9 July 2018

Church of England wields the divestment axe over climate change

The Church of England has made the historic decision to divest from all fossil fuel companies which are not taking steps to combat climate change.

An amendment was passed during a meeting of the church’s General Synod, its highest legislative body, with 347 to 4 voting in favour of the motion.

It means that by 2023 the church will divest from any company which has not aligned itself with the Paris climate agreement and has not taken seriously the transition to a low-carbon economy.

The Church of England is a major asset owner with a £12 billion endowment and investment fund. Up to now it has sought to engage with carbon intensive companies to bring about changes to their businesses.

While the motion still advocates engagement with fossil fuel companies, using the Transition Pathway Initiative, it sends a clear warning that the Church is serious about removing its assets if action isn’t taken.

The 2023 deadline is later than a previous suggestion to divest from poorly performing companies by 2020. The later cut-off allows the Church to spend more time to wield its powers as a significant shareholder and to advocate reform.

The Bishop of Manchester, David Walker, said the Synod had given the go-ahead for the Church Commissioners, which oversees its investments, to “turn up the heat on businesses”.

“We continue to lead with partners, engaging for real transition towards a carbon neutral future. Divestment remains the instrument of final resource, for when we judge engagement with a company has failed,” he added on Twitter.

Christian Aid’s Head of UK Advocacy, Tom Viita, said the agreement “shows the bell is tolling for the fossil fuel era.”

"This vote puts the oil majors on notice, and strengthens the arm of those pushing the companies to move more quickly to a low carbon future. If oil companies continue to drag their heels, there is nothing to stop the church divesting earlier if they, or Synod, are not satisfied with the speed of change."

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