Church of England threatens to cease BP and Shell investments over climate concerns

 

Tom Bawden
Wednesday 10 December 2014 18:30 GMT
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The Church wants BP and Shell to take greater action to tackle the threat of global warming
The Church wants BP and Shell to take greater action to tackle the threat of global warming

The Church of England has warned it could withdraw its investments from BP and Shell unless the oil giants take greater action to tackle climate change.

In a significant boost to the growing “divestment” campaign that has spread from the US. the Church has become the first mainstream religious organisation in the UK to raise the prospect of severing ties with fossil fuel companies because of global warming.

The Church, which has tens of millions of pounds invested in both BP and Shell, says it’s targeting the two companies because they have the biggest carbon footprints in the UK.

It plans to put pressure on them to become greener through a “shareholder resolution” – a formal call by investors to take action.

“The shareholder resolutions are intended to challenge the companies to run their businesses so that they participate constructively in the transition to a low carbon economy,” said Edward Mason, head of responsible investment at the Church Commissioners, responsible for the COE fund.

He wants BP and Shell to take greater action to tackle the threat of global warming and link executive pay more closely to “environmental and social metrics”, arguing that big oil companies like them are not operating in a way that is viable in the long term if we are to avoid catastrophic climate change.

The Church of England stresses that it is keen to work with the companies to become more environmentally-friendly rather than simply sell out of them, because, it says, this is the best way to effect change. The Church has a total investment portfolio or around £9 billion.

However, a spokesman for the Church told The Independent that divestment is “always an option” and would be “considered as a final resort if companies our unresponsive to our concerns”.

In 2010, the Church pulled its investments from mining group Vedanta over an alumina refinery in the Indian state of Orissa and a planned bauxite mine nearby.

In 2012, it sold its stake in News International after a year of discussions in the wake of the phone hacking allegations failed to convince it that the publishing group now known as News UK was committed to implementing “necessary corporate governance reform”.

The movement for organisations -particularly pension funds - to divest from fossil fuels has grown rapidly since it was set up three years ago. More than 700 institutions around the world controlling about £30bn of assets have now pledged not to invest in companies seen to fuel global warming. British organisations who have divested include the British Medical Association, the Joseph Rowntree Charitable Trust, Glasgow University and the Quakers.

BP said of the Church of England’s action: “We will carefully consider it and respond appropriately before the AGM in April.”

A Shell spokesman declined to comment. However, in September, the company’s chief executive Ben van Beurden said: “We are preparing for increasingly robust legislation on emissions. And we understand that renewable [energy] has a huge role to play in the energy system of the future.”

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