Salt Lake City – Socially responsible investing is complicated and can be confusing. Add in socially conscious people’s emotional and heartfelt desires, and you get the kerfuffle that went down at the 226th General Assembly (GA) of the Presbyterian Church (U.S.A.).
According to Investopedia, socially responsible investing, or SRI, is “an ethical focus for individuals and companies that want to take action and be accountable for practices that benefit society.”
The PC(USA) has said SRI is “an instrument of mission and includes theological, social and economic considerations.” Mission Responsibility Through Investment (MRTI) was created in 1972 to carry out that mission.
Since then, the PC(USA) has used this tool to leverage the significant investments at its disposal. The Presbyterian Foundation and the Board of Pensions (BOP) together manage a little over $13 billion in investments and have used those holdings at the direction of the General Assembly (GA) as an entry point to speak to various companies about their products, specifically regarding military-related production, tobacco, human rights violations, environmental concerns and operating for-profit prisons.
There are currently 114 companies on the list, including such well-known corporations as Lockheed Martin Corp., Mitsubishi Group, Airbus SE, Fluor Corp., Smith & Wesson Brands Inc., British American Tobacco PLC, Philip Morris CR, Caterpillar, Motorola Solutions, Chevron, ExxonMobile and many others.
At this year’s assembly, those strongly advocating for immediate divestment of some $300 million in interests held in fossil fuel companies because of their contribution to climate change ran right smack dab into the intricacy of how SRI works and came away frustrated, especially at the pace it takes to be implemented.
That frustration bubbled over during the assembly’s consideration of a recommendation, labeled ENV-02, to immediately rid the Presbyterian Foundation and BOP of their investments in fossil fuel holdings.
The debate, along with an earlier decision by the Committee on Financial Resources, may suggest an overall frustration with the denomination’s divestment process, or, at least, a lack of understanding and/or knowledge of what’s involved in making divestment happen.
The fossil fuel divestment debate … may suggest an overall frustration with the denomination’s divestment process, or, at least, a lack of understanding and/or knowledge of what’s involved in making divestment happen.
There were two different actions by commissioners – one in committee, one in plenary – that signaled this frustration.
First, the Financial Resources Committee considered a commissioners’ resolution, FIN-15, calling for the Presbyterian Foundation and Board of Pensions to “prayerfully consider” divesting and not reinvesting in “governmental debt held by countries that are currently maintaining a prolonged military occupation” of another country. Currently, Israel, Morocco and Turkey would be affected. (Those words, “prayerfully consider,” became important in plenary.)
That recommendation would short-circuit the denomination’s seven-step process of socially responsible investing that includes “focused engagement” with companies and can lead to a recommendation for divestment if the engagement doesn’t lead to a satisfactory conclusion.
It also called upon MRTI to investigate the feasibility of creating a process to maintain such a list.
Representatives from the BOP, the Presbyterian Foundation, the Advisory Committee on Social Witness Policy (ACSWP) and the Presbyterian Mission Agency (PMA) all spoke against immediate divestment/reinvesting, but supported asking MRTI to create a process.
In the end, the committee ignored the recommendations of the denominational agencies, and overwhelmingly said, essentially, “Do it now.”
The Financial Resources Committee ignored the recommendations of the denominational agencies, and overwhelmingly approved FIN-15, “Divest from Governmental Debt Held by Countries Maintaining a Prolonged Military Occupation.”
Because of the margin of the vote, the item was placed on the consent agenda, which lets the assembly clear its plate of items appearing to be non-controversial, although a request by just one commissioner can have that item removed and debated normally. Somewhat surprisingly perhaps, because of the “official” opposition to some of the resolutions, the item was not pulled and, therefore, passed unanimously.
Following the vote, Presbyterian Foundation CEO Tom Taylor said, “Recommendations 1 and 2 prayerfully call on the agencies to divest of sovereign debt issued by countries in a prolonged military occupation. The third recommendation creates a mechanism and path to provide the recommendations upon which we act.
“Through its regular processes, MRTI could add this type of debt to their divestment list as soon as this fall, after which the investing agencies could present the recommendations to their boards for action. After that, the MRTI task force can examine sovereign debt issued by countries in a prolonged military occupation and develop a policy on it, as the Presbyterian Mission Agency Board suggested in their comment on the overture.”
The sell-off could begin as soon as early next year.
So, confrontation was averted because of a prayerful request. Both sides got what they wanted: commissioners wanted action; the agencies needed to maintain their responsibility to investors.
The fossil fuels issue was more complicated and kerfluffle-causing later in the week…
But the fossil fuels issue was more complicated and kerfluffle-causing later in the week when the Environmental and Climate Justice Committee’s report recommended two contradictory actions, which one committee member acknowledged, committee members realized – but recommended both nevertheless.
First up in plenary was ENV-02, a recommendation to “[d]eclare that continued support of the exploration, development, funding, and exploitation of fossil fuels through investment of PC(USA) funds violates the equitable welfare of all life and our biblical charge as humanity to care for creation, and is irretrievably incompatible with the mission and goals of the Presbyterian Church (U.S.A.).”
