The Central Finance Board of the Methodist Church (CFB) has sold investments worth over £17m in two major oil companies due to climate change concerns.
The divestment of just over £15m in BP and just over £2m in Total was the result of CFB’s new analysis of 15 oil companies.
The investment team looked at up to 25 different metrics to assess companies’ current activities, future investment plans, strategy and governance, contributions to a positive transition, and their track records and targets related to reducing carbon emissions. Companies were given a “traffic light” rating.
“While BP has recently made a new commitment to reduce Scope 3 carbon emissions by 2050, it has yet to provide details of how this commitment would be met. Total has since made a new emissions commitment,” CFB said in a statement.
“However, both companies rated amber in the assessment, partly due to their current output and the carbon emissions assessment. ARC Resources, a small holding in the CFB Overseas Fund, was also sold.”
The new analysis was prompted by a request from the Methodist Conference. The Joint Advisory Committee on the Ethics of Investment (JACEI) was asked to look at the extent to which the business investment plans of oil and gas companies were aligned with the Paris Agreement to keep temperature rises below 2°C.
JACEI advises the CFB on ethical investment matters, and will report to the Methodist Conference this year. CFB said that the JACEI report endorses its own analysis.
The move takes the number of oil companies which the CFB excludes from investment to 10 (ARC Resources, BP, Chevron, Conoco Philips, EOG Resources, Exxon Mobil, Gazprom, Hess, Total and Woodside).
However, the sale does not represent a total divestment from the sector, as it still holds four oil companies – ENI, Equinor, Repsol and Royal Dutch Shell.
JACEI has advised the CFB that these four firms have made commitments that implied they were aligned, or close to being aligned, with the Paris Agreement.
It advised CFB to engage more with these firms, and will review their progress in the coming weeks.
The Central Finance Board (CFB) provides investment services to the Methodist Church. A professional investment team manages a range of funds in support of an ethical stance in accordance with the aims of the Methodist Church.
Combined with Epworth Investment Management Limited, its wholly-owned subsidiary which provides investment services to other churches and charities, CFB has assets under management of approximately £1.2bn.