Church of England fund drops oil majors

The Church Commissioners for England, which manages activist investor Church of England's £10.3bn ($11.3bn) endowment fund, said today it is dropping oil and gas majors, including BP, TotalEnergies, ExxonMobil and Shell, from its investment portfolio, because they are not aligned with the goals of the Paris agreement.

Other oil and gas firms excluded by the Church Commissioners for England include Colombia's state-controlled Ecopetrol, Itay's Eni, Norweign state-controlled Equinor, US firm Occidental Petroleum, Mexico's state-controlled Pemex, Spain's Repsol and South Africa's Sasol.

The 2015 Paris climate agreement calls for global warming to stay "well below" a 2°C rise in pre-industrial temperatures and ideally limit it to 1.5°C.

Church of England said it could reconsider its position if these firms come into alignment with its criteria, adding the decision was not taken "lightly" but that the majors are not moving quickly enough for the energy transition.

In 2018, Church of England agreed a timeline for its investing bodies to disinvest from fossil fuel companies not aligned with the goals of the Paris agreement by the end of 2023.

"In practical terms that means phasing out fossil fuels, investing in renewables, and plotting a credible path to a net zero world," Archbishop of Canterbury Justin Welby said. "Some progress has been made, but not nearly enough."

Church of England said it had excluded 20 oil and gas firms from its investment portfolio in 2021. It also said it will exclude "all other companies primarily engaged in the exploration, production and refining of oil or gas, unless they are in genuine alignment with a 1.5°C pathway by the end of this year."

It recently backed a climate resolution submitted at Shell's annual general meeting by Dutch activist investor group Follow This, although it failed to garner the support the activists hoped for.

By Caroline Varin