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Welby backs church’s carbon transition initiative, saying focus must be on outcomes

Archbishop of Canterbury was speaking at the London Stock Exchange

The Archbishop of Canterbury, Justin Welby, has called upon the Church of England’s engagement framework, the Transition Pathway Initiative (TPI), to ramp up its efforts in driving high emitting companies to transition to a low carbon economy, stating that it “must produce outcomes”.

He was speaking today at the London Stock Exchange at the launch of the TPI’s latest analysis of 105 of the world’s largest and highest emitting public companies across the coal mining, electricity, and oil and gas sectors.

Welby referred to the report’s findings – which found that most companies are still dragging their feet on climate change – as “a cause for great concern” and called upon the £7tn in assets behind the TPI to “flex its muscles ever more clearly and ever more powerfully” in driving companies to act.

The report The state of transition in the coal mining, electricity and oil and gas sectors: TPI’s latest assessment did, however, find some “measurable progress over the last 18 months”, with 17 companies moving up the framework towards greater “strategic assessment” of climate risk.

The Church of England’s Pension Board also announced plans to develop its own index informed by the TPI’s work, as it seeks to bring its “passive holdings into play in support of the low carbon transition”.

The news was announced by Alan Fletcher, Chair of the Church of England Pension Board Investment Committee.He said that “preliminary discussions” had already been held with FTSE Russell and the Grantham Research Institute at the London School of Economics – both of which are involved in the TPI.

Fletcher added that other pension funds are invited to collaborate on the development of the index and hoped that there would be much interest.

The Church of England Pensions Board currently has over £500m invested in passive equity indexes.

Fletcher also revealed that the TPI was used to inform its voting this proxy season, with a vote against the Chair of any company that were assessed as level 0 or 1 on the TPI Management Quality Assessment.

These announcements come ahead of the Church of England’s General Synod, or general meeting, later this week in York.

The Church’s National Investment Bodies (NIBs) will present a motion on Sunday seeking continued support from the Church’s council for their ethical investment policy – which was unanimously backed it in 2015 when it was first presented.

But the NIBs will face opposition in an amendment put forward by the Diocese of Oxford urging the them to “automatically” and “immediately” divest any fossil fuel company whose business plans are not aligned with the Paris Agreement by 2020. Both motions will be put to the vote at the meeting.

The TPI, developed in partnership with the UK’s Environment Agency Pension Fund and launched in 2017, itself grew out of a request from the 2015 Synod for the NIBs to create an “engagement framework” that assesses how companies are preparing for the transition to a low-carbon economy.