Church of England produces biased survey on fossil fuel disinvestment
Operation Noah reflects on biased EIAG survey
The Church of England’s Ethical Investment Advisory Group (EIAG) is reviewing its policy advice on climate change for the Church’s national investing bodies. As part of the process it has produced a survey asking if, and how, the Church of England should reduce the carbon emissions of its investments, and in particular whether the Church should disinvest from fossil fuels.
In principle Operation Noah welcomes EIAG consulting on the policy review; however we find this survey is biased and ill-informed, containing both leading questions and false choices. It suggests that EIAG has a clear agenda against fossil fuel disinvestment, and makes it difficult for stakeholders to express their views effectively.
We recommend that those considering completing the survey read these reflections first, and then send their comments to EIAG (see below for details).
The financial implications of disinvestment
EIAG explain that the £8 billion of investments held by the Church of England investment bodies (Church Commissioners, Church of England Pensions Board and the CBF Church of England funds) are managed for the purposes of paying clergy pensions and funding the work of the Church. They state that the national investing bodies are required to manage these investments in the interests of the beneficiaries of the funds, and in particular their financial interests. This is only partly true. EIAG fails to state that the duty of institutional investors also extends beyond maximising short-term financial gain; and that the Church of England in its own ethical investment policy accepts a duty to avoid ‘profiting from, or providing capital to, activities that are materially inconsistent with Christian values’. In order to do so, all charities are permitted by the Charity Commission to accept the risk of a lower-than-best rate of return if a particular investment conflicts with their aims.
By the nature of their questions EIAG imply that disinvestment from fossil fuels would inevitably have a large negative financial impact on C of E investments and that this would consequently adversely affect the clergy and the mission work of the Church. In reality, there is increasing evidence of the financial need for disinvestment. Publicly listed fossil fuel companies, with reserves valued in the trillions of dollars on the world’s stock markets, will have to leave most of their assets in the ground if we are to keep climate change below 2°C. Fossil fuel companies are therefore hugely overvalued. Their shareholders risk being left with stranded assets – worthless fuel stocks that regulation will prevent from being burned, or can only be consumed at unimaginable cost to us all. Either result will be a disaster for investments and pension funds.
The church’s response to climate change
The survey implies that we have a choice as to how we respond to climate change and the degree to which it is important to do so. This is simply not true. Why ask whether we ‘should drop all other concerns to fight climate change’ (Question 9) or require survey participants to rank their concerns for poverty, climate change, energy security and other issues (Questions 7 and 8)? This is an absurd reading of the problem. Climate change threatens everything on earth as we know it and its impact is already being felt. Extreme weather events like Typhoon Haiyan that hit the Philippines in November this year are likely to become more frequent as a consequence of climate change. Across the world people are already dying; ecosystems being wiped out; and livelihoods destroyed. By responding to climate change we do not ignore poverty, we address it. By moving away from fossil fuels we would create more (green) jobs, not lose them; and reduce, not increase, fuel poverty.
The survey asks participants to indicate what level of temperature increase they think we can live with, ranging from 1 – 6 °C (Question 15). This is quite simply astonishing given that there is both a scientific and political consensus that 2°C is the threshold below which we must stay (though just last month a prominent group of scientists including James Hansen and Jeffrey Sachs released a paper showing how even 2°C would be ‘disastrous’ for the world). It is at best naïve to assume that we have a choice; and it is unclear who the ‘we’ refers to. There is a wealth of research and analysis available about what the impact of a 4 °C world would be like, and it is not that of a flourishing creation. Humanity would experience the flooding of coastal cities, freshwater shortages, food production deficits, malnutrition, epidemics, loss of biodiversity and population displacements of unparalleled severity. These impacts are likely to be ‘inherently unequal and tilted against many of the world’s poorest regions’. Such a world may be ‘beyond adaptation’. These numbers are not controversial or radical; but it would be for the Church of England to ignore them.
If we are to get off the trajectory towards 6°C temperature rise which we are currently on, we all need to act very quickly. The longer we leave it, the more rapid and thus more painful the drop in emissions will need to be. The survey asks who is more responsible for causing climate change (fossil fuel companies, business generally, investors, governments or all of us) and then which of these actors will most determine if we deal with the threat (Questions 17 and 18). There is no one solution for a problem of this magnitude. Solutions will and must come from multiple fronts. Christians and churches are doing much that should be celebrated to reduce the carbon footprints of their own lives and that of their churches. Christian investors and activists are pushing for new policies that incentivise low-carbon behaviour and business. Why not disinvest too? And re-invest at least some of these funds in building the low carbon, sustainable and fair future that we are all praying for.
We are all responsible. But those of us in positions of power through wealth or moral authority have a particular responsibility to act and to lead: this certainly includes the Church of England.
What can you do?
We would recommend that you:
- email email@example.com with your comments on the survey here. EIAG climate change review stakeholder survey OR
- if you really want to fill in the online survey then make liberal use of the text boxes (but note the tick options have to be filled and make it very hard to express anything other than a particular response). The deadline for responses is 18th December.