The Church of England has threatened to pull its $6 million investment in Rupert Murdoch's News Corp over the phone hacking scandal at its News of the World paper.
The Church's investment represents a small amount of News Corp's value, a company with a market cap of $32 billion.
But the move is an indication of the wider repercussions from the scandal for the media giant's brand.
The Church said in a statement its Ethical Investment Advisory Group (EIAG) wrote to News Corp on Friday, saying the behavior of the paper, accused of illegally accessing countless voicemail messages and making payments to police, had been utterly "reprehensible and unethical."
"While the EIAG welcomes the decision to close the News of the World, this action is not a sufficient response to the revelations of malpractice at the paper," it added.
"Nor does it address the failure of News International and News Corporation executives to undertake a proper investigation and take decisive remedial action as soon as the police uncovered illegal phone hacking in 2006."
The Church said it had written to Murdoch to insist that News Corp took "all necessary measures" to instil investor confidence in the group's ethical and governance standards.
"We cannot imagine circumstances in which we would be satisfied with any outcome that does not hold senior executives to account at News Corporation for the gross failures of management at the News of the World," it added.
A spokesman for the Church said: "There must always in the background be the possibility that, after discussions with the senior management, if you are not influencing what they do or how they do it, there must always be the possibility that we will disinvest.
"It's quite rare but it does happen," he said, pointing to the Vedanta disinvestment in early 2010 when the Church of England sold its 3.6 million pound stock in the mining company over ethical concerns.