The Church of Ireland Policy on Climate Change
The Representative Church Body – Report 2016
RCB POLICY ON CLIMATE CHANGE
Climate Change and the impact of fossil fuels on the environment are extremely complex; as responsible investors the RCB is committed to take account of them in the management of its investment portfolios. The Investment Committee has reviewed its investments in this sector at an individual stock level and in terms of overall exposure as well as its investments and commitments to renewable and/or sustainable energy.
The RCB is supportive of public policy to support a diverse energy mix and a transition to a low carbon economy, however, the fact is that fossil fuels will continue to contribute a major component of this energy mix for the foreseeable future and remain one of the most cost efficient methods of energy production. As Christians and responsible investors, the RCB seeks to mitigate and lower the Climate Change impact within our portfolios. The Investment Committee has reviewed the current holdings and is satisfied with the overall energy intensity and balance between fossil fuels and renewables. A restriction has been placed on investments in coal mining companies.
The investment team carries out due diligence on all Environmental, Social and Governance (ESG) issues including Climate Change before making an investment. Once invested, the team (mostly through its collaboration with the Church Investors Group (CIG)) can then engage with companies on a variety of ESG issues, including Climate Change, encouraging them to improve their practices and reduce their emissions.
Clearly there will be on-going debate about the use of fossil fuels, their impact on climate change on the one hand, and how they help bridge the gap between emerging and developed economies on the other. The RCB supports shareholder engagement in the area of environmental sustainability but, on fiduciary grounds, does not advocate a broad divestment at this point. Although it is possible that fossil fuels may ultimately become ‘stranded assets’, this is likely to be many years away. Furthermore petrochemicals are the building block for a huge variety of products and virtually every company in the investment universe is exposed to fossil fuels, if not as a producer then as a consumer and/or distributor. We will continue to explore all these issues, establish reasoned policies and engage with companies as shareholders seeking good long term sustainable profits.
In addition to being a member of the Church Investors Group the RCB has recently become a member of the Institutional Investors Group on Climate Change (IIGCC) who provide investors with a collaborative platform for engagement with public policy makers and exchange of expertise on Climate Change issues.