New metrics to help meet directive from 222nd General Assembly
by Rick Jones | Presbyterian News Service
(Photo via iStock)
LOUISVILLE – In response to its directive from the 222nd General Assembly, the Presbyterian Church (U.S.A.)’s Committee on Mission Responsibility Through Investment (MRTI) has come up with a new way of measuring the progress it makes with companies engaged in conversations around environmental, social and governance (ESG) issues. The new set of metrics turned a recent, brief General Assembly directive into an actionable document.
“MRTI has been intentional to regularly engage with Presbyterians with vastly differing opinions on the ‘categorical divestment from fossil fuel companies issue,’” said Joseph Kinard, MRTI chair. “We believe the metrics the committee has produced reflects this diverse input and provides a way to implement what the 222nd General Assembly directed us to do by providing a faithful, policy-driven way forward that will help the committee interpret and implement the denomination’s existing 1984 ‘Divestment as an Ethical Strategy’ criteria.”
MRTI developed the metrics over nine months of research and committee discussions including recent meetings with members from Fossil Free PC(USA) and Faithful Actions on Climate Change. Ministry leaders say the metrics will be the main focus of MRTI’s report to the 223rd General Assembly.
“These metrics will provide the necessary mechanism that will help MRTI differentiate between the companies in compliance with the General Assembly’s standards and those that are not,” said Kinard. “The ones that demonstrate a lack of significant change towards being in compliance will be subject to divestment recommendations at future General Assemblies.”
Kinard says climate change is an “enormously urgent challenge” that requires a wide variety of responses from faith-based individuals and institutions that value caring for Creation.
“While MRTI has aggressively pursued engagements with publicly traded oil and gas companies, both the Board of Pensions and the Presbyterian Foundation have made available options that allow for investors to apply environmental screens to their portfolios,” said Kinard. “We believe that these two tactics, MRTI’s engagement with oil and gas companies, and Presbyterian-related entities choosing to screen these companies out of their portfolios can and must co-exist in order for us to have the most effective impact on addressing climate change.“
“The key criteria included in the 222nd General Assembly’s directive to MRTI came from MRTI’s report to the GA and were based largely on the goals outlined in the COP21 Paris Agreement of late 2015,” said Rob Fohr, director of the church’s Office of Faith-Based Investing and Corporate Engagement. “We believe the environmental component of these metrics will help MRTI ascertain whether companies are making progress towards the ‘2-degree scenario’ included in the Paris Agreement as well as give the committee the ability to track progress on other social and governance issues which determine a company’s long-term sustainability.”
Fohr says the metrics were derived using a variety of sources including The Interfaith Center on Corporate Responsibility, S&P Global Ratings, the Task Force on Climate-Related Financial Disclosures, United Nations Human Rights, Ceres and the PC(USA) General Assembly.
The 222nd General Assembly (2016) issued a directive to MRTI to “pursue its focused engagement process on climate change issues with all corporations, particularly with those in oil, gas, and coal sectors…” and report in 2018 with recommendations if “significant changes in governance, strategy, implementation, transparency and disclosure and public policy are not instituted…” This tool aims to operationalize that directive and allow MRTI to better measure progress with companies it engages.
The metrics look at environmental, social and governance issues, including the following:
Environmental
- Climate-related risks and opportunities especially as they pertain to the 2-degree scenario outlined by the COP21 Paris Agreement
- Impact of climate-related risks and opportunities on the organization’s businesses, strategy and financial planning described
- Outlines how strategy can adjust for significant changes in demand for oil, gas and coal.
Social
- Policy commitment in place to respect human rights
- Company makes public commitment to prevent human trafficking and uphold human rights
- Company takes steps in terms of occupational health, safety and wellbeing and the advancement, protection and enforcement of human rights, including suppliers
Governance
- Company ensures adequate oversight of climate change risk and human rights issues
- Company engages constructively with public policymakers and other stakeholders
- There is evidence of broad oversight and transparency about the company’s lobbying activity and political spending, including activity by trade associations
Click here for more information about the metrics and how they will be used.
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MRTI implements G.A. policies by engaging corporations in which the church owns stock through correspondence, dialogue, voting shareholder proxies, filing or co-filing shareholder resolutions and occasionally recommending to divestment/proscription positions to the General Assembly for consideration based on the 1984 policy of the General Assmbly.
For more on “Divestment as an Ethical Strategy,” click here.
The 2017 GA Divestment/Proscription List is included here.
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