To ask the right hon. Member for South West Bedfordshire, representing the Church Commissioners, what steps the Church of England is taking to use its investments to support business transitioning to a low carbon economy.
18 March 2020
As responsible investors and members of the UN-convened Net Zero Asset Owner Alliance, the Church Commissioners regard climate change as a vital issue and have pledged to transition their investment to a net-zero greenhouse gas emissions portfolio by 2050. They will set their first interim emissions reduction target as members of the Net Zero Asset Owner Alliance in 2020 and will work with their public equities managers to achieve it.
The Church of England National Investing Bodies (NIBs), are guided by the commitments made by the NIBs in July 2018 General Synod debate on climate change and investment. Starting in 2020 the NIBs are committed to disinvest from companies that are not taking seriously their responsibilities to assist with the transition to a low carbon economy. In a new commitment, the NIBs indicated that by 2023 they would disinvest from fossil fuel companies that are not prepared to align with the goal of the Paris Agreement.
The Transition Pathway Initiative (TPI) is a global initiative, co-founded by the Church of England National Investing Bodies in 2017, to assess companies' preparedness for the transition to a low carbon economy. It ended 2019 supported by investors with over $16 trillion of assets.
The Church of England Pension Board launched the FTSE TPI Climate Transition Index in January at the London Stock Exchange . The Index rewards those companies with public targets aligned to the Paris Agreement whilst significantly underweighting or excluding those that do not.
The new index embeds forward-looking climate data from TPI - namely the TPI carbon performance metric that assesses a company on its plans for alignment with the transition to a low carbon economy. Companies currently excluded from the index would be included if they set public emissions targets (covering all their emissions) aligned to the goals of the Paris Agreement. We believe it to be the first global index of its kind that will allow passive funds to play an active role in supporting the Paris Climate Agreement.
The Church is also part of Climate Action 100+ (‘CA100+'), which is an investor initiative seeking to ensure the world's largest corporate greenhouse gas emitters take necessary action on climate change, consistent with goal of the Paris Agreement to restrict warming to well below two degrees Celsius. CA100+ is supported by more than 370 investors with over $41 trillion of assets. The Commissioners were founding supporters, the Transition Pathway Initiative is one of the Climate Action100+ official data partners, and its assessments are used to benchmark companies.