It was interesting to read the recent announcement from the Archbishop of Canterbury stating that the Church of England was going to out-compete
Wonga in providing micro-loans. When I first read this story I was impressed by
the Archbishop for taking an active stand. Rather than do the usual thing and
bash Wonga or to wag a finger, here we have the Church of England saying that
they will take them on at their own game. Archbishop Welby is said to have had
a robust discussion with the Founder Errol Damelin telling him "we're not
in the business of trying to legislate you out of existence; we're trying to
compete you out of existence".
Can the Church make it work? Only time will tell.
However, what is probably more telling about this story is
what then followed. Having said how much he disapproved of Wonga, Archbishop
Welby then had to make a rather embarrassing admission. He had to admit that
£75,000 of the Church’s money was actually indirectly invested in Wonga. He
said Church investment managers "didn't pick up" that they had put
funds in a "pooled investment vehicle" which, through its
investments, had bought into Wonga.
Admittedly this is a small fraction of its total investments
of £5.5 billion. However, what it does shine a light on is not only the inter-connectedness
of the financial system but also the importance of being an active investor.
The Church are probably better than most when it comes to an
ethical stance on its investment portfolio and being an active investor. It has
its own Ethical Investment Advisory Group which "recommends against
investment" in companies which make more than 3% of their income from
pornography, 10% from military products and services, or 25% from other
industries such as gambling, alcohol and high interest rate lenders.
However, too often in the past it has not taken these
principles to the next level by taking a stand in public about how it invests
and the important of being an active investor. When we had the banking crisis taken
to the door-step of the Church of England in the form of the Occupy protests at
St Pauls the Church had a perfect opportunity to take a stand, but it struggled to find its position and its own voice, probably because it worried out what it
had in its own portfolio.
So now it is good to see the Church taking a stand on what
it believes and taking action rather than just talking. But what this situation
with Wonga has shown is that this space is a difficult and complex arena in
which to take a stand and to uphold your principles.