Further, the recommendation ordered “that all publicly traded companies whose primary source of income is derived from the exploration, development, and production of fossil fuels are to be placed on the General Assembly’s list of prohibited securities.” [Emphasis added.]
No process, no study. Just do it.
Commissioners rejected a minority report and eventually approved the recommendation 284-146.
Next up, however, was ENV-06, a recommendation the denomination “prioritize responses to the urgent needs associated with the existential threats of the climate crisis, including those related to limiting global warming to well below two degrees Celsius, as outlined in the Paris Agreement, including the addition to the agreement by the parties during the UN Climate Change Conference COP 28 calling for ‘transitioning away from fossil fuels in a just, orderly and equitable manner, accelerating action in this critical decade’ and for PCUSA-related entities and members to promote and pursue comprehensive faithful responses to these threats.”
That left those who would be involved in carrying out the mandate confused.
“You are not going to get investment now,” outgoing MRTI Chair Kerri Allen said. “This leaves us without a process.
“With the passing of ENV-02, MRTI ceases engagement with frontline communities impacted by climate change,” she said. “We’ve lost the ability to file shareholder resolutions and strategically influence corporate board elections. …It’s questionable whether ENV-02 can even be implemented because the action cuts MRTI out of the process.
“It’s sad to me when impact and intent don’t align,” she said.
The second recommendation directed MRTI to immediately divest from the top 10 fossil fuel companies, whose profits mostly come from exploration, development and production of fossil fuels and “with which there will be no promising engagement.” MRTI was also directed to “continue engaging companies identified by Climate Action 100+ that are a) headquartered in the United States, b) held by PC(USA) investing agencies, c) identified by MRTI for engagement in the 2025 and 2026 proxy seasons.”
So which would it be? Would the commissioners zig or would the commissioners zag?
So which would it be? Would the commissioners zig or would the commissioners zag?
Eventually, a motion to reconsider ENV-02 passed, which is not all that unusual. What followed, however, was.
During the reconsideration, emotional statements came from both sides.
“MRTI has had more than enough time to engage in their bureaucratic process,” said Young Adult Advisory Delegate Mairead Brock from the Presbytery of Western North Carolina. “You’ve had years and years to engage in this. To flip tables as Jesus did forces these companies to make a move when asking nicely hasn’t worked.”
“To flip tables as Jesus did forces these companies to make a move when asking nicely hasn’t worked.” — Young Adult Advisory Delegate Mairead Broc
Rex Daily, a ruling elder from the Presbytery of Indian Nations whose career was in the oil and gas industry, said, “Let’s not forget that green energy is not so green.
“Generators hold 700 gallons [of fuel]. There is no perfect energy product. There are churches who have a big chunk of their income that comes from oil and gas revenues. If this resolution passes, we’ll have to shut the lights off.”
The turning point seemed to come when Denise Anderson, a former co-moderator and current director of compassion, peace and justice for the PMA, recalled a trip to Louisiana where she and others met with Indigenous residents and people of color who were being harmed by oil and gas exploration.
She put a personal face on what “staying engaged” meant.
She said she fully expected those people to be all for divesting, but they weren’t. They wanted the PC(USA) to stay at the table, to still be able to offer shareholders resolutions, to help get sympathetic directors elected, and exercise any influence possible to help their cause.
If the church divested, their voices would not be heard.
If the church divested, (minority) voices would not be heard.
That realization turned her opinion around, she said. It also seemed as if it influenced commissioners.
After the reconsideration, ENV-02, seeking immediate divestment, was soundly defeated, 264-146. Those who have watched and/or attended GAs for years could not recall any other time this has happened — when a decision was reconsidered and then defeated the second time around.
Those who have watched and/or attended GAs for years could not recall any other time this has happened.
ENV-06, then, was approved 375-48 after it was amended to direct MRTI to “immediately identify the top ten fossil fuel companies that derive the majority of their profits from the exploration, development, and production of fossil fuels and with which there will be no promising engagement, and immediately divest from those companies.”
After the dust had more or less settled, MRTI chair Kerri Allen lamented the seeming lack of understanding and/or appreciation for the intricacies of the divestment process.
Several times during the discussions, those involved in making the decisions stressed that the investing agencies have dual responsibilities: one to follow General Assembly directives and two, to be fiscally responsible, meaning looking after the investments of the many people and institutions who have invested their money with them.
That is why it is so important, Allen said, that there be a stable process in place so that the Presbyterian Foundation, BOP and others can show regulators they are not just flip-flopping and making those decisions arbitrarily.
Additionally, she said, research has shown that total divestment isn’t a good strategy, but selective investment is. “Selective divestment indicates the bad actors,” she said. “It’s a reputational risk for them,” noting that several companies have publicly worried about being on a selective divestment list.
So, even commissioners concluded, it was better to stay at the table than leave it. But the PC(USA) doesn’t necessarily need to be quiet at that table.
