Fossil Fuel Divestment and Other Strategies: A United Church Funds Report
After the passing of the 2013 General Synod Resolution Urging Divestment–Along With Other Strategies–From Fossil Fuel Companies to Address Climate Change, United Church Funds has undertaken a number of steps to fulfill its commitments. Through recent actions, we have made new strides forward.
First, United Church Funds continues use its unique position as a faith-based investor to respond to climate change. We’ve recently signed the Climate Action 100+, a five-year initiative led by investors to engage with the world’s largest corporate greenhouse gas emitters to improve governance on climate change, curb emissions and strengthen climate-related financial disclosures.
Second, on behalf of our clients, we’ve recently updated the exclusionary screens that restrict the companies in which we can invest in two ways, broadening our human rights screens as well as our environmental screens. We’ve added an industry-agnostic environmental screen which will remove from our portfolios companies that have continued poor environmental performance. This is in addition to the standing screens on companies that source oil from tar sands and coal producers.
Third, we have continued to offer our Beyond Fossil Fuel Funds and are proud to have celebrated their third birthdays with terrific investment performance and boast being free of companies that have fossil fuels reserves. Through its Beyond Fossil Fuels Fund, United Church Funds offers both a global equity fund and a balanced fund (which includes equity and fixed income investments). These investments are free of companies exploring for or producing fossil fuels. As with all separately managed portfolios at United Church Funds, this pair of funds utilizes shareholder action as a means to compel corporate improvement and excludes companies in morally unacceptable industries or companies with unacceptable practices.
Fourth, in addition to the commitments expressed through divestments, our values are also expressed through our investments. Under the direction of Dave Klassen, our Chief Investment Strategist who is very committed to social and environmental issues, United Church Funds fixed income fund owns $24,685,000 green or social/impact bonds. The Beyond Fossil Fuels Balanced Fund owns $5,460,000 green or social/impact bonds.
Finally, United Church Funds committed itself to the Paris Pledge, welcoming the “adoption of a new, universal climate agreement at COP 21 in Paris, which is a critical step on the path to solving climate change. We pledge[d] our support to ensuring that the level of ambition set by the agreement is met or exceeded.”
Katie McCloskey is the Director of Social Responsibility for United Church Funds.