The Church Commissioners and The Church of England Pensions Board have today announced the £12million divestment from thermal coal and tar sands.

From today neither body, nor the CBF Church of England funds, will make any direct investments in any company where more than 10% of its revenues are derived from the extraction of thermal coal or the production of oil from tar sands.

This announcement coincides with the adoption of a new climate change policy recommended by the Church’s Ethical Investment Advisory Group (EIAG) that sets out how the three national investing bodies (NIBs) will support the transition to a low carbon economy.

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Raghuram Rajan got it started. On Jan. 15, the governor of the Reserve Bank of India jolted traders on Mumbai’s Dalal Street by cutting interest rates. The surprise was the timing of the announcement: Rajan wasn’t supposed to deliver a policy statement for another 19 days.

The weirdness continued that same day””in Switzerland, of all places. For three years, the Swiss National Bank had steadily bought euros on currency markets to keep the country’s franc from surging in value relative to the euro, and thereby choking off growth. Unorthodox, yes; but global financial markets had grown accustomed to the regular renewal of the bank’s stance. Without warning, however, the Swiss cut the franc’s tether. Swiss National Bank chairman Thomas Jordan also set the benchmark Swiss lending rate at negative 0.75%. In theory, a lower rate should put downward pressure on the franc; not enough in this case, as the franc’s value shot up by 18% in the days that followed. Many hedge funds bled red.

And on it went. The Danes cut interest rates four times in the span of a few weeks. As this issue of the magazine neared deadline, China’s central bank cut rates by a quarter of a percentage point and Poland slashed them by a half point. In the first 60 days of 2015, some 20 central banks had executed stimulus measures.

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One of the U.K.’s most visible ethical investors ”“ the Church of England ”“ outperformed its investing benchmarks last year thanks in part to its significant underweight position in energy stocks, a trade that benefited from the precipitous fall in oil prices.

Its fund, the CCLA, with around £5.6 billion ($8.34 billion) under management as of Feb. 2015, runs assets on behalf of the Church of England, as well as charities and local government authorities. The firm has long taken an ethical and activist stance, recently encouraging Royal Dutch Shell PLC, for example, to put forward a shareholder resolution on Climate Change at its 2015 Annual General Meeting.

Thanks to its ethical bearings, the CCLA allocated 50% less to oil and gas stocks than its benchmarks across its equity funds over 2014, and has avoided exposure to pure play coal and tar sands stocks, according to Michael Quicke, chief executive of the CCLA.

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Rarely have investors lavished so much attention on a single word. After a two-day meeting, the Federal Reserve dropped the word “patient” from its monetary-policy statement. Why the fuss over this single word?

“Patient”, in Fed-speak, indicates that it will hold off increasing interest rates for at least two meetings. Now the word has been ditched, at subsequent meetings (most probably in June) we could see rates move off from rock-bottom for the first time since 2008.

The last rate-tightening cycle began over a decade ago. The Fed feels comfortable, it seems, with raising interest rates now that unemployment has moved towards 5.5%. The latest forecasts from the Fed show that it expects the economy to expand by 2.3%-2.7%, a slight fall from the projections in December but still one of the strongest in the OECD, a club of mostly rich countries.

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hina’s economy is slowing. Brazil is struggling as commodity prices plunge. Russia, facing Western sanctions and weak oil revenue, is headed into a recession.

As other big developing markets stumble, India is emerging as one of the few hopes for global growth.

The stock market and rupee are surging. Multinational companies are looking to expand their Indian operations or start new ones. The growth in India’s economy, long a laggard, just matched China’s pace in recent months.

India is riding high on the early success of Prime Minister Narendra Modi and a raft of new business-friendly policies instituted in his first eight months.

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The Conservative party and HSBC are not the only organisations wondering about possible reputational damage from an association with Stephen Green. For the Church of England, whose General Synod met in London this week, he has become a cause of controversy.

Lord Green, an ordained Anglican priest, chaired a report on leadership training for senior clergy that has proved unpopular with some church members, who voiced their concerns at the synod.

“Talent Management for Future Leaders and Leadership Development for Bishops and Deans: A New Approach”, published late last year, has been criticised for its heavily corporate language and for failing to include ordained women or theology academics on its 12-strong panel.

Canon Giles Fraser, priest-in-charge at St Mary’s, Newington, south London, called the report “theologically inept and an insult to the way I work as a parish priest”.

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Big UK firms face a “crisis of trust” and the next government must prioritise better ethics, a lobby group has said.

In a survey, the Forum of Private Business (FPB) found that over three-quarters of respondents think big firms put profits before ethical standards.

Tax avoidance, treatment of suppliers, and late payment were all areas of concern, the ComRes poll of 2,000 people found.

