Church of England threatens to pull mining investment over ethical concerns

The Church of England's investment bodies have issued a statement warning that it would pull out of mining companies that have unethical business practices or do not express an intention to change.

(REUTERS / Washington Alves)A view of the Samarco mine, owned by Vale SA and BHP Billiton Ltd, in Mariana, Brazil, April 12, 2016.

In a statement, the Church of England's National Investing Bodies expressed concern over mining companies' "business conduct" that was harmful to the environment. It also promised to speak with firms whose performances could still improve and divest from those that do not show any sign of progress, the Financial Times relayed.

"Extractives companies are particularly vulnerable to poor governance, ethical controversy and harmful, long-lasting impacts on communities and the environment," the NIB said.

In addition, the NIB expressed concern over dams and the frequency of dam failings in the mining industry. In 2015, ore miner Samarco's dam in Brazil collapsed, leading to the worst environmental tragedy in the country's history.

The Samarco mine disaster in Brazil resulted in the death of 19 people and the destruction of two villages. A river valley was flooded after a dam full of the mine's wastewater gave way, The Telegraph reported.

In light of the Samarco mine disaster, Church Commissioners and Pensions Board head of engagement Adam Matthews told The Daily Telegraph that the mining industry needed to pay more attention to tailings dams' safety and risks. There are believed to be at least 3,500 of these dams all over the world, and these require maintenance even after the mining work is done.

Matthews called on miners to "level the standards" of reporting on joint ventures. He said such ventures often fail to include information for the safety of the company.

Based on the Church Commissioners annual report, the Church of England's £7.9 billion fund has achieved a total return of 17.1 percent on its assets. It has also managed to maintain its practice of ethical investing while reaching the top ranks of endowment funds with the best performances.