THE Church Commissioners are actually able to speculate in defence corporations 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”.
An announcement on Tuesday said that the brand new policy allowed for a “more nuanced assessment of what corporations actually do”, but emphasised: “The bar to investing in defence businesses will remain high.”
Companies that produce “controversial weapons”, equivalent 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 speculate in UK-based corporations that make the vast majority of their revenue from selling military weapons systems, or small arms and ammunition for military and law enforcement.
It also allows corporations 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 evaluate whether an organization with a “non-essential” involvement within the chain of supply, equivalent 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 reasonably a sharpening of the standards we use to judge 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 speculate in corporations 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 considered 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 reasonably than where it sells its wares. Mr Neale explained that where products were sold can be a think about decisions whether to speculate, but that it was not possible to design an automatic exclusion on this basis due to a scarcity of real-time data.
The most permissive approach applies to UK-based corporations, 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 corporations based in countries outside these alliances, broadly according to the previous policy of excluding corporations that derived ten per cent of their revenue from defence sales.
The exception to this can be a category “non-weapon-related products and/or services”, which could, for instance, include corporations 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 essential NIB, the Church of England Pensions Board, had not, by Thursday, released an updated policy.
