World leaders gathered in Glasgow in November 2021 for the great climate conference, COP26, as the global build-up of greenhouse gasses reached a historic high.1 The gap between talk and impact on the climate crisis seems as wide as ever. Meanwhile, the actions of protesters highlighting this gulf became more disruptive, with sitdowns on major motorways being followed by high-profile arrests and possible prison sentences. It feels as if climate change is becoming one of the battlegrounds in the much-vaunted culture wars of our time. Those with the power to effect change look for the kind of change that doesn’t impact unduly on the electorate, whilst no action that can be taken in a real-world democracy appears to be sufficient to satisfy the single-issue campaigners.

But it would be wrong to assume that agency lies only with government on the one hand and activists on the other. Notwithstanding the numerous small actions that individuals and communities can take to reduce our impact on the environment, the sector of the economy that receives much attention, but which is hardest to hold to account, is the corporate world. Many would argue that it is the fundamental lack of accountability within current structures of the capitalist economy that prevent many of the measures which could have the greatest impact from ever happening. This makes it all the more urgent to deploy any levers available to hold businesses – especially those involved in fossil fuels and other environmentally problematic sectors – to account. Shareholders have a vital role to play here, and the churches, as significant investors, need to weigh their moral duties alongside their fiduciary duty to make satisfactory returns which can support the work of the church on the ground.

It is a shame that the debate about the responsibilities of shareholders has polarised into a defence of maximising interest on the one hand (on the grounds that this supports the church to act locally) and total disinvestment, or divestment, on the other. Fundamentally, this is a familiar theological dilemma about Christian ethics in a fallen world. Should we prioritise purity, or effective transformation, when it is impossible to have both? In expressing this dilemma, the environmental activists are, perhaps, the new Puritans, although the church investors should probably not be characterised as Cavaliers, for reasons that this issue of Crucible should demonstrate! Sadly, we see too little actual debate. Instead the problem is too often presented as a simple binary: hold on to your shares or be denounced as a climate denier. It is to break out of this sterile impasse that this issue of Crucible has been put together.

Here, three of those at the centre of the Church of England’s work on responsible and ethical investment set out their approach to maximising shareholder impact on corporate behaviours. The focus is on the Church of England because of its leading position as part of the Transition Pathway Initiative (of which more anon) and because its Ethical Investment Advisory Group (EIAG) is perhaps one of the most highly developed bodies approaching the field of ethical investment in a self-consciously theological way.

However, as the Chair of EIAG Barbara Ridpath notes, the EIAG includes representation from the Methodist Church which makes full use of the Group’s policy recommendations, so the ecumenism of the Anglican-Methodist Covenant has some practical pay-back here. Moreover, it is hard to avoid the public perception that the Church Commissioners are “rolling in money”, and that they are therefore the church shareholders with the greatest potential for leveraging their financial clout. And there is truth in this perception, although as Bess Joffe points out, the statutory commitment of the Commissioners is to invest their assets in order to generate revenue that supports the CofE’s commitment to parish ministry in every community. Whilst the Commissioners are a very significant investor, even in the Church of England they are not the only player, and the EIAG develops ethical guidance for all the National Investing Bodies (NIBs).

In the somewhat strident debate about investor responsibility in the context of the climate crisis, and more widely in terms of ethical and responsible investing, the Church of England has addressed the theological tension between purity and pragmatic transformation with a clear bias toward transformation – whilst keeping the option of divestment (purity) up its sleeve to be deployed when corporate resistance to change proves incorrigible. Nor is this just a theoretical possibility. As David Walker outlines, when engaging with extractive industries, resistance to shareholder pressure proved, in one case, so impenetrable that divestment by the Church of England followed – precipitating more widespread divestment from that company and, ultimately, a moderation of their environmentally and socially harmful practices.

The ability of a major shareholder like the Church of England to change the way corporations behave through judicious deployment of the power of their shareholding tends to be under-appreciated. Much engagement happens, of necessity, privately and away from the public or media gaze. This edition of Crucible helps to make the case for a pragmatic yet theological approach to transforming corporate behaviours, as a contribution to public debate about the tactics of combatting climate change.

However, the ethics of investment policy extend to many other morally problematic arenas, and the EIAG’s current work focusses on Big Tech and the power of the tech giants, through to the application of Artificial Intelligence, Machine Learning and so on, to do both public good, and also serious public harm. Whether the Big Tech industry is capable of transformation for good is a question that investors continue to grapple with. It surely needs more exploration in the future.

Malcolm Brown is the Director of Mission and Public Affairs for the Archbishops’ Council of the Church of England and a member of the Ethical Investment Advisory Group. He has guest-edited this edition of Crucible.

Notes

1.https://www.bbc.co.uk/news/science-environment-59016075 accessed 25 October 2021.