GA16 Addressing Climate Change through UUA Investments
Tim Brennan, Treasurer and Chief Financial Officer, addressed the UUA’s progress on the GA14 Business Resolution concerning fossil fuel.
The Unitarian Universalist Association Joins Fossil Fuel Divestment Movement
Delegates at the 2014 General Assembly (GA) of the Unitarian Universalist Association (UUA) meeting in Providence, RI, today passed a resolution calling for divestment from fossil fuel companies in the UUA Common Endowment Fund (UUCEF).
The resolution requires the UUA to:
- Cease purchasing securities of CT200 companies as UUCEF investments immediately.
- Continue to divest its UUCEF holdings of directly held securities of CT200 companies, reaching full divestment of these companies within five years.
- Work with its current and prospective pooled-asset managers for the purpose of creating more fossil fuel-free investment opportunities, with the objective of full divestment of UUCEF indirect holdings in CT200 companies within five years.
- Invest an appropriate share of UUCEF holdings in securities that will support a swift transition to a clean energy economy, such as renewable energy and energy efficiency-related securities.
- Report, via the UUA President and the Treasurer, to each General Assembly from 2015 through 2019 on our Association’s progress on the above resolutions.
Following the vote, UUA President Peter Morales said “The UUA has a long-standing history of fighting for our environment. I am proud that we are going to put our money where our values are on this issue.”
The resolution was carefully crafted by a committed group of activists known as UU Divest (formally, Unitarian Universalists for Fossil Fuel Divestment and Sustainable Reinvestment) in collaboration with members of the UUA Committee on Socially Responsible Investing and the UUA Investment Committee. The UUA Board of Trustees endorsed the resolution as it was originally written at their meeting on April 13.
Terry Wiggins, a leader in the divestment effort, stated, “We, private citizens and the private and nonprofits sectors, need to take matters into our own hands, and use every strategy we can to convince the government and public at large of our planetary emergency, and that we must act now.”
The resolution allows the UUA to retain investments in fossil fuel companies with which it is engaged in shareholder actions seeking environmental justice. David Stewart, co-chair of the UUA’s Socially Responsible Investing Committee, stated, “We are encouraged that the UUA can continue its longstanding successes in shareholder advocacy while helping to lead the divestment movement with the approval of today’s fossil fuel divestment resolution. We believe strongly that any effort that can change the current trajectory of climate change is a welcome improvement.”
The UUA has a long history of shareholder activism on a variety of issues including environmental justice. Most recently, the UUA has worked to increase transparency in the executive office of Chevron Corp. and supported new Environmental Protection Agency limits on carbon emissions for new and existing power plants.
GA 2014: GA Talk on Fossil Fuel Divestment
Panelists Tim Brennan, Kimberly Gladman and Julian Sharp discuss divestment, responsible investing, and how the UUA Board of Trustees came to support the resolution. The discussion was moderated by UUA Financial Advisor, Larry Ladd.
Proposed Business Resolution on Fossil Fuel Divestment
The Unitarian Universalist Association (UUA) takes a very serious view on divestment and believes there are multiple ways to make an impact. At the 2014 General Assembly (GA), a Proposed Business Resolution on Fossil Fuel Divestment will be presented.
The UUA Board of Trustees passed a motion in April addressing the business resolution on divestment as follows:
“Recognizing the growing threat of climate change to the earth and to current and future generations, the Board of Trustees believes we must redouble our efforts to press for action to address the crisis through our invested assets. We should use all of the tools available to us, including shareholder advocacy and divestment of shares in companies doing the greatest harm. Therefore we support the passage of the Business Resolution calling for divestment of fossil fuel company stocks and engagement with the companies whose shares we hold. Further, we applaud the Investment Committee and Socially Responsible Investing Committee for their work in carrying out the 2006 Statement of Conscience Threat of Global Warming/Climate Change” which says: “We call upon our denominational leaders to provide sustainable investing, by exploring the potential for using the ownership rights of the denomination’s financial resources to positively address the global warming/climate change crisis.
In addition, the Board charges the team of Julian Sharp, Larry Ladd and Donna Harrison with crafting the Board statement supporting the proposed business resolution. This statement should make clear that The Board supports the resolution as written. To the extent that changes are proposed during the mini-assembly process, the Board will support those changes only if they are agreed to by the same parties who crafted and agreed to the proposed resolution.”
SRIC and the Fossil Fuel Divestment Resolution
The Socially Responsible Investment Committee (“SRIC”) subsequently unanimously voted to endorse the fossil fuel divestment resolution. If passed, this resolution will allow the Unitarian Universalist Common Endowment Fund to continue a process begun years ago of reducing climate-related risk to our investments, while using our power as investors to change corporate behavior. Here are some of the steps in that strategy:
Choosing our investments
- We have been divested from coal for years (well before Stanford’s Summer 2014 announcement). A few shares are held for advocacy purposes.
- In collaboration with research firm Sustainalytics, we apply especially stringent social and environmental screens to our direct energy holdings, ensuring that we invest only in best-in-class energy companies.
- When we invest in pooled vehicles, we question managers about their approach to climate risk and carbon valuation, and prefer those with a climate-friendly approach.
- As a result, compared to benchmarks, the Unitarian Universalist Common Endowment Fund is already underweight in energy, with only 2.9% of the fund currently in companies on the Carbon Tracker 200 list of the largest fossil fuel companies by reserves. This number has declined over the last year, and compares to about 9% for market benchmarks.
Advocating for change
- We are a member of the Investor Network on Climate Risk (INCR), a group of investors with over $11 trillion in assets that is advocating for disclosure and reduction of carbon emissions at the world’s largest companies. We “fight above our weight”: this year, we were in the leadership group for 7% of shareholder resolutions filed by INCR, despite holding only a little over one one-thousandth of one percent of the assets of the group.
- We are among the original signatories to the Carbon Asset Risk letter, coordinated by environmental advocacy groups CERES and INCR, which asks the world’s largest oil and gas, coal and electric power companies to assess business risks from future carbon regulation.
- We have been instrumental in getting companies to address the problem of natural gas flaring. After an engagement with us this year, Oasis Petroleum, one of the country’s largest producers of oil, agreed to minimize natural gas flaring from oil wells by connecting over 90% to gas capturing infrastructure and to report the results in their SEC filings.
To learn more about the UUCEF and investment responses to climate change at the 2014 General Assembly, attend our panel, Divestment and Beyond: Effecting Social Change via Investments, to be held on Thursday, at 10:15am in the RICC Ballroom E.
SRIC Report to the 2013 General Assembly
On Thursday, June 20th the Chair of the SRIC, Glenn Farley, presented their report (PDF) to the General Assembly. Please take a moment to read the report to see who the UUA is as a responsible investor, promises made and fulfilled by the committee and, the promises they commit to fulfill in the future.
Ten Things All UUs Should Know About SRI
The UUA’s SRIC offers a must read for all Unitarian Universalists (UUs) called “Ten Things All UUs Should Know About Socially Responsible Investing (SRI)“.
Differing views on fossil fuel divestment
Recently Rev. Fred Small had an article on fossil fuel divestment titled “Fossil fuel divestment is moral, strategic” published in UU World. Also published in the same issue is a counterpoint article by UUA Treasurer, Tim Brennan, titled “Fossil fuel divestment is not the answer.” Check out the articles for a well rounded view of this growing issue.