10% of revenue from the production of oil from tar sands or the extraction of coal used for electricity generation – a change that has resulted in a divestment worth £12m.
The Rev. Canon Professor Richard Burridge, deputy chair of the Church’s Ethical Investment Advisory Group (EIAG), accepted that climate change was a reality and that investments should be used to assist in the transition to a low-carbon economy.
“The Church has a moral responsibility to speak and act on both environmental stewardship and justice for the world’s poor who are most vulnerable to climate change,” he said.
Bishop Nick Holtam, in charge of environmental matters at the Church of England, added that the new policy marked “the start of a process of divestment as well as engagement with fossil fuel companies”.
Anthony Hobley, chief executive at the Carbon Tracker Initiative, threw his weight behind the divestment move, and noted the tar sand divestment made financial and environmental sense.
“These are incredibly expensive projects that consume a huge amount of finance, and many of the tar sands projects need an oil price somewhere between $80 and $200 a barrel to make a profit,” he noted, well below the current price for oil.
The new policy will also allow for divestment from companies with “significant” carbon footprints if they do not consider their responsibilities in shifting to a low-carbon economy.
The wording is likely to allow the Church to maintain its stakes in some of the largest listed companies in the UK, including BP, which recently backed a shareholder resolution calling for it to detail how it would transition to a low-carbon economy.
Similar resolutions have been tabled for Shell and Statoil’s AGMs, with both companies throwing their weight behind them.
The Rev. Dr Darrell Hannah, whose diocese of Oxford last year divested its £65m in glebe funds from fossil fuel, welcomed the new policy but said the Church should “move away from all forms of carbon as soon as possible, and that includes fracking”.
He also criticised that the policy did not disclose what the Church would regard as a success in its engagement efforts with companies with a significant footprint.
“That kind of criteria is very important,” Hannah said. “Although it uses the words ‘urgent action’, I miss in it the sense of urgency we have to have.”
With an eye on alleviating poverty, the policy allows for the Church to invest in fracking, saying it should evaluate the opportunities stemming from growth in the market, “including those for employment in areas of social deprivation”.
The Commission in 2013 began asserting ownership over the mineral rights associated with its land holdings, a step that could see it take advantage of fracking should the industry grow in the UK.
The UK government earlier this year won a vote that will allow companies to frack on land without permission of the owner, as long as the exploration is more than 300m below the surface.
But the policy stressed that any fracking company in which the Church holds a stake would need to ensure that “the range of stakeholder views” was heard prior to exploration.