homeWorld

Church investors threaten to take harder line on UK companies that fail to promote gender diversity

(Wikimedia Commons/Kai Hendry)The Canterbury Cathedral is featured in this image.

The Church Investors Group (CIG), which backs investment policies based on Christian ethical principles, has threatened to cut ties with British companies that fail to tackle issues such as excessive executive pay, climate change or gender diversity.

According to The Guardian, the CIG, which has 61 members with a combined investment of about £17 billion (US$23 billion), has written to companies listed on the FTSE 350 index that it will not support the re-election of directors at firms failing to make sufficient progress in key areas.

"The best companies contribute to the common good through their products and services and the way they treat their employees," said the Rev. Canon Edward Carter, chair of the CIG.

"Their directors understand that if they are not doing something about fairness and about the risks facing us today, they are part of the problem and risk losing the confidence of the public and ultimately their licence to operate," he added.

The group, which represents a number of organizations including the investing bodies of the Church of England and Methodist Church, has said that it will now implement a more stringent voting policy on three issues, including executive pay.

It threatens to "withdraw support" for remuneration reports if the company fails to disclose pay ratios, if chief executive pensions are deemed "excessive" or if financial services or pharmaceutical firms fail to pay the living wage.

The Independent reported that the CIG also threatened to vote against the re-election of the nomination of committee chair if women make up less than 33 percent of a company's board, and it will go on to vote against all directors on the nomination committee where women make up less than a quarter of top-tier bosses.

Latest figures released by the government-backed Hampton-Alexander review has indicated that there were 301 firms in the FTSE 350 at the end of June 2017 where the proportion of women on the board was less than 33 percent. A total of 170 firms have reportedly failed CIG's test of having female board members equivalent to less than 25 percent.

Additionally, the group also expressed plans to oppose the re-election of a company's chair if the firm is believed to be making "little progress to transition to a low carbon world," based on scores from the Transition Pathway Initiative, a project launched by the Church of England.

In 2015, the Church of England had drawn media attention after it formed a new climate change policy and vowed that it will no longer make any direct investments in companies that generate more than 10 percent of their revenue from extracting thermal coal or producing oil from tar sands.

The Church also threatened to pull investment from mining companies last year over their failure to "uphold high standards," saying the industry is "particularly vulnerable" to poor governance.

Go to the Home Page

Top News

Inside Christian Times