The Church of Scotland’s annual general assembly in Edinburgh has voted to divest companies whose major business depends on the extraction and sale of the “most unclean energy sources”.
It also agreed to ask its investor trustees to engage with firms to encourage them to move away from fossil fuels and to invest instead in renewables and a more sustainable future.
Its Church and Society Council, the body which engages on behalf of the Church on national, political and social issues, will report its findings to the General Assembly in 2018.
The session also approved a call on the Scottish and UK Governments and North Sea oil and gas companies to help speed the transition to a low carbon economy.
“The Church of Scotland will now engage with fossil fuel companies to help them to make the vital shift to renewable energies,” said Rev Sally Foster-Fulton, convener of the Church and Society Council.
“Companies who want to invest in that transition are ones we want to have our dealings with.”
She went on: “We have moral leverage and will be working with the Church Investors Group (CIG) which is an ecumenical venture on this issue so it won’t just be one denomination doing this, it will be a collaborative effort.”
The Church, the national church of Scotland, is known informally by its Scots language name, the Kirk. It comes as one of the Kirk’s partner in the CIG, the Church Commissioners for England, will see its climate change proposal at Exxon Mobil go to the vote today.
The Church of Scotland Investors Trust has assets of £383.5m (€503m). Its Growth fund is mainly invested in UK and overseas equities with Newton Investment Management. The Income Fund is in pooled funds with Royal London Asset Management.Meanwhile the Universities of Newcastle and Southampton in England have also joined the fossil fuel divestment push.
The former said it has responded to concerns raised by its own students and students from the Fossil Free movement and agreed to embed Environmental, Social and Governance (ESG) considerations into its investment strategy.
It said: “The Council’s decision will see Newcastle University procuring only those fund managers that are signed up to the United Nations Principles for Responsible Investment (UNPRI).” The university, in northeast England, currently has £60m of endowment funds managed by a number of external fund managers.
“We have moral leverage”
It will also give preference to investment managers who preferentially invest in progressive companies that are working towards low carbon solutions and who will provide the University with reports on the carbon footprint of companies within its portfolio.
As a consequence of this strategy, the University will aim to divest from thermal coal and oil/tar sand companies and other non-progressive oil and gas companies within five years.
Meanwhile, Southampton University has appointed Kames Capital as the new fund manager for its £11m endowment, with funds being invested in the Kames Ethical Cautious Managed Fund.
It said the selection process was particularly focused around finding an investment vehicle that would complement the University’s ethical considerations (with specific focus on direct investment in tobacco). The investment was previously held in the Lazards Charity Fund which closed last year.
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