Responsible investment

Responsible Investing

MRTI meets in LA, removes Citigroup from list of concern about dealings in Israel and Palestine [11-27-07]

Citigroup Inc. has been taken off the list of multinational corporations the Mission Responsibility Through Investment Committee (MRTI) of the Presbyterian Church (U.S.A.) is engaging to ensure their business dealings in Israel and Palestine comply with denominational peacemaking policies.

The unanimous decision was made during MRTI’s Nov. 8-10 meeting in Los Angeles, and takes the number of companies the group is talking with down to four — ITT Industries, based in White Plains, NY; Motorola Inc., based in Schaumburg, IL; United Technologies Corp., based in Hartford, CT; and Caterpillar Inc., based in Peoria, IL.

The report from Presbyterian News Service >>

A later report from the meeting describes the committee’s planned work for 2007-08, focusing on issues of corporate accountability and access to capital.

You might also want to look at the group’s detailed work plan for the coming year.

MRTI wants help pressuring Hilton Hotels to meet, talk

Hope is that global lodging giant will help fight child sex trafficking [2-15-07]

Presbyterian News Service reports that the Mission Responsibility Through Investment (MRTI) committee, which monitors PC(USA)-related investments to ensure they are socially responsible and consistent with General Assembly policies, is calling on agencies and partners of the denomination to join forces with the public to demand that Hilton Hotels Corp. take steps in combating child sex trafficking spurred by the tourism industry.

The committee also dealt with the Sudan/Darfur crisis.

The rest of the story >>

Somplatsy-Jarman offers a review of MRTI’s work in 2006|
[2-15-07]

During the Christmas season, the Rev. William Somplatsky-Jarman, who serves as the Associate for Mission Responsibility Through Investment in Louisville, sent a letter to friends and supporters of MRTI, reviewing their work through the past year, and encouraging people to give extra support for their vital and demanding work.

His letter:

Christmas 2006

Greetings to all of you during this holy season. As a former member and/or supporter of MRTI, your continued interest in the work of the committee, and support for our efforts means a lot to me. I am sure the current MRTI members feel the same way. Here is some news about MRTI’s engagements during this past year.

MRTI’s Work Affirmed at GA

MRTI’s work was prominent at the General Assembly. The committee’s diligence and transparent process for implementing phased, selective divestment related to Israel and Palestine was affirmed as the appropriate way to insure that the church is only invested in corporations engaged in peaceful pursuits. MRTI’s advocacy with pharmaceutical companies on availability of affordable HIV/AIDS medicines was lauded. The GA also assigned MRTI the challenge of phased, selective divestment related to Sudan.

MRTI continued to build an interfaith coalition on Israel-Palestine issues, and now we have the major Protestant denominations plus several Roman Catholic organizations involved in corporate engagement. MRTI also met with Citigroup and ITT Industrieson this subject.

New GAC Mission Goals

As you may know, the General Assembly Council adopted new mission goals and objectives for the near future. Pursuit of peace and eradication of poverty are the two objectives guiding our work as MRTI moves into a new Social Justice and Peacemaking group. MRTI has already launched itself into this effort with renewed and focused attention on human rights and sweatshops. Advocacy with Coca-Cola on Columbia, and Wal-Mart, Time Warner, Nordstrom’s and J.C. Penney on sweatshops continues. New this year religious shareholders is the issue of child prostitution and trafficking. MRTI is taking the lead with Hilton Hotels in a dialogue on employee training and corporate policies to insure that a company’s property is not used for such illicit purposes. Others are meeting with cruise lines, travel companies and other hotel chains.

Dialogues with J. P. Morgan Chase, Citigroup and Wells Fargo revealed continued progress in lending to low to moderate-income borrowers, and people of color. Don Kuespert, MRTI liaison to ICCR, provides valuable leadership in engagement with theEntertainment Software Ratings Board about video game violence and children.

Climate Change Remains High on MRTI’s Agenda

Climate change continues to deserve our best efforts. I just returned from the UN climate change negotiations where the nations struggle to find the political will to adopt effective policies to reduce greenhouse gas emissions, or to fund programs adequately that will assist developing countries adapt to the changing climate. 2007 will see the fourth assessment on the state of the climate by the Intergovernmental Panel on Climate Change, and the projections do not look reassuring. Effective advocacy with both governments and corporations is needed, and MRTI is in the thick of it. Through our work with the Investor Network on Climate Risk, MRTI joins with institutional investors and public pension funds to engage companies to become much more energy efficient. Urging companies to join with the World Business Council for Sustainable Development or the Business Council for Sustainable Energy is more important than ever.

