Church of Ireland RCB Policy on Climate Change 2017
The Representative Church Body – Report 2017
The RCB’s investment strategy is aligned to the Church of England’s investment strategy in its commitment to make the transition to a low-carbon, climate resilient and sustainable economy. To date, renewable energy investment commitments include €8.5m million for the Irish Energy Efficiency Fund; a €3 million investment in Next Energy solar Fund, €5.4m investment in a UK on-shore wind farm Fund and a €10m commitment approved for investment in forestry. The Funds have additional exposures through holdings in various Infrastructure Funds with exposure to solar and wind assets as well as individual equity holdings that contribute to environmental sustainability in various ways such as animal feed additives that reduce methane emissions in cattle, climate smart agriculture and crop nutrition.
The Investment Managers screen the portfolios at least annually from an Environmental, Social and Governance perspective and flag any issues of concern to the Investment Committee. The Investment Committee is satisfied with the overall disposition of the energy component of its portfolios and the balance between an increasing renewables exposure and a reducing fossil fuel element.
The fund’s exposure to the energy sector has reduced substantially in the past 5 years and will continue to reduce over the coming years given the significant commitment to various renewable investments. Exposure of the Unit Trusts (the investment vehicles for parishes in Northern Ireland and the Republic of Ireland) to oil and gas producers now stands at less than 3% of fund value (from 10% at the end of 2011). The RCB acknowledges that those companies which are most exposed to and least prepared for transition to a low-carbon economy may be candidates for engagement and/or ultimately divestment.
As part of its ongoing commitment to Climate Change the RCB expanded its ESG policy in 2016 to include a restriction on companies involved in the production of tar sands in addition to the restriction on coal implemented in 2015. It is expected that the Climate Change Policy will continue to evolve over time alongside its due diligence on all Environmental, Social and Governance (ESG) factors with particular regard to their impact on shareholder returns. The Investment Committee will continue to seek out companies with exposure to renewable energy and commitments to reduce their carbon footprint and will undertake to review the investment case for companies that appear not to be aligned with the long-term transition to a low-carbon economy.
The RCB supports shareholder engagement in the area of environmental sustainability – it does this through its membership of the Church Investors Group (CIG) and 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. Engagement and shareholder resolutions have been undertaken with a number of companies to achieve increased transparency and reduced CO2 emissions. The RCB’s investment portfolio is only an element of the wider issue of Climate Change as the Carbon footprint of the Church as a whole should be considered. Each Diocese is encouraged by the RCB to reflect on how it may contribute to a more ‘Climate Friendly’ community within the Church of Ireland. The RCB is committed to the principle of long term sustainability and efforts to mitigate the impact of man-made climate change.
February 2017 Reproduced from the Book of Reports 2017, page 102
RCB Policy on Climate Change
The RCB is supportive of public policy to support a diverse energy mix and a transition to a low carbon economy. As Christians and responsible investors, the RCB on behalf of the Church of Ireland seeks to mitigate and lower the Climate Change impact within its investment portfolios.The RCB’s investment strategy is aligned to the Church of England’s investment strategy in its commitment to make the transition to a low-carbon, climate resilient and sustainable economy. To date, renewable energy investment commitments include €8.5m million for the Irish Energy Efficiency Fund; a €3 million investment in Next Energy solar Fund, €5.4m investment in a UK on-shore wind farm Fund and a €10m commitment approved for investment in forestry. The Funds have additional exposures through holdings in various Infrastructure Funds with exposure to solar and wind assets as well as individual equity holdings that contribute to environmental sustainability in various ways such as animal feed additives that reduce methane emissions in cattle, climate smart agriculture and crop nutrition.
The Investment Managers screen the portfolios at least annually from an Environmental, Social and Governance perspective and flag any issues of concern to the Investment Committee. The Investment Committee is satisfied with the overall disposition of the energy component of its portfolios and the balance between an increasing renewables exposure and a reducing fossil fuel element.
The fund’s exposure to the energy sector has reduced substantially in the past 5 years and will continue to reduce over the coming years given the significant commitment to various renewable investments. Exposure of the Unit Trusts (the investment vehicles for parishes in Northern Ireland and the Republic of Ireland) to oil and gas producers now stands at less than 3% of fund value (from 10% at the end of 2011). The RCB acknowledges that those companies which are most exposed to and least prepared for transition to a low-carbon economy may be candidates for engagement and/or ultimately divestment.
As part of its ongoing commitment to Climate Change the RCB expanded its ESG policy in 2016 to include a restriction on companies involved in the production of tar sands in addition to the restriction on coal implemented in 2015. It is expected that the Climate Change Policy will continue to evolve over time alongside its due diligence on all Environmental, Social and Governance (ESG) factors with particular regard to their impact on shareholder returns. The Investment Committee will continue to seek out companies with exposure to renewable energy and commitments to reduce their carbon footprint and will undertake to review the investment case for companies that appear not to be aligned with the long-term transition to a low-carbon economy.
The RCB supports shareholder engagement in the area of environmental sustainability – it does this through its membership of the Church Investors Group (CIG) and 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. Engagement and shareholder resolutions have been undertaken with a number of companies to achieve increased transparency and reduced CO2 emissions. The RCB’s investment portfolio is only an element of the wider issue of Climate Change as the Carbon footprint of the Church as a whole should be considered. Each Diocese is encouraged by the RCB to reflect on how it may contribute to a more ‘Climate Friendly’ community within the Church of Ireland. The RCB is committed to the principle of long term sustainability and efforts to mitigate the impact of man-made climate change.
February 2017 Reproduced from the Book of Reports 2017, page 102
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