Politicians must stand up for people who play by the rules, the FPB said.

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The Environment Agency’s pension fund has urged BP and Royal Dutch Shell to invest in renewable energy and do more to tackle climate change.

The government-backed agency’s £2.5bn fund has teamed up with more than 150 other investors, including the Church of England and several large local authority pension funds. They have filed shareholder resolutions urging both oil companies to take more action on global warming.

“It was an easy decision,” said John Varley, chairman of the Environment Agency pensions committee. “We believe that it is vital to manage climate risk within investments and that all shareholders have access to clear information to assess how these companies are managing risk and protecting shareholder value.”

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The Swiss National Bank’s shock move today to stop intervening in the foreign exchange market all but guarantees the European Central Bank will finally introduce quantitative easing when it meets Jan. 22. Switzerland is surrendering before a wave of post-QE money fleeing the euro threatens to make a mockery of its currency policy. It’s also capitulating as slumping oil brings global deflation ever closer.

t’s an astonishing U-turn. Just two days ago SNB Vice President Jean-Pierre Danthine told Swiss broadcaster RTS that “we’re convinced that the cap on the franc must remain the pillar of our monetary policy.” He added, though, that it was “very possible” that QE would make defending the threshold more difficult. It seems highly probable that the ECB has winked about its policy intentions to its Swiss counterparts.

The ensuing whipsaw in the currency market is unprecedented. The franc immediately appreciated almost 30 percent against the currencies of the Group of Ten industrialized nations, and surged to a record against the euro…:

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A standing joke in Silicon Valley is that the smartest people go into online advertising, virtual currency, or dumb online games. And you surely have to wonder what has gone wrong when the industry’s heavy hitters and venture capitalists provide $1.5 million to seed a useless app such as Yo.

Fortunately, there are many tech start-ups that are solving real problems ”” and many entrepreneurs who care. The venture capital community is also beginning to see the light. Witness the recent decision of Google Ventures to back away from consumer Internet start-ups and focus more on health care and life-sciences companies, and Y Combinator, the most powerful start-up accelerator in the world, backing seven nonprofits in its latest class.

There is surely hope for tech. Here are seven companies that stand out….

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The Church of England said it was in the process of filing shareholder resolutions on climate change at BP Plc and Royal Dutch Shell Plc.

“The resolution is intended to challenge the companies to run their businesses so that they participate constructively in the transition to a low carbon economy”, The Church of England wrote in a blog. (bit.ly/1tUBUlN)

The Church said it chose BP and Shell because they have the biggest carbon footprints of all the companies listed on the London Stock Exchange.

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Investors’ long-term success may increasingly depend not just on the narrow financial performance of the companies whose shares they buy, but on how well they manage the ethical questions that will ultimately shape the outcomes for those companies.

While many asset owners look on responsible investing as an ethical obligation, the growing consensus is that it is also good business.

This view casts responsibility as a question of risk management. If you invest only in businesses with good human rights practices, engagement with local communities, clear accountability through the supply chain and clarity about exposure to resource scarcity, you are less likely to be caught out by an unforeseen problem such as protests over water rights or litigation following an oil spill, such as BP’s Deepwater Horizon debacle in the Gulf of Mexico.

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The world economy is not in good shape. The news from America and Britain has been reasonably positive, but Japan’s economy is struggling and China’s growth is now slower than at any time since 2009. Unpredictable dangers abound, particularly from the Ebola epidemic, which has killed thousands in West Africa and jangled nerves far beyond. But the biggest economic threat, by far, comes from continental Europe.

Now that German growth has stumbled, the euro area is on the verge of tipping into its third recession in six years. Its leaders have squandered two years of respite, granted by the pledge of Mario Draghi, the European Central Bank’s president, to do “whatever it takes” to save the single currency. The French and the Italians have dodged structural reforms, while the Germans have insisted on too much austerity. Prices are falling in eight European countries. The zone’s overall inflation rate has slipped to 0.3% and may well go into outright decline next year. A region that makes up almost a fifth of world output is marching towards stagnation and deflation.

Optimists, both inside and outside Europe, often cite the example of Japan. It fell into deflation in the late-1990s, with unpleasant but not apocalyptic consequences for both itself and the world economy. But the euro zone poses far greater risks. Unlike Japan, the euro zone is not an isolated case: from China to America inflation is worryingly low, and slipping.

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Around 30 cities and counties internationally have made similar commitments, including Seattle, Dunedin, and Oxford. The announcement also comes hot on the heels of similar divestment commitments made by Local Government Super and the Anglican Diocese of Perth.

The decision affects millions of dollars in council investments – a May report showed the council had cash and investments of 36 million dollars. Moreland’s principal bank is the Commonwealth Bank, which like each of the ‘Big 4’ is a major lender to fossil fuel projects around the country, including controversial coal projects on the east coast.

