Photo Credit: Stephen Codrington / Wikimedia
The national investing bodies (NIBs) of the Church of England have announced a new ethical investment policy for the extractive industries. The policy was adopted by three bodies – the Church Commissioners, the Church of England Pensions Board, and the CBF Church of England Funds – after two years of work. The policy follows advice from the C of E’s Ethical Investment Advisory Group (EIAG). The EIAG prepares ethical investment advice, but, under English trust law, it is for the trustees of the separate investing bodies to decide whether to adopt the policies pit.
In a report setting out the new policy, the NIBs said that it was adopted after considering the EIAG’s Extractive Industries Policy Paper as well as theological and biblical reflections.
“The key ethical concerns in extractive industries are not to be found in extraction as such, nor generally in the product of extraction, but in matters of business conduct including the management of risk, the side effects of operation and operating standards,” the report says.
“The key areas that this policy aims to address are responsibility, corporate governance, and five broad areas under which there are ‘ethical risks’: human rights; social concerns; health and safety; corruption and taxation; environment and ecology.
“While the NIBs believe that good practice is growing, the NIBs acknowledge that extractive sectors are particularly vulnerable to poor governance and ethical controversy, and that harmful impacts in this sector can be profound and long lasting on communities and the environment.”
The NIBs say that they will seek to improve company performance and contribute towards making the sector more sustainable and responsible, primarily through engagement. “As a last resort, and on a case by case basis, the NIBs may disinvest from companies where engagement is rebuffed or is clearly not leading to progress,” the policy says.
The Church of England described the new policy as “a distinctively Christian approach to investment in the extractives industries”. In preparing the new policy, officials took part in theological reflection, expert input, public consultation and site visits to mine sites and communities over a 24-month period. “The new policy acknowledges the positive contribution that mining can make to development and the material that it provides for many of the products in modern life,” the C of E said. “However, it also highlights that extractives companies are particularly vulnerable to poor governance and ethical controversy, and harmful, long-lasting impacts on communities and the environment.”
The Bishop of Manchester, David Walker, is the acting chair of the EIAG. He said: “strong returns to support our beneficiaries can go hand in hand with robust and transparent ethical investment policies. Our approach to policies like this is grounded in theology and is also practical and seeks to ensure we play our role as a faith investor in supporting those companies that seek to improve their practice and play their part in contributing to the good of society."
The chairman of the C of E Pensions Board investment committee, Alan Fletcher, commented: “We will engage with companies on the key ethical concerns highlighted in this policy. We believe that extractive companies have an important role to play in society, but that they have a clear ethical responsibility in the way they act on issues such as human rights. We engage robustly and where companies are unresponsive we will be willing to disinvest.”
The Church Commissioners are an independent body established by Parliament to manage historic investments on behalf of the C of E. They have investable assets of £7.9 billion and paid out £230.7 million to support the C of E and its dioceses in 2016.
The Church of England Pensions Board manages investments for clergy, missionaries and lay workers of the C of E. It has an investment fund of £2.3 billion.
The CBF Church of England Funds are a collection of pooled investment funds which are managed by specialist company CCLA Investment Management Ltd, which manages funds totalling £7.2 billion for churches, charities and local authorities.