It seems that the Church of England may be able to exert more influence these days on the major global corporations, through threatening to withdraw their expansive investments in such as large oil corporations like BP and Shell, than they may be able to do through purely religious methods and teachings alone in modern society.

The recent news that the Church has made it be known that they want to see the oil companies increase their efforts to tackle climate change, represents a thinly veiled accusation that they feel that they are dragging their heels at present. By warning them in advance they clearly hope to alter the stance being taken by the companies without having to actually withdraw what they clearly see as valuable elements in their substantial Investment portfolio. By maintaining an investment presence, they feel they can more ably influence and in effect ‘guide’ company behaviours than by merely selling their stakes. The fact that in total the Church has a portfolio somewhere in the region of £9 billion is clearly enough to have some business ‘clout’ would one think and be able to apply pressure to meet their own expectations around the business direction of the companies they invest in. Particularly so, if (when as shareholders) they act in a collaborative way with other investors and can call for resolutions to press for matters to be addressed at such as the annual AGM (which for BP is next April). By staying as large-scale investors they also have the potential to sway any move for a ‘no confidence’ vote when asked, should they see a benefit in that more ‘draconian’ approach.

Edward Mason, a key influencer on the management of the Church’s investments, through his role as head of responsible investment at the Church Commissioners, has a desire for “environmental and social metrics” to form part of the formula determining executive pay in the future. By doing so, it would be in everyone’s (vested) interest to ensure a ‘greener approach’ to the business to ensure that executives do not see their remuneration packages suffer adversely, through unsatisfactory key performance indicator measurements.

It is believed that the Church has direct investments in the region of the tens of millions of pounds in the two companies, who it sees as having the greatest carbon footprint in the UK. They are clearly angered at the lack of action and are keen to press the companies to be ‘greener’ in their outlook in the future, as they seek to avoid the perceived harmful effects from climate change.

There is a precedent for the Church to withdraw their investment when it feels sufficiently aggrieved, such as the decision it made in 2012 when it sold an existing stake in News International. The complaint on that occasion was that in the wake of the scandal caused by phone-hacking, they did not see clear evidence of sufficient plans for reform being put in place or as it was termed at the time the lack of “corporate governance reform”.

In days gone by, the moral stance and religious convictions would have been the Church’s key weapons to bring about change, but it seems that wielding their financial levers may be a more demonstrable method to influence those it sees as acting against the good of the people and their planet these days. They are in keeping with a general move over recent years for all major companies to be seen to be more eco-friendly in their outlook and many are keen to push their own ‘green’ credentials, in much the same way as they produce their financial accounts each year. Pensions funds are another area where a keen eye has been kept on how these are invested in recent years, with many deciding to be more selective in their choices should they disagree with where the money is placed, and those providing the highest returns are not always the ones chosen.

BP have responded by suggesting that they will consider the challenge put to them by the Church before the next AGM, whereas Shell have previously hinted at their potential consideration of similar by recognising that renewable energy does indeed have a large role to play in the future.

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