Church of England shows value of impact investing

The Church of England made an impressive 17.1% return on investments in 2016. It believes its policy of following strict ethical criteria, not profits, is responsible for its success.

Banks and asset managers are looking enviously toward the UK and the Church of England. The Church Commissions for England, which manages assets of nearly £8 billion, announced last month that it earned an unprecedented 17.1 per cent return on investments in 2016. By way of comparison, large Swiss pension funds achieved an average yield of between 2 to 4 per cent in recent years, reported the Swiss daily newspaper the Tages Anzeiger.

The church credits its impressive results to its ethical investment policy. Richard Saunders, its head of equities, told the Guardian: “We have always argued that ethical investing does not put us as a disadvantage,” adding that the church has a strong ethical approach and invests over the long term.

But the church does more than just invest ethically; it also takes action to ensure that the companies it holds shares in behave ethically.

Last year, the Church Commissioners established an ‘engagement’ department to influence AGMs in the areas of executive remuneration, climate change and board diversity. With results: in 2016, the Commissioners voted against the majority of remuneration reports and called on company remuneration committees to better exercise their judgment on executive pay. And in support of its gender diversity policy, it also voted against all male board members in instances where female representation was below 25 per cent.

It’s also made good on its climate change commitments. The Commissioners were instrumental in filing climate disclosure resolutions at Anglo American, Glencore and RioTinto, and it filed a joint shareholder resolution at the world’s largest oil company, ExxonMobil, seeking further disclosure on climate change.

With success: in May this year, Exxon shareholders pushed through a resolution requiring the company to provide annual reports showing how its business will be affected by global efforts to reduce climate change. 62.3 per cent of shareholders supported the motion despite strong opposition from the company’s board. The Church Commissioners head of responsible investment, Edward Mason, called it a “historic vote”.

 

Image credit: Antony McCallum 

 

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