About 7% of the Church of England's £10 billion ($13 billion) endowment fund was invested in climate and environmental solutions, corresponding to over £800 million, as of December 2022, according to the group responsible for managing it.
The Church Commissioners for England says it has taken further steps this year to enhance the positive impact of its investments by reducing the emissions impact of its portfolio and investing in climate solutions.
In June, the Church Commissioners divested from 11 oil and gas firms, including BP, Shell and Total, because of their lack of action to address climate change. The exclusions mean it no longer holds any oil and gas majors.
The group cited data from the Transition Pathway Initiative showing the firms are not aligned with a pathway to restrict warming to 1.5°C. It vowed to rid its funds of all oil and gas exploration, production and refining companies "unless they are in genuine alignment with a 1.5°C pathway, by the end of 2023", it said.
In 2022, the Church Commissioners also revised its responsible investment strategy and adopted a new net zero and climate change strategy. It has since set short-term climate goals in addition to its long-term target of aligning with a net zero world by 2050.
Beyond this, the asset owner seeks additional impact by supporting climate-positive initiatives in other parts of the portfolio. For example, it helps its farming tenants to provide climate solutions, supporting improvements to slurry infrastructure, or updating lease terms to ensure climate resilience.
When assessing the climate impact of its investment portfolio, greenhouse gas (GHG) emissions of companies and holdings in the portfolio are measured as tonnes of carbon dioxide equivalent (tCO2e) per annum.
The asset owner currently measures Scope 1 and 2 emissions, as well as operational Scope 3 emissions for real assets. As this is not a complete picture for Scope 3, the Church Commissioners says the next step will be to understand these emissions throughout the value chain of a company or asset – as these often far outweigh operational emissions.
The Church Commissioners also seeks to understand the direction of travel for companies or assets within its portfolio, as GHG emissions data does not show the full picture, it says. For example, emission levels do not show whether a product or service provides a solution to climate change and contributes to the net zero transition.
