20

Jun

2016

ON response to Church of England consultation on extractive industries

 

Operation Noah has responded to the Church of England’s Ethical Investment Advisory Group (EIAG) consultation on extractive industries. A summary of the response can be found below and the full response can be found here.

We are very glad to have the opportunity to offer you our views for the EIAG consultation on extractive industries. First and foremost, we wish to remind the EIAG of the growing urgency of climate change and the ambition level of the Paris Agreement, which was higher than previously expected – meaning that an even faster transition from fossil fuels to renewable energy is required. Given our area of expertise as an organisation, we restrict the focus of our response to this consultation to the impact of extractive industries, in particular the fossil fuel industry, on the issue of climate change.

We welcome the decision taken by the Church Commissioners and The Church of England Pensions Board in April 2015 to disinvest from coal and tar sands companies, following advice from the EIAG. We continue to believe that the Church should disinvest from all fossil fuel companies and support the transition to a zero-carbon future through greater investment in renewable energy. Nonetheless, given the recommendation of the EIAG (which was subsequently adopted by General Synod) to pursue a policy of ‘robust engagement’ with oil and gas companies, we seek to outline in this response what such engagement must entail in order to keep global temperature rises below 1.5°C.

At General Synod in July 2015, an amendment was passed requesting the EIAG and NIBs to publish their ‘engagement framework’ on climate change and fossil fuels by June 2016. While recognising the importance of other extractive industries, such as mining, and the positive impact that Church engagement could have in holding such industries to account, the extreme nature of the threats which climate change pose means that it must remain the primary concern of the EIAG and the NIBs.

In the context of the Paris Agreement, we strongly believe that the Church of England should base its policy on ensuring that global temperature rises remain below 1.5°C (rather than 2°C), since aiming for 2°C would be disastrous for low-lying island states such as Tuvalu and Kiribati. If the Church of England does not take this into account in its environmental policy and engagement with fossil fuel companies, it is effectively consenting to the fact that the peoples of these islands have no future.

All of the major oil and gas companies are currently projecting a considerable increase in fossil fuel use over the next 20-25 years (BP projects a 24% increase by 2035; Exxon expects a 27% increase by 2040; Shell projects a rise of 37% by 2040). This is completely incompatible with the Paris Agreement and the need to keep global temperature rises below 1.5°C (or even 2°C!), and suggests that oil and gas companies are not taking seriously the need to move towards a zero-carbon economy.

As Carbon Tracker has stated, fossil fuel companies will need to begin the process of winding up their operations in order to ensure an orderly transition and reduce the risk of stranded assets and financial instability. In its engagement with oil and gas companies, the Church of England must ensure that its demands reflect this reality. The threat of disinvestment must be credible and acted upon if these demands are not met.