MRTI outlines environmental divestment standards

PC(USA) responsible investment committee will recommend companies for divestment/proscription list

by Rich Copley | Presbyterian News Service

Rob Fohr, director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church (U.S.A.), speaks during a meeting of the Presbyterian Committee on Mission Responsibility Through Investment in Romulus, Michigan, in June. (Photo by Rich Copley)

LOUISVILLE — The Presbyterian Committee on Mission Responsibility Through Investment (MRTI) voted at its fall meeting to recommend any companies that fall into the lowest tier of its guideline metrics for environmental compliance be added to the General Assembly’s proscription/divestment list.

This recommendation will be included in MRTI’s report to the Presbyterian Mission Agency Board early next year, to be forwarded on to the 224th General Assembly in June.

“This step from the committee provides a clear threshold for companies,” said Joseph Kinard, chair of MRTI. “If they are performing poorly in MRTI’s Guideline Metrics, which include environmental, social and governance evaluation, MRTI will recommend those companies be added to the General Assembly’s Divestment/Proscription list.” The list also recommends companies for divestment or proscription for involvement in military-related production, tobacco, human rights violations, and operating for-profit prisons.

The metrics were the result of a mandate from the 222^nd General Assembly in 2016 to develop a set of standards that companies would be evaluated on for their response to climate change.

The metrics also take into account social and community impact such as, “Do operations distress neighboring communities and/or historically marginalized/oppressed communities (often communities of color)? If so, what steps are taken to mitigate those impacts?”

In July, the committee released its first survey based on the new criteria. It showed three companies in red, the lowest tier of scoring, meaning they scored between zero and 100 on the scale, which has a top score of 240. The companies in that category, “may have (a) poor record of shareholder engagement, poor record on environmental, social and governance (ESG) issues. Company may or may not acknowledge importance of ESG issues,” according to the Guideline Metrics document.

The three companies in red were Marathon Petroleum (91), Phillips 66 (92), and Valero Energy (73).

See the results of the Guideline Metrics survey here.

The next survey will be in December. The evaluations are based on public disclosures, reports and filings, third-party evaluation from Sustainalytics, and the quality of MRTI’s direct engagement with companies.

“We’ve seen some movement in the lowest tiers, both positive and negative,” said Rob Fohr, Director of Faith-Based Investing and Corporate Engagement for the Presbyterian Church (U.S.A.). “The full picture will come when we update the Guideline Metrics.”

He also said it is possible companies that rated higher in the last survey may fall into the lower tier.

MRTI committee members are carefully reviewing and following the General Assembly policy “The Divestment Strategy: Principles and Criteria” . This policy requires extensive engagement. However, if a company refuses to engage or if engagement reaches a point where it will no longer yield any outcomes, according to the policy, phased selective divestment will be the next step.  There are others in the denomination that call for complete divestment from fossil fuel producers, such as Fossil Free PCUSA, a parachurch organization.

Fossil Free is bringing its own overture to the 224^th General Assembly, which commends MRTI for its efforts but will “call on the PC(USA), The Presbyterian Foundation, the Board of Pensions, and Presbyterian Investment and Loan Program to divest from the fossil fuel industry, using the Carbon Underground 200 and the S&P Global Industry Classification Standard’s list of publicly-traded companies engaged in coal, oil and gas exploration, extraction, and production as the criteria to identify which companies are considered to be fossil fuel companies.”

The overture acknowledges the role of fossil fuels in making the world a better place, but adds, “the time of their usefulness is now over.”

The overture says, “We cannot continue to invest in the past while at the same time investing in the future.”

In 2018, the group partnered with Presbyterian Peace Fellowship in a march from the Presbyterian Center in Louisville to the site of the 223^rd General Assembly in St. Louis to call for total divestment from fossil fuels.

“We are experiencing a climate crisis,” Kinard said. “Within the denomination most of us can agree comprehensive, urgent action is needed.

“Where we disagree is how to take that action. We are seeing some real movement from companies within the Climate Action 100+ while others refuse to change business practices and to adequately recognize their role in the climate crisis.”

The Climate Action 100+ is an investor initiative that represents more than $34 trillion of assets under management, or one-third of the world’s investment capital. The initiative’s goal is “to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change,” according to its website.

As MRTI steers toward a report that will likely call for some companies to be put on the divestment/proscription list, Fohr says he is working with presbyteries where companies are based to help them understand their position and prepare them.

“MRTI committee members and staff have been in regular contact with mid-council leaders and others from communities where the lowest performing companies are headquartered. Any decision to divest is not taken lightly,” Fohr says. “We’ve communicated and continue to communicate the rigorous evaluation and process MRTI has undergone as committee members consider possible divestment recommendations.

“I think it is reasonable that some in the church will not like the outcome of a potential divestment recommendation, however, MRTI members and staff can do our best to show them that the process has integrity and is an appropriate application of General Assembly policy.”

MRTI implements the General Assembly’s policies on socially responsible investing (also called faith-based investing) by engaging corporations in which the investing bodies of the church own stock. This is accomplished through correspondence, dialogue, voting shareholder proxies and recommending similar action to others, and occasionally filing shareholder resolutions. The General Assembly’s investment policy identifies specific concerns that MRTI is to promote: pursuit of peace; racial, social and economic justice; environmental responsibility; and securing women’s rights. MRTI prioritizes issues on these concerns from requests by ecumenical partners, mid councils and congregations.

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