The C of E’s pension fund does not easily mix with its principles. But disinvesting in News Corp sends an ethical signal
So a moment of silent pity, if you can manage it, for the Church of England, which has inherited this enormous pension fund and must somehow work out how to make use of it without getting its hands too dirty. Incidentally, the Church Commissioners are almost entirely a pension fund, and they pay only 15% of the church’s running costs. The rest is raised from congregations every year.
The decision to disinvest in News Corp can only be meant as a signal.
By selling nearly £2m worth of shares, it will have caused no hardship to a $57bn corporation. But it has put down a marker that it regards the whole phone-hacking scandal as something that no reputable company should have got involved in. It says that for a year now it has been trying to persuade News Corp to change its corporate governance – for which, read “stop being entirely controlled by the Murdoch family”.
When I asked what exactly was wrong about the corporate governance of News Corp, the press officer did not reply: “Rupert Murdoch.” Instead, he said that it was wrong for the chairman and chief executive to be the same person.
It’s hard to believe this is really the reason. The church does have clear rules about ethical investments, and sticks to them at some cost. It won’t invest in alcohol, tobacco, pornography, arms traders or payday lenders. Although it puts money in hedge funds (£60m as opposed to the £1.9m in News Corp) these are vetted to ensure they don’t trade in socially destructive ways. The commissioners list among unacceptable practices, “short-selling, trading in basic commodities such as food and oil, trading around mergers and acquisitions, and trading in the assets of companies in financial distress”.
A note in this year’s accounts suggests that these ethical decisions knocked about 2% off the value of its portfolio last year, which must have been quite painful when the fund’s return was only 2.9%.
Yet the fund still ends up invested in a number of morally dubious companies, among them Vodafone (tax avoidance), Royal Dutch Shell and BP (oil), Google (which certainly profits from selling advertising against pornography, payday loans and other forbidden nasties), and big pharma like GlaxoSmithKline.
As a customer of all those firms myself (or, in Google’s case, as part of its product) I am not in any position to make moral noises. But is News Corp really that much worse than the companies in which the church is still invested? Is it even the worst media company? There is suspicion of widespread phone hacking among the tabloids, and of bribery of policemen and prison officers for stories. The Mail is more brutal in its attacks than any Murdoch paper; the Express group is run by a pornographer. You couldn’t say that the Times had more of a political agenda, or fewer scruples about it, than the Telegraph, or even the Guardian.
It looks to me as if the Church Commissioners were acting as part of the Church of England here. They are run by Andreas Whittam Smith, who founded the Independent, and who has always taken moral questions seriously. In the particular context of British politics, News Corp did for years exert a malign influence that no other media group quite managed. All media power tends to corrupt. News Corp had more of it than most: too much, as we now can see.
The church is part of a fallen, morally equivocal world. It can’t administer its pension scheme without muddying its principles. But it can act to make the world a little better at the edges and this is what it has now done by saying very publicly that News Corp does not meet its ethical standards.