THE Church Commissioners are actually able to take a position in defence firms in certain countries, after a policy change announced on Tuesday.
Previously, the Commissioners were barred from investing any of their £11.1-billion endowment in an organization that made greater than ten per cent of its global revenue from “strategic military sales”.
A press release on Tuesday said that the brand new policy allowed for a “more nuanced assessment of what firms actually do”, but emphasised: “The bar to investing in defence businesses will remain high.”
Companies that produce “controversial weapons”, similar to cluster munitions, chemical weapons, and anti-personnel mines, remain “strictly excluded” under the brand new policy, no matter where they’re based.
Companies based in “oppressive regimes” are also now completely excluded from potential investment, no matter the proportion of revenue that comes from arms sales.
The policy allows the Commissioners to take a position in UK-based firms that make nearly all of their revenue from selling military weapons systems, or small arms and ammunition for military and law enforcement.
It also allows firms involved within the production of nuclear weapons to be reclassified as “investible” case by case, provided they’re based in a NATO country, or Canada, Australia, or New Zealand.
The Commissioners’ social lead for responsible investment, Dan Neale, told the Church Times that this was not a “back-door route” to investment in nuclear weapons.
Rather, he said, the approach allowed the Commissioners to guage whether an organization with a “non-essential” involvement within the chain of supply, similar to making a small proportion of its revenue on non-essential equipment utilized in nuclear submarines, ought to be excluded from potential investment.
Tuesday’s statement said that the updated policy on defence investments “doesn’t represent a loosening of restrictions, but somewhat a sharpening of the standards we use to guage potential investments — the aim being to make sure a more rational, responsible approach aligned with our human-rights policy and focused on ethical business conduct”.
The recent approach, it said, “makes it harder to take a position in firms linked to oppressive regimes, while enabling responsible investment in NATO and UK defence related business”.
The Church Commissioners don’t publish an inventory of the countries that they classify as “oppressive regimes”, but define them as governments which are “significantly failing to guard and respect human rights”.
A spokesperson for the Commissioners wouldn’t confirm whether Israel was thought to be an “oppressive regime” for the needs of the policy.
Last month, the Archbishop of York branded Israel’s actions within the occupied West Bank “apartheid” and “ethnic cleansing”, and said that Israel had committed “genocidal acts” in Gaza (News, 21 November).
The Commissioners’ recent policy focuses on where an organization is domiciled somewhat than where it sells its wares. Mr Neale explained that where products were sold could be a consider decisions whether to take a position, but that it was inconceivable to design an automatic exclusion on this basis due to a scarcity of real-time data.
The most permissive approach applies to UK-based firms, and different rules apply to countries which are in NATO and the “Five Eyes” alliance of the UK, United States, Canada, Australia, and New Zealand.
More restrictions apply to firms based in countries outside these alliances, broadly in keeping with the previous policy of excluding firms that derived ten per cent of their revenue from defence sales.
The exception to it is a category “non-weapon-related products and/or services”, which could, for instance, include firms that provide catering at army bases.
The Commissioners’ recent policy follows the publication last week of updated advice from the Ethical Investment Advisory Group, which provides guidance to the Church of England’s National Investment Bodies (NIBs).
The other foremost NIB, the Church of England Pensions Board, had not, by Thursday, released an updated policy.
