Fallout from the phone-hacking scandal at News Corp’s UK newspapers continues in the courts, but today one body has passed its final judgment. The Church of England said the move to sell its £1.9M in News Corp holdings was based on advice from its Ethical Investment Advisory Group. The church said it first raised concerns with News Corp’s board following the phone hacking revelations of July 2011, but after a year of discussions was unsatisfied that Rupert Murdoch’s company “had shown, or is likely in the immediate future to show, a commitment to implement necessary corporate governance reform.” A full statement from the Church follows:

The Church Commissioners and the Church of England Pensions Board have today announced the sale of their shares in News Corporation on the advice of the Church’s Ethical Investment Advisory Group (EIAG). The total shareholding sold was worth £1.9 million. As a result, none of the three national investing bodies of the Church of England hold shares in the company.

The Church of England first raised concerns with the Board of News Corporation in the aftermath of the phone hacking allegations that surfaced in July 2011. After a year of dialogue between the company and the EIAG, the Church of England was not satisfied that News Corporation had shown, or is likely in the immediate future to show, a commitment to implement necessary corporate governance reform.

Andrew Brown, Secretary of the Church Commissioners, said: “Last year’s phone hacking allegations raised some serious concerns amongst the Church’s investing bodies about our holding in News Corporation. Our decision to disinvest was not one taken lightly and follows a year of continuous dialogue with the company, during which the EIAG put forward a number of recommendations around how corporate governance structures at News Corporation could be improved. However the EIAG does not feel that the company has brought about sufficient change and we have accepted its advice to disinvest.”

In 1994 the Church of England established the EIAG, the independent advisory group which advises the Church of England’s three national investing bodies on its ethical investment policy. The EIAG engages on ethical and corporate governance issues with many of the companies in which the Church of England has its main equity holdings. Between April 2011 and March 2012 the EIAG held meetings with 40 companies prioritised for engagement, one of which was News Corporation.

The Church of England already excludes investment in companies involved in military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and high interest rate lending.

The Church of England has three national investment bodies: the Church Commissioners for England; the Church of England Pensions Board; and the CBF Church of England Funds. Together they hold a broad range of assets worth in excess of £8 billion. The funds are used to sustain the Church’s network of 12,000 parishes, 16,000 churches, 8,500 stipendiary priests – and their pensions – and 10,000 readers and pastoral assistants and to support the daily work they carry out in their local communities.