Ethical investment: ‘not just avoiding the bad’

This article first appeared in the January issue of the Anglican Journal.

Whether it is the Rockefeller family joining a campaign to withdraw $50 billion from fossil fuel investments over the next five years or the Boycott, Divestment and Sanctions (BDS) movement pushing for changes in Israeli policies toward Palestine, many people are thinking and talking about where they don’t want to put their money.

But while visiting the national offices of the Anglican Church of Canada, Edward Mason, a leader in the Church of England’s ethical investing, suggested that churches might want to look at the issue from another angle.

“There’s still a tendency to think of church ethical investment as avoiding the bad stuff, and that is important, but it is kind of a hygiene factor,” Mason said, mentioning “hard screens” that many organizations have in their investment policies against businesses such as tobacco, alcohol, pornography and armaments. “We think now that the most interesting thing is who you do invest in and how those investments can be part of the witness and mission of the church.”

The Church of England has three national investing bodies, Mason explained. He is head of responsible investment for the largest of them, the Church Commissioners for England, the church’s endowment. Together with a pension fund and a suite of funds managed by a church and charity-owned fund manager, CCLA, he said there is about £9 billion of central Church of England money that is managed with a common ethical investment policy. “It works very well for us as a church to have a common ethical investment policy so that we are all doing the same things and one investment body isn’t picked off against another and they are kind of benefiting from the same quality of advice.”

It also gives the church clout as an investor. The Ethical Investment Advisory Group votes on behalf of the commissioners and pension board at corporations’ general meetings, and Mason says that staff meet directly with executives of about 40 to 50 companies a year. “If a British company is going through a really bad ethical time, we’ll have really quite an intense engagement process with them,” he said, citing British Petroleum’s oil spill disaster in the Gulf of Mexico as an example. “We do have the option of divesting from any company on ethical grounds if we think they are not addressing these problems seriously enough, so we can have quite hard-edged conversations with the companies.”

He mentioned that in recent years, the church did divest from NewsCorp after the phone hacking scandal and from Vedanta Resources, an Indian mining company, for not showing the respect for human rights in local communities that the church expected and for not responding to the concerns expressed.

“We don’t expect perfection,” Mason said, “but we expect a positive direction of travel and a willingness and desire to make that positive journey. So with BP, it was reforming their safety procedures, which they put a huge amount of effort into.”

Henriette Thompson, director of public witness for social and ecological justice for the Anglican Church of Canada, noted that there is a renewed focus on investment issues for the Canadian church because the joint declaration on responsible resource extraction made with the Evangelical Lutheran Church in Canada (ELCIC) at the 2013 Joint Assembly commits the churches to “advocate for responsible and ethical investment and actions by individuals, faith communities, corporations, and governments both in Canada and around the world.”

Thompson is part of an ad hoc working group that is studying the responsible investment policies of entities within the Anglican Church of Canada as well as the ELCIC, and she said the workshop and meeting with Mason were a “really welcome opportunity to move forward in the area of advocacy and the responsible and ethical investment work.”

Peter Chapman, executive director of Shareholders Association for Research and Education (SHARE), co-ordinated the workshop and meeting while Mason was in Canada for another event in late September.

SHARE is a non-profit organization that advises small investors, including the United Church of Canada and its pension plan, the Presbyterian Church and some Roman Catholic foundations and religious communities. “Our primary tools are education for investment decision-makers, engagement, and proxy voting,” explained Chapman. “We engage 50 to 60 companies a year in the Canadian market on about a dozen themes.” Climate change, equality and human rights, and resource extraction are the top three.

Issues of ethical investment were once tackled for Canadian churches by the ecumenical Task Force on Churches and Corporate Responsibility (TCCR), which fell apart following the formation in 2001 of the ecumenical social justice organization Kairos Canada, whose mandate didn’t include the kind of work done by the task force. Chapman, who used to work at the TCCR, said he “essentially uses that as a model for what we do but have expanded it, particularly given the declining capacity and scale for religious investors.”