CLIMATE CHANGE POLICY OF THE

NATIONAL INVESTING BODIES

PRESENTATION

Policy Development and Context

Mr James Featherby

Chair of the Ethical Investment Advisory Group

Biblical and Theological Reflections

The Revd Canon Professor Richard Burridge FKC

Deputy Chair of the Ethical Investment Advisory Group

Policy Implementation by the National Investing

Bodies (NIBs)

Dr Jonathan Spencer

Chairman of the Church of England Pensions Board

POLICY DEVELOPMENT

Biblical: Reflected in depth on biblical and theological position

Evidential: What does the science say

Pragmatic: In an imperfect world, what’s the best ethical response for the NIBs with

their ability to act and speak both as part of the witness and mission of the Church, and as significant institutional investors

UNDERPINNING RATIONALE

Transition: Urgent but orderly transition to a low carbon economy. Fossil fuels are not tobacco. We don’t need tobacco. We do need energy

Influence: Right to disinvest from most polluting fuels, but most significant additional ethical contribution is to engage both companies and policy makers

Flexibility: Clear direction of travel but responsive to changing facts on ground. Mistake to be overly prescriptive

KEY RECOMMENDATIONS

• Disinvestment from thermal coal and tar sands

• Intensive engagement with major fossil fuel producers and users

• Threat of divestment from those unresponsive to need for transition

• Increased public policy engagement

• Greater investor collaboration

• Increased investment in sustainable strategies that meet risk/return criteria

• Support development of international performance metrics

• Integrate in stock selection and asset manager appointments

• Monitor and report annually

REACTION

‘I very much welcome the policy of the national investing bodies and

the Ethical Investment Advisory Group…It is thoughtful and has been

carefully considered, producing a range of ways to engage with issues

of the Church’s finance in relation to Climate Change. It marks the

start of a process of divestment as well as engagement with fossil fuel

companies and better aligns the Church’s investment practice with its

belief, theology and practice.’

Bishop Nick Holtam

THE BISHOP OF SALISBURY AND LEAD BISHOP ON THE ENVIRONMENT AT

THE CHURCH OF ENGLAND

‘The Church of England’s investment policy, supporting the transition

to a low carbon economy, is remarkably thoughtful and expressive of

investor integrity. It is also very encouraging to see that the climate

negotiations are being discussed by the upcoming General Synod.’

Ms Christiana Figueres

EXECUTIVE SECRETARY, UNITED NATIONS FRAMEWORK

CONVENTION ON CLIMATE CHANGE (UNFCC)

‘Fine and wise leadership.’

Professor Lord Nick Stern

CHAIR OF THE LONDON SCHOOL OF ECONOMICS GRANTHAM RESEARCH

INSTITUTE ON CLIMATE CHANGE

BIBLICAL AND THEOLOGICAL REFLECTIONS:

THE REVD CANON PROFESSOR RICHARD BURRIDGE FKC

DEPUTY CHAIR

ETHICAL INVESTMENT ADVISORY GROUP

BIBLICAL AND THEOLOGICAL REFLECTIONS

“Humankind has a divinely mandated responsibility for

the physical world, for its creatures and for one

another, especially the weakest and least”

(Policy Exec Summary (i), p. 5)

We undertook an extensive period of reflection upon the biblical

material, theological considerations, the history of the church and

the current policies and attitudes from other churches.

See the Climate Change Policy and Advisory Paper from EIAG,

GS Misc 1110, Sections 2 and 3, pages 10-15.

1 THE DOCTRINE OF CREATION

Gen. 1.31 “God saw all he had made and it was very good.”

Gen. 2.15, 20 Human beings to ‘till it and keep it’, naming the animals.

Malawi: Looking across Chikwawa province towards Mozambique.

2 HUMAN SIN AND ABUSE OF CREATION

Gen 3: the story of the Fall; ‘dominion’ or domination? (P Gooder Bible Studies)

Industrial development and climate change have changed the rainfall pattern.

Government logging contracts; individual tree cutting for charcoal: drought & floods

3 ELECTION, INCARNATION, ATONEMENT

God does not give up on his world:

Saves people (Noah, Gen 8-9).