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The court, now entering its second decade under Mr Justice Brian McGovern, has shone a light into some dark recesses of Ireland’s financial and business world, exposing greed and human misery on a grand scale alongside some shoddy and dubious, accounting, auditing, banking, business, legal, regulatory and stockbroking practices.

It has heard of property and other deals involving misappropriation, forged signatures, deceit, lies and secret profits; suspect property and money transfers aimed at avoiding repayment; exorbitant expenses for senior bankers; and slipshod and questionable loans, investments and valuations.

It has also shown existing laws provide limited opportunity to penalise some of these practices and revealed gaps in legislation on corporate crime, including the absence of an offence of reckless lending.

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The Church of England is one of 12 global institutional investors backing a new project to study how climate change will impact the investment landscape.

The Church’s Ethical Investment Advisory Group and the three national investing bodies are supporting the project as part of a group concerned about climate change and its investment implications.

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As usual with Facebook, this is not the whole story. For one, it has begun tracking users’ browsing history to identify their interests better. Its latest mobile app can identify songs and films playing nearby, nudging users to write about them. It has acquired the Moves app, which does something similar with physical activity, using sensors to recognise whether users are walking, driving or cycling.

Still, if Facebook is so quick to embrace ”“ and profit from ”“ the language of privacy, should privacy advocates not fear they are the latest group to be “disrupted”? Yes, they should: as Facebook’s modus operandi mutates, their vocabulary ceases to match the magnitude of the task at hand. Fortunately, the “happiness” experiment also shows us where the true dangers lie.

For example, many commentators have attacked Facebook’s experiment for making some users feel sadder; yet the company’s happiness fetish is just as troubling. Facebook’s “obligation to be happy” is the converse of the “right to be forgotten” that Google was accused of trampling over. Both rely on filters. But, while Google has begun to hide negative results because it has been told to do so by European authorities, Facebook hides negative results because it is good for business. Yet since unhappy people make the best dissidents in most dystopian novels, should we not also be concerned with all those happy, all too happy, users?

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The Church of England’s prolonged struggle to sell its stake in Wonga, the payday lender, illustrates the problems that investors can encounter when they lock up their capital in illiquid private vehicles instead of buying publicly traded securities that offer a straightforward exit.

However, buying and selling positions in existing private equity funds in the secondary market is becoming increasingly popular, attracting growing interest from institutional investors.

Ardian, a Paris-based manager, raised $9bn earlier this year to create the largest private equity secondary market fund to date while Lexington Capital Partners is looking to raise $8bn to $10bn for its latest secondary vehicle.

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The Church Commissioners for England are pleased to announce that their indirect investment exposure to Wonga in their venture capital portfolio has been removed. The Church Commissioners no longer have any financial or any other interest in Wonga.

The terms ensure that the Church Commissioners have not made any profit from their investment exposure to Wonga.

At no time have the Commissioners invested directly in Wonga or in other pay day lenders. The indirect exposure of the Commissioners through pooled funds represented considerably less than 0.01% of the value of Wonga.

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The Church, which invests in Wonga, is currently facing an ungodly dilemma of its own making.

Previously Most Rev Welby had made it clear that he believed that payday lenders should be put out of business. Entirely.

But, oops, this was before he was informed that the CoE’s financial wing had sunk something in the region of £100,000 into the company.

Following criticism of this odd state of affairs, the Church’s Ethical Investment Advisory Group launched a review. (Although you would think that “Church investing in Wonga” would fairly obviously constitute an ethical no-no.)

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Why are people dishonest? From Main Street to Wall Street, at home and at work, questionable behavior defies people’s best intentions. Now experts in the social sciences are examining why people so often behave contrary to their own ethical aims and what can be done about it, especially in the world of business. “What we find is that when people are thinking about honesty versus dishonesty,” says Dan Ariely, a professor of behavioral economics at the Duke University Fuqua School of Business, “it’s all about being able, at the moment, to rationalize something and make yourself think that this is actually okay.”

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The EIAG also announced that during 2013 it instructed votes for the Church Commissioners and Church of England Pensions Board on over 30,000 resolutions at approximately 3,000 company general meetings. Reflecting wider concern over executive remuneration packages, the EIAG withheld support in over 70% of cases.

In wider corporate engagement, church investors recorded important successes in the areas of both alcohol and pornography. After engagement with the EIAG, all three major UK-listed supermarkets – Tesco, Sainsbury’s and Morrisons – published alcohol policies newly acknowledging the potential for alcohol to cause harm. In the area of pornography, church investor engagement with a major telecommunications company led to the company ceasing to promote pornographic material on its handsets in the UK.

