The Church Pensions Board, which is committed to “responsible and ethical investment”, said it was “deeply concerned” at reports that water companies were prioritising dividend payments over vital work to tackle sewage.
Responding to a Channel 4 investigation by comedian-turned-activist Joe Lycett, the Church board said it “does not rule” out withdrawing its water utility company holdings if bosses do not respond to its calls to take action over sewage leaks.
Last year, the board divested its investments in oil and gas companies for failing to show “sufficient ambition” to hit decarbonisation targets.
In Joe Lycett vs Sewage, which will be broadcast on Tuesday night, the comedian discovers that water companies in England alone are responsible for 301,091 sewage overflows, running for a total of 1,754,921 hours in 2022.
While the privatised water and sewerage companies in England paid £1.4bn in dividends in the last financial year, Mr Lycett is told by whistleblowers that the prospect of slashed bonuses disincentivises water company bosses from reporting discharges.
In a letter to the Church, addressed “Dear Archbishop who art in Canterbury”, Mr Lycett writes that the institution holds “up to £32m of investments in water companies… The same companies responsible for every year pumping millions of litres of untreated sewage into the UK’s waterways”.
He asks the Church to support his cause: “We’re calling on the water companies to change their ways, and spend their money preventing spills rather than paying dividends to shareholders.”
In a reply to Mr Lycett, the pensions board said it “remains deeply concerned by the operation of several companies, the effectiveness of the regulation of the sector and also how investors can better engage with the sector to improve it”.
“Given the level of concern and the issues that you rightly raise, this is not an easy task but we view that progress and improvements are possible.”
The board confirmed to i that it “does not rule out disinvesting from companies or refusing to fund future debt if we believe the management are not suitably responsive to our engagement.
“That form of escalation could also be an option for water utility companies, but it is not one that we are recommending to our trustees as being necessary at this stage.”
In the film, Mr Lycett speaks to a whistleblower at a major UK water and sewerage company, who reveals the current “dilapidated” state of the sewage treatment network and claims that wastewater workers are incentivised not to report sewage spills.
Mr Lycett, who previously tackled the oil industry and called on David Beckham to step down from his reported £10m ambassadorial role in Qatar, investigates the “incestuous” nature of the water industry.
The documentary shows how executives move frequently between regulatory bodies such as Ofwat, environmental agencies and water companies. The bodies involved deny any conflict of interest.
The Church of England said it holds £365,000 in UK water company shares, and about £30m in bonds across the sector, out of a portfolio of more than £3bn in funds under management.
Known for his attention-grabbing stunts, Mr Lycett records a Turdcast podcast with Gary Lineker, in which the Match of the Day presenter talks about the notorious moment he “relieved” himself on the pitch in England’s opening game of the 1990 World Cup.
The podcast’s “launch” was abandoned when Mr Lycett’s inflatable toilet leaked sewage into Liverpool’s Albert Docks – in reality, harmless marine mud.