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Concern over Church of England pension board fossil fuel industry links | Fossil fuel divestment

Key members of the Church of England’s pensions board have strong links to the fossil fuel industry, research has shown, amid concerns about the organization’s plans to end its investments in high-carbon companies.

Analysis by DeSmog, the environmental investigation group, has found three prominent members of the pensions board of the Church Commissioners, the body that looks after Church of England investments, with former or current roles in energy companies, while other major figures have indirect links.

The Church of England began to cut ties to coal and other heavily polluting industries in 2015, then pledged in 2018 to divest by 2023 from high-carbon companies that were “not aligned with the goals of the Paris agreement”. But as the deadline approaches, the organization has said it is still “engaging” with key oil and gas interests rather than canceling all of its holdings.

Chris Manktelow, of the Young Christians Climate Network, said this was not good enough. “I understand why the church wants to engage, but I don’t think the strategy of engagement is working,” he told the Guardian. “The church should be moving quickly and showing moral leadership, and is just not going fast enough. We are not happy with this response [to the calls to divest].”

There are also questions about the church’s approach to oil and gas companies that claim they are on a trajectory to net zero emissions. Some fossil fuel companies – including BP, Shell and ExxonMobil – have set out strategies to reach net zero, but many experts regard these plans as flawed. ExxonMobil, for example, is only planning to reduce the emissions from its operations, rather than those that arise from burning the oil and gas it produces.

However, the Church Commissioners recently decided to retain investment in ExxonMobil. Manktelow said: “We think the church should reconsider this decision.” Manktelow said he was also “surprised and concerned” by the links between senior figures in deciding the church’s investments and the fossil fuel industry.

Chris Mather, the chair of the Church of England pensions board, is a former chief executive of Shell Canada, from which he retired in 2007. During his tenure, the company embarked on a massive expansion into “tar sands”, which campaigners say has laid waste to vast tracts of Canada’s wilderness.

Richard Hubbard, the chair of the board’s pensions committee, worked for BP for nearly 30 years, ending as director of the oil giant’s European cross-border pension plan before retiring in 2020.

David Nussbaum, on the Church of England’s ethical investment advisory group, and a former chief of the conservation group WWF, has held a directorship at Drax since 2017. Drax is formerly the UK’s biggest coal-fired power plant and still the largest source of carbon Dioxide emissions, having switched its boilers to burning trees.

Others with indirect links include Alan Smith, the first church estates commissioner, a former head of risk strategy at HSBC, the bank which has financed more than $100bn (£73bn) in fossil fuels since the 2015 Paris agreement; and Dami Lalude, also a member of the ethical investment advisory group, who worked in the natural resources group at the bank Goldman Sachs, which has also provided $100bn to fossil fuel interests since 2015.

Justin Welby, the archbishop of Canterbury, also has a background in the fossil fuel industry, having worked for oil companies for more than a decade before ordination.

Darrell Hannah, the rector of All Saints Church, Ascot, and chair of the Christian climate change charity Operation Noah, told DeSmog he feared the decision-making bodies could be compromised.

“We are deeply concerned by the Church of England national investing bodies’ ties to the fossil fuel industry, which raise significant questions around conflicts of interest,” he said. “How can the board continue to lead engagement with Shell, on behalf of Climate Action 100+ [an investor-led initiative to push big companies to do more on the climate crisis]when the chair of the pensions board is the former CEO of Shell Canada?”

The Church Commissioners, the body that looks after the investments that pay Church of England pensioners, said the policy of engagement was paying off.

“The Church of England’s national investing bodies have taken the view that they have more influence on high-carbon industries by being in the room rather than by disinvesting,” a spokesperson told the Guardian. “By engaging with high-carbon-emitting companies, we can address the climate crisis and bring about real world change. Our engagement is not open-ended and we are explicit in our expectation that we will disinvest from companies that are not responsive to engagement.”

The spokesperson added: “It is not a surprise that we want experts from industry and finance on our governance bodies to help us make the right decisions. Our board members and their backgrounds are disclosed and readily available online. They operate to the highest ethical and responsible investing standards. They sit alongside other board members from a variety of backgrounds, including church and other third-sector experience. By calling out these individuals incorrectly suggests that the church’s decisions are somehow influenced by those associations.”

The strategy was making “significant progress”, as 20 companies had agreed to “making climate-related changes to stay off our restricted list” since 2020, and a further 28 companies were excluded from its investment list on ethical grounds last year.

“We want to achieve a net-zero world, not only a net-zero investment portfolio.”

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