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Church of England divests from Fossil Fuels

On 22 June 2023, the Church Commissioners and Church of England Pensions Board each announced they will independently disinvest from fossil fuels this year.

This decision was made following a report from the Church of England’s National Investing Bodies (NIBs) 'Approach to Climate Change' to the General Synod in June 2023. In 2018, the Synod had set out a five-year strategy to invest in climate solutions, engage with high carbon emitting companies, and disinvest from fossil fuel companies not aligned with the Paris Agreement.


Church Commissioners divest £10.3bn endowment fund


The Church Commissioners for England, which manages the Church of England’s £10.3bn endowment fund, therefore decided in June 2023 to exclude all remaining oil and gas majors from its portfolio, and will exclude all other companies primarily engaged in the exploration, production and refining of oil or gas, unless they are in genuine alignment with a 1.5°C pathway, by the end of 2023.

'It is our duty to protect God’s creation, and energy companies have a special responsibility to help us achieve the just transition to the low carbon economy we need' ~ Most Revd Justin Welby, Archbishop of Canterbury

Previously, in 2021, the Church Commissioners had excluded 20 oil and gas majors from its investment portfolio. It will now also exclude BP, Ecopetrol, Eni, Equinor, ExxonMobil, Occidental Petroleum, Pemex, Repsol, Sasol, Shell, and Total, after concluding that none of them are aligned with the goals of the Paris Climate Agreement, as assessed by the Transition Pathway Initiative (TPI).


“The climate crisis threatens the planet we live on, and people around the world who Jesus Christ calls us to love as our neighbours. It is our duty to protect God’s creation, and energy companies have a special responsibility to help us achieve the just transition to the low carbon economy we need,” said the Most Revd Justin Welby, Archbishop of Canterbury, and Chair of the Church Commissioners for England.

'Soberingly, the energy majors have not listened to significant voices in the societies and markets they serve and are not moving quickly enough on the transition' ~ Alan Smith, First Church Estates Commissioner

“We have long urged companies to take climate change seriously, and specifically to align with the goals of the Paris Climate Agreement and pursue efforts to limit the rise in temperature to 1.5°C above pre-industrial levels. In practical terms that means phasing out fossil fuels, investing in renewables, and plotting a credible path to a net zero world. Some progress has been made, but not nearly enough. The Church will follow not just the science, but our faith – both of which call us to work for climate justice.”


“The decision to disinvest was not taken lightly,” said Alan Smith, First Church Estates Commissioner. “Soberingly, the energy majors have not listened to significant voices in the societies and markets they serve and are not moving quickly enough on the transition. If any of these energy companies come into alignment with our criteria in the future, we would reconsider our position. Indeed, that is something we would hope for.”


This means that by the end of 2023, all oil and gas exploration, production and refining companies will be excluded.


Church of England Pensions Board divests


The Church of England Pensions Board also announced its intention to disinvest from oil and gas companies on the same day, after a decade of endeavouring to engage them on climate change issues.

'Today we announce our intention to disinvest from all remaining oil and gas holdings across our equity and debt portfolio' ~ John Ball, Chief Executive Officer, Church of England Pensions Board

This new investment restriction will apply to all oil and gas companies that do not have short, medium and long term emissions reduction targets aligned with limiting global warming to 1.5°C, as assessed by the independent Transition Pathway Initiative. The exclusion will also apply to equity and debt investments.


“Today we announce our intention to disinvest from all remaining oil and gas holdings across our equity and debt portfolio,” said John Ball, Chief Executive Officer of the Church of England Pensions Board. “There is a significant misalignment between the long term interests of our pension fund and continued investment in companies seeking short term profit maximisation at the expense of the ambition needed to achieve the goals of the Paris Agreement. Recent reversals of previous commitments, most notably by BP and Shell, has undermined confidence in the sector’s ability to transition”.


The Pensions Board will continue to engage policy makers on the need for greater ambition in public policy – including a phase-down of oil and gas which take account of the different needs of emerging and developing countries.


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How the Faith Plans framework can help you


The Faith Plans Seven Key Areas framework begins with Key Area One: Assets. This includes information and guidelines to help faith organisations to align their investments in line with their values. To read more about how you can begin to process to align your faith investments, visit https://www.faithplans.org/1a-assets-finance-investments or contact us for more information.

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Cover of report called Approach to Climate Change featuring a church in the country





Read the full report 'Approach to Climate Change' from The National Investing Bodies (NIB) which was presented to the National Synod, June 2023, here.

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