The E-mail Commentary from Eco-Justice Ministries
UCC Divestment? Yes and No
distributed 5/30/14 - ©2014
It has been widely reported that the United Church of Christ voted to divest from fossil fuels at their national convention last summer.
The problem is, that isn't quite true. At least not yet.
This month, I've been looking very closely at the UCC divestment resolution. While it doesn't deliver immediately what some of the most enthusiastic news report promised, it is a bold and remarkable document. The denomination has instructed itself to act strongly on many fronts regarding fossil fuel investments.
The actions that are emerging from the United Church of Christ are controversial -- too much for some and not enough for others. What the UCC is doing does provide one model for how churches can provide faithful witness and strong leadership in this time of global climate disruption.
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This year, I'm serving on the Environmental Ministries Steering Committee of the national UCC. We're providing guidance to the church leadership about ways to broaden, deepen and enliven the denomination's programming for environmental justice and ecological health.
Our steering committee has some say (a fairly small say, probably!) into how the denomination implements last summer's divestment resolution. I volunteered to help write that section of our report, so I've been going through the resolution line-by-line, word-by-word, and trying to figure out what it really means. I'm impressed.
On July 1, 2013, the UCC's General Synod passed a motion titled, "Resolution Urging Divestment -- Along With Other Strategies -- From Fossil Fuel Companies." A resounding 79% of the delegates voted in support of the measure. But what they voted on was a substitute resolution, pulled together at the last minute because of some powerful opposition to full and immediate divestment. As the title clearly says, several strategies are defined to take on the fossil fuel companies, and some of those involve divestment.
Here are some of what I've come to see as important aspects of the resolution -- with my own very personal comments about why they are significant.
- The UCC will make shareholder engagement on climate change an immediate, top priority for the next five years.
Shareholder activism is an alternative way to use investments for social change. The resolution names three specific issues where pressure will be put on companies: to be transparent about climate change lobbying; to disclose the companies' financial risk in the face of a carbon tax or other legislative action; and insisting that the companies' "operations and products conform to achieve the goal of scientifically understood safe levels of CO2 and methane."
The first two of these force companies to reveal details about business practices that they'd rather hide. A resolution on financial risk is what forced ExxonMobil to produce their report this spring that they don't expect governments to create enough restrictions to mess up their profitability, so they plan to produce all the fossil fuels that they can, even knowing the climate impacts of that production. The backlash to that report stirred up a lot of public discussion about the ethics of fossil fuels.
Just like divestment may not cause direct financial harm to the fossil fuel companies, shareholder resolutions probably won't make those companies give up their core business. The UCC's minister of environmental justice, Meighan Pritchard, has written, "divestment and shareholder activism are two opposite tactics to achieve the same goal, which is to revoke the social license of fossil fuel companies to continue to do 'business as usual,' since that requires frying the planet."
- The church agencies that deal with big investments are instructed to "create and promote an investment vehicle free of fossil fuel companies for qualified investors within 18 months."
One of the challenges about divestment is that most institutional investors don't sit down and create their own lists of stocks and bonds. They buy into a mix of big, diverse mutual funds, almost all of which contain a strong mix of fossil fuel companies. With just a few exceptions, there is no easy way to swap millions of dollars of church funds into no-carbon investments.
It is exciting that the UCC, by the end of 2014, will have developed that sort of investment fund. It will be available, at the start, as an option to clergy with pension accounts, and to individuals and congregations who do their investing through church systems. It does not force divestment, but it does create that option. Divestment will be a far more viable option -- for individuals, congregations and denominations -- when these kinds of mutual funds are available. As the investment world responds to the call for divestment and creates more of these funds, the legitimacy of fossil fuels will be challenged.
- The church will set standards and do research "to identify 'best in class' fossil fuel companies (if any)" and will develop a plan so that, by June 2018, no denominational investment will be in fossil fuel companies except the 'best in class' ones.
I have a hard time imagining what a "best in class" company might look like. The background section of the resolution reminds us: "If fossil fuel companies simply carry out their stated missions by utilizing the known reserves they currently own or have rights to, the earth will become inhospitable to life as we know it." If "best in class fossil fuel company" is an oxymoron, then the UCC will divest from all fossil fuels in just over four years (with the hedge: "to the fullest extent allowable by applicable law").
Fletcher Harper, who heads up Green Faith, names three commitments that could make fossil fuel companies morally acceptable for church investments. (See p. 10 of his paper, "Divest and Reinvest Now!"). Any business that could meet these challenging standards would be transitioning toward climate solutions, and would deserve support. The ones that can't meet rigorous "best in class" standards will be cut from the denomination's investment portfolios.
- For the next five General Synods, until 2023, the UCC will make climate change, investments, and "how the vocation of the church is and must change in the context of climate change" a major topic of discussion by the national conventions.
This resolution doesn't brush off the issue of climate change with a one-time statement of beliefs and a few promises. For the next decade, the denomination will held accountable about how it is keeping climate action in the forefront of its mission and ministry. Investment is just one way that faithfulness will be evaluated in this time of climate crisis.
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The call for divestment has targeted college and university endowment funds. Divestment is also being considered by several denominational bodies around the world. A few of those institutions have voted to divest from some or all fossil fuel companies. Many others, with ongoing activist pressure, continue to debate the question.
The UCC's actions in the last year are not perfect. They do provide a very important model, though, for how a denomination can respond to conflicting parts of its membership, deal seriously with ecological and economic realities, wrestle with options for faithful and responsible action, and challenge itself to keep working on the issue.
May all denominations do at least this much.
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