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The Archbishop of Canterbury has criticised the investment industry
for inaction over the climate crisis and called on fund managers to push
companies to reduce their impact on the environment.
Justin Welby
said fund managers had "not sufficiently stepped up to the plate" to
use their ownership of companies to press for change. He said investors
should tell firms to help meet targets set by the Paris climate
agreement.
Welby said: "The situation we find ourselves in has
rightly been called a climate emergency. We know it's unquestionable
that investors acting together can influence outcomes on everything,
including climate change.
"It is in investors' power to help avert
the disastrous consequences - ethical and financial - of failing to
achieve the Paris goals."
Welby's words are his most direct
criticism of the fund management industry over the climate emergency. He
has argued before that concern over global heating would shake up
investment and has encouraged investors to drive change.
He made
his latest comments in support of a Global Ethical Finance Initiative
summit next month in Edinburgh on how to make finance work better for
people and the planet.
Welby said: "Money is not morally neutral -
it can do harm and it can do good. At the very least it is the
responsibility of investors to take account of environmental, social and
governance factors in their investment decisions and in their
stewardship of their assets."
Oil companies, miners, airlines and
carmakers are among companies facing increasing criticism over their
responsibility for carbon emissions that contribute to global heating.
The biggest companies in the US recently conceded they should take
responsibility for the environment, worker welfare and ethical dealing
as well as making money.
The archbishop said funds that track
indexes such as the FTSE 100 rather than picking individual shares
needed to exert more pressure on companies over the climate crisis.
Welby
said: "Passive investment … may be the right investment solution for
many, but passive stewardship is the answer for no one. All investors
can make a difference by engaging and voting determinably in support of
the Paris agreement."
BlackRock, the world's biggest asset
management company, has defended its lack of action on the climate
emergency by saying most of its funds invest in indexes. BlackRock has
lost an estimated $90bn (£73bn) over the past decade by ignoring the
financial risk of investing in fossil fuel companies, according to a
recent report.
The archbishop, a former oil industry executive,
has said the Church of England was late in switching its own investments
away from companies that damage the climate. In its latest move the
church voted last year to withdraw investment from companies that do not
meet the terms of the Paris agreement by 2023.
