Socially Responsible Investment Review

March 2022

Mining

Mining will feature as a main ethical theme for us as we seek to ensure companies are contributing to the just transition to a better climate. Our position with the mining companies is to have a preferential option for victims, the poor and the marginalised, and to help their voice reach the highest levels of the company. The efforts of the CFB will focus on the rights of workers, the condition of indigenous communities, and the stewardship of our shared planet.

Rio Tinto

The CFB and Epworth featured in a February 2022 article in the Sunday Times online as one of the only investors willing to make serious comment after the mining company Rio Tinto published a report detailing systemic workplace toxicity including incidents of criminal harassment, attempted rape, and racism with their company. For us, our job is to stand in solidarity with the victims and drive change.

While we welcome the efforts of the new leadership at Rio Tinto to uncover and address these issues with robustness and transparency, the findings demonstrate systemic problems that not only present a material risk to shareholder value but, and more importantly, demonstrate that Rio Tinto employees are exposed to wholly unacceptable conduct and unsafe working conditions.

We have already been in contact with Rio Tinto’s investor relations team and are part of a constructive dialogue with the company to address the issue of workplace culture. We will also be watching Rio Tinto’s progress closely and look forward to the resolute implementation of all of Elizabeth Broderick’s 26 recommendations contained in the report.

Fair Tax Mark

Towards the end of 2021, the Fair Tax Foundation launched the Global Multinational Business Standard, which means the Fair Tax Mark can be achieved by companies headquartered outside the UK. During the quarter we wrote to two European companies, Troax and Infotel, to encourage them in transparent reporting, and pointed them towards the Fair Tax Foundation. We look forward to a response in due course.

During the quarter, Andrew Harper, our Head of Ethics, was interviewed by ESG Clarity for a piece called ‘Consider Fair Tax Or Get Left Behind’. He discusses leading by example, how to get the Fair Tax Mark and why ESG managers can’t shy away from tax issues just because they are harder to assess. It is available on the ESG Clarity website.

Corporate Governance

We continue to vote in line with our Church Investors Group policy and voted at just over 30 company AGMs in the quarter. We were pleased to see some changes as the result of our voting policy recently at Brooks Macdonald, a financial services company in which the CFB/Epworth has had a reasonably significant shareholding since 2017 through its UK equity funds. We voted against the remuneration report and Chair of the remuneration committee in 2020 & 2021, partly in response to the variable remuneration schemes not including non-financial targets for management. This led to specific dialogue with the company on the issue in writing, and recently Brooks Macdonald indicated that it intends to include new non-financial targets relating to diversity and environmental performance as 10% of its future management remuneration incentive.