ESG Club interview – Church Commissioners for England


The Church Commissioners have commit- ted to divesting from fossil fuel companies which are not aligned with the Paris Agreement goals. Where are you with these plans?


Back in 2021, we excluded 20 oil and gas majors from our investment portfolio. We are now excluding BP, Ecopetrol, Eni, Equinor, Exxon Mobil, Occidental Petroleum, Pemex, Repsol, Sasol, Shell and Total, after concluding that none of them are aligned with the goals of the Par- is Climate Agreement, as assessed by the Transition Pathway Initiative. The broader exclusion of all oil and gas exploration, production and refining com- panies will follow by the end of 2023. The decision to disinvest was not taken lightly. Alan Smith [First Church Estates Com- missioner] has said on the issue that the energy majors have not listened to the voices in society or markets they serve and they are not moving quickly enough on the transition.


Last year you made a commitment to vote against companies that do not meet expectations on human rights. Why is this important?


It comes back to having respect for the people. On a human rights policy, we expect all companies to respect human rights. That is a fundamental expectation. And it underpins other social themes like decent work, just transition and artificial intelligence ethics. We also recognise, as I have said, social inequality is a systemic risk, which can


create a risk to investors like us. The Busi- ness Commission attacked inequality, and we agree with their view that at the heart of that risk is how companies respect human rights. So it brings together our ethical thinking and our long-term systemic risk thinking. It is about how we take that systematic approach.


Would you divest from a company over this issue as a result?


What we are looking at is whether they have


policy commitments to respect


human rights and whether they imple- ment due diligence. These topics are well aligned to the legislative requirements. It is a good hook to engage with companies. It is not really a disinvestment conversa- tion. But if there are breaches of human rights, that is then a different conversation.


The Church Commissioners list the themes as Respect for People and Respect for the Planet. What do they mean?


As I mentioned, it is big and we look at where both come together: like a just tran- sition for workers towards net zero, or respect for land and rights in addressing nature loss. It gives us a focus area of the things we want to see. We have set out net-zero tar- gets. It gives us the ability to say why we are talking about these topics and gives us a framework in which to bring all the things together. We are recruiting for a planet lead at the moment.


Your experience is leading social and human rights rankings and impact at the World Benchmarking Alliance. Has your time as a social performance consultant and an officer in the Royal Navy served you well in your current role?


I hope so. I have had a wiggly career path. It is good to have a diverse experience coming into a role like this.


And there are some unrealistic expecta- tions placed on the ESG stuff – to be experts across all of its issues. One of the Navy’s defined traits is to be cheerful in adversity. That’s useful when we have emerging dramas. Worse things have happened at sea. I bring that with me when it comes to emergencies or problems. From the civil society piece, it is engag- ing with companies and understanding what engagement looks like. That has been useful.


What have been your biggest challenges in this role? Moving into a different space. It has been learning about the Church Commission- ers, as it is a complex organisation. It has a long and distinguished history and is a diverse investor. There has been a lot to learn. So the biggest challenge has been wrapping my head around it all.


What are your main priorities going for- ward and why?


The S has been a poor cousin to the E.


One of them is the human rights voting approach. We are looking to publish a round up on this towards the end of the year. But we also recognise the lack of data on this. So we are in the grip of some- thing for investors to engage with data providers on this topic. That is something we want to carry forward. We want to take systemic action, but we recognise the data is not yet available. A broader priority is to bring all these dis- parate elements into an overarching social plan. This is so that we can have a social action plan close to that of a climate action plan.


30 | portfolio institutional | October 2023 | Issue 127


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