Methodists to expand disinvestment option on fossil fuels
28 April 2015
Finance Board of the Methodist Church, which manages
investments of £1.1 billion for the Church, has announced a new
investment policy on climate change.
The policy, launched today at the CFB's annual General
Meeting, sets out how the CFB will assess the exposure of companies
to different types of fuel when managing its investment
Climate Change - Implications for Different Fuels, adds to the
CFB's existing investment approach, reflecting the Methodist
Church's positions and actions on climate change. The CFB has had a
specific climate change policy in place since 2009. Its most recent
action on climate change has been to co-file shareholder
resolutions on carbon emissions management at the BP and Royal
Dutch Shell AGMs this year, as part of the 'Aiming for A'
coalition. The CFB also incorporates emissions disclosure in its
voting at company AGMs.
The CFB extended its work on climate change last year by
examining the electricity generation industry, which is the largest
single contributor to UK carbon emissions. This led to
additional exclusions from investment and outlined a basis for
deeper engagement with companies.
"If global warming is to be halted, companies need to act
in a way consistent with efforts to achieve that outcome," said
Bill Seddon, Chief Executive of the CFB, at the launch of the new
"We are committed to engaging proactively with companies
to influence their involvement in fossil fuel extraction.
Ultimately, as a last resort, we have the option of
disinvesting from a company if it continues to base its business
model on the assumption that emissions targets need not be
The policy commits the CFB to encouraging companies to
invest in a way consistent with efforts to reduce greenhouse gas
emissions in developed markets by 80%, and globally by 50%, by
2050. The policy states that the CFB will "evaluate companies based
on the quality and level of disclosure of their emissions and
emissions intensity, and the implications of their business models
and investment plans for future emissions reductions." Coal
is recognised as the most carbon intensive fuel, but the extraction
of oil from tar sands is also highlighted because it has a larger
carbon footprint than conventional oil production.
The policy states that companies with investment plans
that imply a low probability that emission reduction targets will
be met, or which have significant exposure to coal or oil from tar
sands, "would be inconsistent with the positions and actions of the
Methodist Church and may lead to exclusion" from investment
portfolios. For example, this may include companies which have
business models "dedicated to exploring for and developing those
The policy also commits to looking at how companies lobby
on climate change issues as well as continuing to review local
environmental impacts, human rights, and health and safety
The policy can be downloaded from the CFB
website. It was drafted by the Methodist Church's Joint
Advisory Committee on the Ethics of Investment and approved by the
CFB Council. It will also be adopted by the CFB's subsidiary
organisation, Epworth Investment Management Limited (Authorised and
Regulated by the FCA), which manages assets for church and charity
here for more information on the Methodist Church's
approach to climate change.