The Church Commissioners and the Church of England Pensions Board will disinvest from fossil fuels this year over the failure of oil and gas companies to meet their climate pledges.
In a statement the Church said it would divest from fossil fuels in its £10.3bn endowment fund and its pension fund because oil and gas companies were failing to show sufficient ambition to decarbonise in line with the aims of the Paris agreement.
The move comes after the Church set out a five-year strategy in 2018 to invest in climate solutions, including divest from fossil fuel companies not aligned with the Paris Agreement.
In a recent report on their Approach to Climate Change, the Church's National Investing Bodies (NIBs) noted that, while some companies have made significant progress, no fossil fuel company has passed the 2023 hurdles set by the NIBs. As a result, yesterday the Church Commissioners for England and the Church of England Pensions Board each announced their intentions to disinvest accordingly.
'Some progress has been made, but not nearly enough. The Church will follow not just the science, but our faith – both of which call us to work for climate justice' – Archbishop Justin Welby
The Archbishop of Canterbury, Justin Welby, said: 'The climate crisis threatens the planet we live on, and people around the world who Jesus Christ calls us to love as our neighbours. It is our duty to protect God’s creation, and energy companies have a special responsibility to help us achieve the just transition to the low-carbon economy we need.
'We have long urged companies to take climate change seriously, and specifically to align with the goals of the Paris Climate Agreement and pursue efforts to limit the rise in temperature to 1.5°C above pre-industrial levels. In practical terms that means phasing out fossil fuels, investing in renewables, and plotting a credible path to a net-zero world.
'Some progress has been made, but not nearly enough. The Church will follow not just the science, but our faith – both of which call us to work for climate justice.'
The announcement comes after the new CEO of Shell, Wael Sawan, abandoned plans to cut oil production each year for the rest of the decade, partly in a bid to increase payouts to shareholders, The Guardian newspaper reported. In February, BP also scaled back its plans to cut oil and gas production this decade.
Faith-based institutions are a significant part of the global divestment movement, which involves selling assets related to the fossil fuel industry and also committing not to invest in them in future.
In April this year, 31 faith institutions from six countries announced they were divesting from fossil fuels. The divestment announcement by faith institutions represented well over $2 billion in assets under management, according to Operation Noah's Bright Now Campaign.
It said more than half of all Church of England dioceses had already made commitments to divest, as well as half of all Catholic dioceses in England and Wales. In fact, nearly every major Christian denomination in the UK has divested or made commitments to do so.
No room for new fossil fuel developments
Last month, the UN climate body issued a final warning, making it clear there was no room for new fossil fuel developments as emissions from existing developments would exceed the amount of carbon that can be emitted and still limit global heating to safe levels.