On Your Behalf - June 2008 Report

General Conference and Socially Responsible Investing: A Closer Look

The 2008 General Conference, the highest legislative authority of The United Methodist Church, recently concluded its 10-day quadrennial deliberation on Church policies, ministries and administration. The 992 delegates to General Conference 2008 considered many petitions dealing with social issues and the work of socially responsible investing (SRI). The following is a summary of some of the SRI actions taken by General Conference 2008 that have implications for the General Board’s investments.

Investment Ethics

The Church’s primary SRI document is resolution #213, “Investment Ethics,” found in The Book of Resolutions 2004. “Investment Ethics” describes United Methodist investing strategies and policies. It recognizes the traditional SRI tools (portfolio screening, social impact investing, shareholder advocacy and strategic partnerships), while encouraging specific investment objectives, such as investing in companies making a positive contribution to the realization of the goals outlined in the Social Principles.

General Conference made a number of editorial changes to the “Investment Ethics” resolution. Substantive changes included the addition of the following recommendations to United Methodist investors: to seek opportunities to invest in companies with “positive records in hiring and promoting women and racial and ethnic persons…” and “to encourage companies to honor and promote human rights and the dignity of human life.”

Most significantly, however, General Conference amended the way weapons and military manufacturers are excluded from United Methodist investments. The 2004 resolution called for “avoidance by nonpurchase…of holdings in companies that…rank among the top 100 Department of Defense (DOD) contractors...for the past three years.” Because weapons manufacturers clearly are forbidden elsewhere in the resolution and because many non-weapons manufacturers are on the DOD list, General Conference 2008 eliminated this DOD contractors prohibition.

In general, the changes to the “Investment Ethics” resolution approved at this year’s General Conference do not alter the General Board’s weapons-related screening techniques. Some companies, however, now prohibited because they are on the DOD list, may become eligible for purchase. Watch for more information in future issues of SRI Connection.

Socially Responsible Investment Task Force

General Conference 2008 authorized the creation of a multi-agency SRI task force to establish, implement and promote “a common standard for determining prohibited investments and positive investment principles that are consistent with The United Methodist Social Principles and that can be utilized by both individual and institutional investors.” In addition, the task force is urged to “seriously consider global human rights needs, for example, the Middle East, Sudan and China.”

The United Methodist Foundation will serve as leader of the task force, and membership will include the General Board of Church and Society, the General Board of Global Ministries, the General Board of Pension and Health Benefits, The United Methodist Church Foundation and the National Association of United Methodist Foundations.

The task force is to report on its progress to General Conference 2012.

Divestment

General Conference 2008 considered several petitions relating to divestment from companies involved in the Israeli occupation of Palestinian land. One such petition, calling for divestment from Caterpillar Inc., was withdrawn prior to General Conference following constructive meetings between Caterpillar executives and the General Board of Church and Society, the petition’s sponsor. Other petitions calling for divestment from companies perceived as profiting from Israel’s occupation of Palestinian areas were not adopted by General Conference.

General Conference also considered several resolutions relating to Sudan and approved a resolution calling upon Church investors “to prayerfully consider divestment of the personal and pension assets under their control from any company doing business with the government of Sudan, and request that other investment managers such as mutual fund companies, pension plans and bank trustees do the same.”

When dealing with companies and important social issues, the General Board continues to believe that constructive engagement is one of the most powerful tools for change. Divestment always is an option, but only after other avenues of engagement have been unsuccessful.

Global Warming

General Conference 2008 strengthened the Church’s witness against global warming by adding a new section to ¶160 of the Social Principles. The new language voices support for efforts “of all governments to require mandatory reductions in greenhouse gas emissions” and calls “on individuals, congregations, businesses, industries, and communities to reduce their emissions.”

In addition, General Conference created a Global Warming Task Force “to develop recommendations and resources that would guide The United Methodist Church in reducing our carbon dioxide impact” and “would guide us in reducing our carbon impact and ecological footprint upon creation and finding alternative, renewable energy resources to use in carrying out our call to care for the earth as part of Christian discipleship.”

The General Board was not specified as a member of this new task force, but as a longtime advocate for greater environmental responsibility, we are eager to work with this task force as it grapples with this vital issue.

Rights of Workers

Since publication of its first Social Creed in 1908, the Church has been a strong advocate for workers’ rights. General Conference 2008 continued that tradition by revising resolution 237, “Rights of Workers.” The 2008 revisions specifically call upon the General Board “to continue to invest in companies that set high standards for treatment of workers throughout the world and to file or join shareholder resolutions that encourage such high standards.”

Native Americans

General Conference 2008 revised resolution 215, “Economic Development for Native American People” and specifically urged the General Board “to invest funds in Native American financial institutions and community organizations.”

In 2005, the General Board helped fund a 30-year, $1.8 million loan to Friendship House, a San Francisco-based transitional housing and job training facility primarily for Native Americans with addiction problems.

In 2007, the General Board joined a number of public and private partners in providing $10 million to help finance the Native American Health Center’s Seven Directions Mixed-Use Healthcare and Affordable Housing Project in Oakland, California. When completed, the 26,000-square-foot, community-based health care center will provide medical care, dental care and outpatient mental health services and include 36 affordable housing units.

The General Board will continue to seek investments encouraging development in Native American communities.

Other Changes

General Conference 2008 made a number of other changes to the Social Principles and The Book of Resolutions. These changes are not directed specifically to the General Board but they give further impetus to the kind of socially responsible investing that has characterized the General Board for many years. The Social Principles and The Book of Resolutions continue to provide the foundation for all of the General Board’s investments.