The call and election of Israel.

Enters into our world in the incarnation

of Jesus Christ (John. 1.1-14).

In Christ, God reconciled the world to

himself; new creation in Christ; passes

ministry onto us (2 Cor. 5.17-18).

Crucified Jesus and the Risen Lord,

Lilongwe Hospital Chapel, Malawi

4 LIVING ‘BETWEEN THE TIMES’

Ethics between the resurrection and

the final judgement of all – pot and

fire often symbols in the prophets.

Eager longing and groaning of

creation for consummation: Rom. 8

Time to wake from sleep Rom.13.11

Mitigate damage and enable poor

and vulnerable to develop.

Fuel efficient cooking stoves to save

wood and feed many people.

5 ROLE OF STEWARDSHIP, BUSINESS AND CREATIVITY

Report reflects on simpler lifestyles.

Call to be ‘co-creators’ with God.

Need for creativity in development

Shift to low carbon economy.

Renewable energy sources.

Solar panels being used in villages

to recharge mobile phones for text

warnings of high water & floods.

Challenge is to solve storage issue.

6 ALL HANDS TO THE PUMP!

7 THE CHRISTIAN HOPE

Christian ethics about

aspiring to high demands of

Jesus’ teaching while

following his open example.

Inevitable tension of the

‘now’ and the ‘not yet’.

Bible and theology drives our

mixture of divestment and

engagement – but

“GOD CAN DO ANYTHING!”

DR JONATHAN SPENCER

CHAIRMAN

CHURCH OF ENGLAND PENSIONS BOARD

NIBs AMBITION AND COMMITMENT

Ambition:

“To be at the forefront of institutional investors… addressing the challenge of

the transition to a low carbon economy”

Commitment:

Recognition of our responsibility to do what we can, as church investors

informed by the witness and mission of the church, to support the transition to a

low carbon two degree world. As custodians of the funds and stewards of

endowments we have a responsibility to take a long term view, in keeping with

our fiduciary responsibilities to our beneficiaries.

IMPLEMENTATION: FOUR LEVERS

• Disinvestment

• Investment

• Engagement with companies

• Engagement with policy makers

LEVER 1: DISINVESTMENT

Policy announced on 1st May

Commissioners and Pensions Board made an immediate

disinvestment of £12 million of holdings from companies

generating over 10% of income from thermal coal and oil

sands

Further disinvestments

Option to make further disinvestments from companies that do

not respond to engagement

LEVER 2: INVESTMENTPensions Board: 6% (or currently £90m) of its growth assets in core, socially

useful infrastructure projects. These may include renewable energy projects

and investments in networks to make them suitable for locally produced,

renewable energy.

Commissioners: £299 million of the Commissioners’ investment portfolio

(approximately 4.5%) qualifies for inclusion in the Low Carbon Investment

Registry, includes investments such as the £253 million sustainably certified

forestry portfolio.

£312.5m, with Generation Investment Management

CBF Church Funds: 2.5% of the capital value CBF Church of England

Investment Fund dedicated to investments in renewable energy infrastructure,

energy efficiency, and sustainable timber.

LEVER 3: ENGAGEMENT WITH COMPANIES

It is clear that we are uniquely placed as the Church of England National

Investing Bodies to seek to influence the way companies respond to

climate change. To achieve this we engage, using the moral power the

Church gives us, together with the entry ticket our shareholdings give us.

Engagement:

•Development of detailed Engagement Framework setting Aims and

Objectives to build on success of Aiming for A shareholder resolutions

•Review of engagement capabilities with view to increasing

•Partnerships such as the ecumenical Church Investors Group (CIG)

LEVER 4: ENGAGEMENT WITH POLICY MAKERS

The most effective and efficient way of mitigating climate change is

through internationally coordinated public policy.

Engagement:

•Engagement as an investor in the public policy debate

•Support increased publicly funded R and D into clean energy

•Financing of a new position at the Institutional Investors Group on

Climate Change (IIGCC)

•Working with other investors to support an agreement in Paris

“The Earth is the LORD’S and all that is in it

the world, and those who live in it;

for he had founded it on the seas,

and established it on the rivers.”

PSALM 24:1-2