THE Church Commissioners’ commitment to climate targets “has only deepened”, as they endeavour to bring their portfolio into line with a commitment to reaching net zero by 2050, the First Church Estates Commissioner, Alan Smith, writes.
In his introduction to a new report, Climate Action Plan 2.0, which was published last week, he writes that, in the past five years, there has been “backtracking” on climate targets. “Amidst global conflict, political upheaval, and stagnant economies, many are racing for growth today over all else. As a result, climate targets that were once seen as essential are now seen as optional.”
For the Commissioners, however, “climate targets are not just essential, they are vital,” Mr Smith writes. Reducing the carbon footprint of their £11.1 billion portfolio is a “moral imperative, and a fiduciary necessity”.
The Commissioners’ target was set in 2019, before the General Synod called on all bodies of the Church, including the Commissioners, to “urgently examine what would be required to reach net zero emissions by 2030” (News, 12 February 2020).
A paper accompanying the Synod motion in 2020 excluded the investment portfolio of the Commissioners and the Church of England Pensions Board. A factsheet from Church House says that the Commisioners do not have “direct power to make companies in [their] investment portfolio net zero” and instead have to use their “power as a shareholder to engage with companies”.
In 2023, the Commissioners announced that they would disinvest from fossil-fuel companies because, despite engagement, none had aligned itself with the goals of the Paris Agreement (News, 23 June 2023).
The Commissioners have since excluded further companies from their portfolio owing to lack of engagement on climate targets (News, 18 October 2024).
In the past five years, the carbon footprint of the Commisioners’ equity and property portfolio has been reduced by 70 per cent, exceeding a target of a 25-per-cent reduction by this date, the Chief Investment Officer, Poppy Allonby, says.
Engagement with companies has continued, the report says, and investments in environmental “solutions”, such as energy transition initiatives, has almost doubled, now amounting to about £920 million.
Half of the land held by the Commissioners is categorised in the report as “primarily focused on climate/nature solutions”, but this falls to two per cent in analysis of the assets under external managers (with a further two per cent invested in assets classified as “transition opportunities”).
Of the assets held by external managers, 17 per cent are not collecting data and 31 per cent have not, the report says, “started the journey towards reducing climate outcomes”.
Twenty two per cent, though, are “making progress”, and 11 per cent are aligning with short- or medium-term net-zero targets.
In the next five years, the Commissioners say that they aim, through further engagement with external asset-managers, to boost the percentage of assets classified as “making progress”, or better, and to increase the proportion of investments in environmental solutions.
