Ever since the Deepwater Horizon disaster public opinion of fossil fuel companies has cooled dramatically. Many investors have chosen to divest from traditional fuel companies and direct their money towards more ethical organisations. In recent months a policy change in the UK allowed pension fund trustees to divest from fossil fuels and invest their money elsewhere. Previously this was disallowed if it meant jeopardising the chance of getting the best returns for the beneficiaries of the fund. This reflects a growing sentiment of disdain towards fossil fuel companies.
Now, firms responsible for polluting the earth could be struck from the Church of England’s investment portfolio in the next five years. This will hopefully act as an incentive for these companies to pull their weight in the battle against climate change. The Church of England currently has an investment pot of £12 billion.
A meeting that took place last weekend saw senior officials discuss a plan to sell stakes in fossil fuel companies unless they can show tangible evidence that they are taking the fight against climate change seriously.
The biggest church organisation in the UK voted almost unanimously to carry out the action. This called for firms to ensure their strategies match up with the Paris Agreement, designed to cap global temperature rises to below 2 degrees Celsius.
On the Church of England’s website, the institution stated that doing their bit to stop climate change is part of a greater plan and is an essential part of its commitment to protect God’s wonderful creation: planet Earth. In 2015 tar sands oil and coal were blacklisted from the church’s potential investments.
In an annual investment report, the Church Commissioners claimed that by the end of 2017 its portfolio was notably lacking oil and gas stocks and that this type of investment comprised less than 4.5% of the entire portfolio.
Altogether, the vote to move forward with this action is going to affect a huge amount of money. The Financial Times said that the Church of England is sitting on an £8.3 billion investment pot, £2.3 billion retirement fund and £2 billion worth of separate invested funds.
Justin Welby, the Archbishop of Canterbury and principal leader of the Church of England spoke last week at the London Stock Exchange. As he addressed the public at large he explained that the threat of climate change is not something to ignore. He stated firmly that this is a problem for the entire global community in a way that nothing has even been before. Welby speaks wise words – if the world does not act now, there will be precious little left for the next generations to enjoy.
Welby went on to say that businesses should be motivated to do their bit in the anti-climate change revolution. He said that the risk to businesses was “incalculable” and that there is no way at all to tell how changes in temperature might affect global markets.