• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

  • 1982340.86ppm

  • 1983342.53ppm

  • 1984344.07ppm

  • 1985345.54ppm

  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

  • 1993356.83ppm

  • 1994358.33ppm

  • 1995360.18ppm

  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

  • 2002372.59ppm

  • 2003375.14ppm

  • 2004376.96ppm

  • 2005378.97ppm

  • 2006381.13ppm

  • 2007382.9ppm

  • 2008385.01ppm

  • 2009386.5ppm

  • 2010388.76ppm

  • 2011390.63ppm

  • 2012392.65ppm

  • 2013395.39ppm

  • 2014397.34ppm

  • 2015399.65ppm

  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

Laura Hillis, director for climate and environment at the CofE Pensions Board
News & Views

Laura Hillis: How the church faced the ‘ultimate escalation’ of oil and gas divestment

CofE Pensions’ Laura Hillis speaks to Net Zero Investor on the future of engagement following the board’s decision to divest from oil and gas.

Content Tags: Pensions  Engagement  Paris Alignment  UK 

Before divesting from oil and gas, the Church of England (CofE) Pensions Board went above and beyond in its engagement with such firms, going so far as to act as co-lead when working with Shell on decarbonisation as part of the Climate Action 100+ initiative.

There had been initial signs of progress at firms such as Shell. Yet at the end of an engagement process which begun in 2019, there was backtracking on climate commitments at major corporates in the sector and the CofE Board went to a position of last resort; divestment from all oil and gas holdings.

“For an oil and gas company to remain investable over the five years, they needed to pass particular hurdles and achieve particular milestones in their climate action, with the final hurdle coming this year.

“In terms of what worked in the process, it was very good practice having a sufficient amount of time set with very clearly defined benchmarks, and when companies don't hit those targets divestment being the ultimate escalation”, explained Laura Hillis, director for climate and environment at the CofE Pensions Board.

The Transition Pathway Initiative (TPI) has played a crucial role in this in process, Hillis said. Founded in 2017, the TPI is an asset-owner led initiative which assesses company preparedness for the climate transition, until very recently led by Adam Matthews, chief responsible investment officer at the CofE Pensions Board.

Could anything have been done differently with the Church’s oil and gas engagement? “We could have encouraged adoption of a systemic approach sooner. This would have seen a greater focus on engagement with asset managers, the oil and gas value chain including companies on the demand-side, and policymakers about the phase out and transition pathways for the industry”, Hillis said.

The most recent AGM season also showed a growing divergence between asset owners and the asset managers who represent them, with the institutional side pushing for greater backing of climate resolutions.

Hillis emphasised that the CofE keeps a close eye on this issue: “We have an escalation framework as it pertains to our investments, but we also have one associated with our asset managers. If there is persistent misalignment, and we're not able to resolve those issues with an asset manager on ESG or climate topics, then ultimately the way to resolve that is to terminate the mandate. I suspect we're not the only asset owners out there that are thinking this way.”

She anticipated greater breaks between asset owner and manager in the lead up to the next AGM season over this issue, even if such activity and reasoning behind reallocations is not made public.

Impact of divestment

There is also the issue of where shares will go after divestment, with the CofE Pension Board divesting entirely from oil and gas, and other climate conscious asset owners such as Dutch fund PGGM looking to take the same path.

According to Hillis: “There are loads of asset owners who are effectively universal owners, and a lot of these will be swallowing the stranded assets from the fossil fuel sector.

“These pension funds have great opportunities to step up. Such funds do tend to have a longer term view, and there's great opportunities for them to do more.”

A key question going forward will be whether such asset owners will take up the same resource intensive position on engagement with oil and gas as was seen by the likes of the CofE Pensions Board, Hillis raised. 


In terms of what worked in the [engagement] process, it was very good practice having a sufficient amount of time set with very clearly defined benchmarks, and when companies don't hit those targets divestment being the ultimate escalation.

Laura Hillis, CofE Pension Board

Evolving engagement strategy

The CofE Pension Fund is now considering next steps for an engagement policy shorn of its oil and gas obligations. For Hillis,  the answer is to look to the sectors consuming the largest amount of fossil fuels, namely energy infrastructure and transportation.

Consequently, the pension fund has first opposed and then backed the board of the National Grid, and stood up to Volkswagen over climate concerns.

“We are looking at various assets to see where we can drive the most change. This includes a drive to diminish the demand for energy sources such as thermal coal, oil and gas.”, said Hillis.

On top of VW and the National Grid, CofE Pension is engaging with Renault, BMW, Mercedes, and mining firm Anglo American, and is expected to publish a full list of 40 companies it will be entering into long term engagement with in the coming weeks.

There is also the increasingly important matter of policy lobbying, with a key reason for the CofE fund voting against VW’s board being a push for the automaker to provide public disclosure on its lobbying activities regarding climate change policy. More widely the fund is looking at automaker’s positions on electrification legislation.

“We've been focused on this issue of climate lobbying for a really long time, largely to create transparency. It is really one of those topics that doesn't get a lot of disclosure, on what a particular company's policy positions on a topic might be, the meetings that they're having with policymakers, or the industry associations they are a member of. Plus, there's political donations as well and membership fees paid to different lobbying groups”, said Hillis.

As part of this push, CofE Pension has been involved in the creation of The Global Standard on Responsible Climate Lobbying, which looks to help companies and investors to ensure that all lobbying efforts are directed towards the attainment of the Paris Agreement goals, rather than working against them.

Emerging markets

Another key concern is how to get institutional funds shifting capital towards the climate transition sought in emerging markets.

However, moving finance towards emerging market opportunities could lead to a swathe of ESG concerns, she acknowleged. For instance in South Africa, there are drives for funding to move the nation off its dependence on coal, with a 2022 report from the Boston Consulting Group showcasing the country’s huge potential for wind and solar power. Yet the nation is also beset by endemic corruption, and criminal conspiracy to keep the energy mix dependent on coal, roadblocks to the $320 billion that would need to spent to decarbonise South Africa’s economy.

“The challenge of the century is figuring out how we finance the transition, within emerging markets in particular.

“There are significant ESG risks here. You might be looking at an investment in a country that has real corruption issues, or possibly significant human rights issues, or gender issues with a company that has only men on their board. You have got to figure out where the balance is, and see if you can drive change as well for some of those topics that aren't climate related”, said Hillis.

Content Tags: Pensions  Engagement  Paris Alignment  UK 

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