The Methodist Church has just announced that it is aiming to reduce the carbon footprint of its investment portfolios with a new investment policy on climate change ahead of Copenhagen Summit. This is great news but it will have its work cut out for it.
This is something Ekklesia has been encouraging the Church of England to do to too. However, in the response the C of E has said that it has to maintain a balanced portfolio of including substantial investments in oil and mining companies.
It is true that the C of E has, according to its last annual report, now finally started to invest a little of its money in some green projects. However, the stated approach is distinctly different.
The Central Finance Board of the Methodist Church seems to have a more integrated approach with the stated aim of: “Being a Christian witness in the investment community”. The Commissioners of the Church of England by way of contrast state that their investments are about “funding the church’s mission” rather than being part of the church’s mission itself.
However, despite this difference, at present many of the same shares in companies which are fuelling climate change turn up in their investment portfolios. The crucial question is what the Methodist Church now intends to do with these substantial shareholdings. Here's a quick overview of some of them:
Mining is one of the most polluting industries in the world. It has a disproportionately negative impact on marine-dependent and land-based communities, especially indigenous peoples, and is frequently associated with forced evictions, militarisation, conflict and human rights abuses including extra-judicial killings.
Both the Church of England and the Methodist Church hold shares in mining companies Anglo American, BHP Billiton and Rio Tinto, despite the fact that the Catholic aid agency CAFOD, War on Want, Anglican bishops and the Catholic Bishops’ Conference of the Philippines amongst others have previously condemned the companies for their actions.
BHP Billiton in particular has faced allegations of human rights abuses and widespread environmental destruction. Campaigners (The London Mining Network) recently published an ‘alternative report’ into its activities. It outlined the negative impact of many of the company’s operations – in Australia, West Papua, Papua New Guinea, the Philippines, South Africa, Canada, Colombia and Chile.
The report involved the work of organisations from many countries working with directly impacted communities, including church groups. It catalogued abuses of human rights, particularly of affected communities, issues of worker health and safety, livelihood and food security, and environmental problems. It also raises issues around climate change and BHP Billiton’s commitment to increased extraction and promotion of both coal and uranium for power production.
Over 20% of the Methodist Church's portfolio of shares is invested in oil and gas companies. The two biggest shareholding of the Church of England are also in oil companies.
The big one they have in common is Royal Dutch Shell. A new Amnesty International report recently highlighted how the comany was responsible for bringing impoverishment, conflict, human rights abuses and despair to the majority of the people in the oil-producing areas of the Niger Delta - one of the world’s 10 most important wetland and coastal marine ecosystems and is home to some 31 million people.
Oil has generated an estimated US$600 billion since the 1960s. Despite this, many people in the oil-producing areas have only polluted water for drinking, cooking and washing and have to eat fish contaminated with oil and other toxins. Oil pollution kills fish, their food sources and fish larvae and damages the ability of fish to reproduce, causing both immediate damage and long-term harm to fish stocks. Oil pollution also damages fishing equipment.
Oil spills and waste dumping have also seriously damaged agricultural land. Long-term effects include damage to soil fertility and agricultural productivity, which in some cases can last for decades. In numerous cases, these long-term effects have undermined a family’s only source of livelihood.
The Guardian newspaper revealed that Exxon Mobil, in which the Church of England has a shareholding valued at £17.2 million (but the Methodist Church doesn't invest) is continuing to fund lobby groups which question the reality of global warming, despite a public pledge to cut support for such climate change denial.
In the context of climate change, banks have also recently come under the spotlight - in particular the Royal Bank of Scotland (RBS) in which both the Church of England and Methodist Church have shareholdings.
Forty leading figures, representing faith groups and church leaders, environmental and anti-poverty campaigners, trade unions, academics, MPs, the author Iain Banks and Body Shop co-founder Gordon Roddick last weekend wrote to Alistair Darling to call on him to transform RBS (Royal Bank of Scotland) into a Royal Bank of Sustainability, now the Government had control of the bank.
Neither the Methodist Church nor the C of E were represented amongst the signatories to the letter. But Church of Scotland convenor, the Rev Ian Galloway and Miles Litvinoff of the Ecumenical Council for Corporate Responsibility, were among the public figures who accused Westminster of “writing a blank cheque with taxpayers’ money” to fund “destructive” projects round the world, contributing to human rights abuses and climate change
A year ago, the British public became the majority shareholder in the Royal Bank of Scotland after the Government bailed the bank out. The group have asked the Treasury to ensure that RBS and other publicly-backed banks now help pay for Britain's transition from a high-carbon economy with rising unemployment to a low carbon-society that provides millions of green jobs and better public services.
In the strongly worded letter, the group accused the Treasury of failing to stop taxpayers' money being used by RBS to finance climate change and human rights abuses that span the globe from Wales to India, to the Democratic Republic of Congo.
The campaigners cite evidence from Bangladesh where a RBS subsidiary, ABN Amro Bank NV has a 4.75 per cent share of GCM Resources, the UK company pushing for an opencast mine in the country. There has been fervent local opposition as it would displace approximately 40,000 people and impact on access to clean water for approximately 100,000 people
Closer to home, RBS has taken part in loaning £115 million to Hargreaves Services, the coal operator. Hargreaves has plans to extract 7 million tonnes of coal by developing one of the largest opencast coal mines in the country at Tower Colliery, near the coal-mine-cum-protest-site Ffos-y-fran in Merthyr Tydfil, south Wales. This type of mining has been likened to a financial hit-and-run, bringing a few jobs for a couple of years but potentially leaving widespread asthma and other public health and environmental effects in the community for years to come.
The World Development Movement also drew attention to the activities of Vedanta mining in India, in which the Church of England also has a direct £2.5 milion stake. RBS was the lead financial adviser to Sterlite, which is 60 per cent owned by Vedanta, after a recent takeover bid. The bank and its ABN Amro subsidiary gave letters of credit worth $100m (£60m) to Sterlite, which is India's biggest copper producer. Vedanta has an appalling record on human rights, say campaigners.
Research from the Rainforest Action Network indicates that since Oct 13, 2008 - when HM Treasury announced its recapitalisation of the Royal Bank of Scotland Group - RBS has extended at least $2.7 billion in debt/equity issuance underwritings to companies that own or are actively involved in building tar sands extraction infrastructure and tar sands oil pipelines in Alberta, Canada.
In March 2009, RBS was also part of a consortium of 14 banks that lent $1,890 million to the Irish company Tullow Oil - providing in the region of $100 million itself. The bank had already helped to raise £402 million by placing shares for Tullow in January 2009. In early 2009, the company announced a major discovery of 400-1000 million barrels by Lake Albert in Uganda, just on the border with the Democratic Republic of Congo (DRC). Tullow also holds oil exploration rights across the border in North Kivu in the DRC, which continues to be torn by strife after more than a decade of resource-driven civil war. The border area has seen some of the fiercest fighting take place as rival armies and militias have struggled for control. An additional 30,000 refugees were displaced in North Kivu during two weeks of fighting in March, adding to the existing 1.4 million internally displaced people in the region.
So the Methodist Church has its work cut out for it, and is going to need to do some serious reorganisation of its investment portfolio to achieve its aims. But at least it has now made a commitment in the right direction. Let's hope that the Church of England follows suit soon.