One of the Church of England’s three investing bodies has quietly sold its last remaining shares in fossil fuels, worth an estimated £8.4 million, DeSmog UK has learned.
CCLA, a leading fund manager which invests on behalf of charities including Anglican dioceses, said it had dropped its investments in oil giants Shell and Total earlier in the year for financial reasons.
The move puts dioceses at odds with the national church, which still remains invested in oil and gas companies through its two other National Investing Bodies, the Church Commissioners and the Church of England Pensions Board.
An estimated 39 out of 42 dioceses invest in one or more of CCLA’s six Church of England funds, with the recent divestment leaving up to 20 dioceses without any fossil fuel investments.
A spokesperson for the Diocese of Coventry explained the funds no longer invested in fossil fuel companies “on the basis of the financial risks posed by the short to medium term outlook for the oil and gas markets.” CCLA confirmed that they shared this view, telling DeSmog the decision was made for investment, rather than ethical, reasons.
CCLA said it was unlikely to re-invest in Shell and Total through its CBF Church of England funds, but that the companies were still eligible under the Church of England’s ethical investment guidelines.
The Church’s guidelines currently rule out investments in thermal coal and tar sands companies, but not oil and gas. In 2018 its governing body, the General Synod, voted to divest by 2023 from all oil and gas companies not on track to meet the Paris Agreement targets of keeping average global temperature increases to “well below” 2°C, beginning the divestment process this year.
CCLA said it defined fossil fuel companies as those which derive more than 10 percent of their revenue from the extraction, production and/or refining of oil and gas.
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Shares in Shell and Total were held through the £1.5 billion CBF Church of England Investment Fund, the largest of the six funds, and a smaller UK Equity Fund. The other four funds were already “fossil free”.
CCLA’s Church of England funds also previously invested in Chevron, but a spokesperson for the asset manager told DeSmog it had sold these holdings over concerns about the company’s approach to climate change, as well as a proposed acquisition of US oil company Anadarko, which was involved in the Deepwater Horizon disaster and is now owned by Occidental Petroleum.
CCLA’s Church of England funds are the investment fund of choice for most of the 42 Church of England dioceses and have a combined value of £2.6 billion. The dioceses had an estimated £1.8 million invested in Shell and Total through these funds by the time the shares were sold.
James Buchanan, Bright Now Campaign Manager for Christian climate change charity Operation Noah welcomed the move, telling DeSmog: “Fossil fuel investments are not only unethical, they are also a growing financial risk that investors are increasingly unwilling to accept.”
“We urge CCLA to make this decision permanent by ruling out future investments in fossil fuel companies. Now is the time for Churches to support the green recovery by divesting from fossil fuels and investing in the clean technologies of the future,” he said.
A Church of England spokesperson reiterated that it would begin to divest from fossil fuel companies that are “not taking seriously their responsibilities to assist with the transition to a low carbon economy” this year.
“We will divest by 2023 from fossil fuel companies that under the Transition Pathway Initiative assessments suggest the company is not prepared to align with the goals of the Paris Agreement,” they added.
CCLA did not respond to a request for further details about its decision.
Update 09/07/2020: this article originally stated that dioceses’ investments in Shell and Total had an estimated value of £1.9 million when these shares were sold and up to 23 dioceses estimated to be without fossil fuel investments. This has been corrected to £1.8million and 20.
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