The threshold reduction follows a review requested by the Archbishop of Canterbury in light of the “Wonga controversy.” As a consequence of the review process revenue thresholds used to exclude companies on account of their involvement in tobacco, gambling, high interest rate lending and human embryonic cloning have been capped at 10% from the previous threshold of 25%.

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In a speech in Westminster, Welby pointed out that loan sharks sometimes turn up with baseball bats if customers do not pay. It now turns out that Wonga sends out menacing letters from non-existent solicitors if its customers miss their repayments.

And, herein lies the problem for the Church of England. Its Church Commissioners arm has a £100,000 stake in Wonga ”“ albeit less than it was but a stake nonetheless, held through the Accel Partners investment vehicle which backed one of the payday lenders’ funding rounds.

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After passionate debate over how best to help break the deadlock between Israel and the Palestinians, the Presbyterian Church (U.S.A.) voted on Friday at its general convention to divest from three companies that it says supply Israel with equipment used in the occupation of Palestinian territory.

The vote, by a count of 310 to 303, was watched closely in Washington and Jerusalem and by Palestinians as a sign of momentum for a movement to pressure Israel to stop building settlements in the West Bank and East Jerusalem and end the occupation, with a campaign known as B.D.S., for Boycotts, Divestments and Sanctions.

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Clemens Fuest, from the Mannheim-based organization best known for its widely-watched economic sentiment index – told German business daily Handelsblatt that the euro zone region could be at a “turning point.”

“I’ve got a bad feeling about this…I am concerned by the danger that the ECB is producing new bubbles with its policy of cheap money,” he told the newspaper.

“We have all the ingredients of a bubble: The prices of real estate and stock markets continue to rise, and on the bond markets, yields are falling despite high risks.”

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The bond markets have grasped something that continues to elude many economists. We live in a confused world. Yet the underlying story is simple. The US middle continues to hollow out, even as the economy continues to grow.

But the latter’s upside is limited by the crisis in the former. Unless the middle class starts to post healthy income gains, we will be stuck in what has been annoyingly named the “new normal”.

Neither the Democratic nor the Republican party ”“ nor most of their European counterparts ”“ appears to have an answer. President Barack Obama pushes for a higher minimum wage, which would certainly help the poorest sections of the US labour force. But it would do nothing to fix the central problem. And Republicans keep arguing for lower taxes on the wealth creators. Ditto. They have argued each other to a standstill.

Both parties might find it instructive to look north to Canada, which has endured its harshest winter in 20 years.

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…the ministry will today face further revolt over its decision to let developers turn 7 acres of church land near Leighton Buzzard in Bedfordshire into an out-of-town retail park.

Campaigners, who will march on Westminster Abbey at lunchtime, say the £15m development, in conjunction with Claymore Group, will “go against Christian beliefs” by damaging trade for small businesses in the town centre.

But the church is keeping faith in the controversial project, despite the fact it has been put on hold due to an ongoing legal challenge by protester Victoria Harvey.

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The Church Commissioners’ total return on its investment in 2013 was 15.9 per cent. This means that the Church Commissioners fund has exceeded its target return of RPI + 5 percentage points over the past one year, three years, ten years and twenty years. It has also has performed better than similar funds over the same periods. Details have been published today in their full Annual Report and Account (link below) for 2013.

The Commissioners’ fund is a closed fund, taking in no new money, and has performed better than its target return of RPI +5.0% p.a. and its comparator group over the past, one, three, 10 and 20 years.* The results confirm the fund’s strong long term performance

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The daughter of a 92-year-old priest who is paying interest on a loan agreed with the Church of England Pensions Board at 8.6 per cent – more than twice the cur-rent average – has questioned the morality of the scheme.

In 1985, the Revd Eric Quin took out a shared-equity loan in order to purchase a three-bedroom cottage in Cheshire for £45,750. With his wife, he paid £20,750 to put down a 45-per-cent deposit. The Pensions Board paid the remainder, £26,500, on the understanding that it would be entitled to 55 per cent of the final sale price.

The initial interest rate was three per cent – much lower than the 12-per-cent mortgage rate at the time. This rate was gradually increased in line with the pensions of all the fund’s members. Mr Quin is now paying interest at a rate of 8.6 per cent. The property has risen in value to £200,000.

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The man responsible for the Church of England’s £6bn endowment has defended plans to increase its investment in hedge funds, arguing that not all of the industry has “devil’s horns”.

Andreas Whittam Smith, First Church Estates Commissioner, told the Financial Times that the Church’s own ethical watchdog sanctioned short selling, providing it was done in a responsible way.

He added that the group “does not have ethical concerns about short selling per se as an investment practice,” and “did not make an ethical distinction between seeking to profit from a rise in the value of a security as against seeking to profit from a fall.”

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