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

The recent news that the Church has madeit be known that they want to see the oil companies increase their efforts to tackleclimate change, represents a thinly veiled accusation that they feel that theyare dragging their heels at present.

By warning them in advance they clearlyhope to alter the stance being taken by the companies without having to actuallywithdraw what they clearly see as valuable elements in their substantialInvestment portfolio. By maintaining an investment presence, they feel they canmore ably influence and in effect ‘guide’ company behaviours than by merelyselling their stakes. The fact that in total the Church has a portfolio somewherein 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 expectationsaround the business direction of the companies they invest in.

Particularly so,if (when as shareholders) they act in a collaborative way with other investorsand can call for resolutions to press for matters to be addressed at such as theannual AGM (which for BP is next April). By staying as large-scale investors theyalso 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 themanagement of the Church’s investments, through his role as head of responsibleinvestment at the Church Commissioners, has a desire for “environmental andsocial metrics” to form part of the formula determining executive pay in thefuture.

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 theirremuneration packages suffer adversely, through unsatisfactory key performanceindicator measurements.

It is believed that the Church hasdirect investments in the region of the tens of millions of pounds in the twocompanies, who it sees as having the greatest carbon footprint in the UK.

Theyare clearly angered at the lack of action and are keen to press the companiesto be ‘greener’ in their outlook in the future, as they seek to avoid theperceived harmful effects from climate change.

There is a precedent for the Church towithdraw their investment when it feels sufficiently aggrieved, such as thedecision 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 byphone-hacking, they did not see clear evidence of sufficient plans for reformbeing put in place or as it was termed at the time the lack of “corporategovernance reform”.

In days gone by, the moral stance andreligious convictions would have been the Church’s key weapons to bring aboutchange, but it seems that wielding their financial levers may be a moredemonstrable method to influence those it sees as acting against the good ofthe people and their planet these days.They are in keeping with a general move over recent years for all majorcompanies to be seen to be more eco-friendly in their outlook and many are keento push their own ‘green’ credentials, in much the same way as they producetheir financial accounts each year.

Pensions funds are another area where a keeneye has been kept on how these are invested in recent years, with many decidingto be more selective in their choices should they disagree with where the moneyis placed, and those providing the highest returns are not always the oneschosen.

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

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