Your Help Is Needed

All of this work strained MRTI’s physical and financial resources. Please keep MRTI in your prayers, and speak to other church members about it important work. Further, financial support from former MRTI members helped keep us within budget, but we know 2007 will require additional resources in order to address all the issues on MRTI’s agenda. If you can make a contribution, you will help keep MRTI moving forward. Any contribution should be made payable to the Presbyterian Church (USA), and sent it to my attention. I will make certain it is credited to MRTI’s account.

God’s blessings on you and your family,

Rev. William Somplatsky-Jarman
Associate for Mission Responsibility Through Investment

Holy Grail Found

Absolute, definitive proof that responsible companies perform better financially ...

So socially responsible investing pays off
[1-26-05]

By Marjorie Kelly

OK, yes, it's true that researchers don't speak this way: They'll never say "absolute, definitive proof" of anything has been found - not even that the sky is blue. Theirs is the language of positive correlations, statistical significance, and other somnolent phrases. I'm no statistician. I am instead someone who's observed the socially responsible investing (SRI) field for 17 years, and in that time I've seen countless theorists attempt to scale the Everest of SRI, reaching for the summit of certainty: Do socially responsible companies perform better financially? The answer has long been the statistical Holy Grail: eagerly sought, ever out of reach.

I'm here to announce the search is over. The evidence is in. And even the statisticians are saying it's conclusive. Social and environmental responsibility does go hand in hand with superior financial performance - that's the finding of two "meta-studies" in recent months.

A meta-study is distinguished by being a study of studies - it rolls up years of research by various theorists, using various lenses, studying different industries, different time periods, different definitions of social responsibility, and so on. This lends such studies an outsized authority.

The most impressive of these is the rigorous and groundbreaking study that in October won the Moskowitz Prize of the Social Investment Forum, awarded for outstanding research in social investing. It was conducted by Marc Orlitzky of the University of Sydney, Australia, and by Frank Schmidt and Sara Rynes from the University of Iowa. Their meta-analysis, "Corporate Social and Financial Performance," was a study of 52 studies over 30 years. They thus reviewed in one fell swoop three decades of attempts to answer the perennial question. And they proved that a statistically significant association between corporate social performance and financial performance exists, which varies "from highly positive to modestly positive."

The researchers offered ideas on what might be behind this correlation. One theory is that corporate social responsibility (CSR) is an indicator of good management - a kind of flag saying sophisticated, cutting-edge managers are at work. A second theory sees the causation going the other way: financially successful firms have more resources for social activities. The study supported both theories. In a virtuous cycle, "financially successful companies spend more because they can afford it, but [corporate social responsibility] also helps them become a bit more successful."

It's not rocket science to see why CSR firms perform better financially. CSR helps companies develop new competencies because it engages employees organization-wide, calls for a "forward-thinking managerial style," and leaves responsible firms better prepared for "external changes, turbulence, and crises," study authors wrote. It builds reputations and enhances relations with bankers and investors. It helps firms attract better employees and increase employee goodwill. It helps firms run better.

In November 2004, just a month after the Moskowitz Prize was announced, a second major meta-study was released, commissioned by the UK Environment Agency. Its resounding conclusion was similar: Companies with sound environmental policies and practices are highly likely to see improved financial performance. The analysis looked at 60 research studies over the last six years, finding that 51 of them (85 percent) showed a positive correlation between environmental management and financial performance. Again, we have rigorous proof that good environmental management delivers financial benefits.

This second study, "Corporate Environmental Governance," was conducted by Innovest Strategic Value Advisors, an international social research firm with over $1 billion in funds it sub-advises. The Innovest report offered many anecdotes of superior financial returns being paired with good environmental management:

	The Winslow Green Growth Fund has consistently outperformed its peer growth funds, with average annual returns above the benchmark index by 20 percent, 6 percent, and 11 percent over one, three, and five years respectively.
	Forest and paper products companies with above-average environmental performance had 43 percent better share-price performance over four years than those with below-average environmental ratings.
	In the oil and gas sector, the top environmentally rated firms outperformed laggards in share price by 12 percent over three years.

Though the evidence is clear, not everyone will believe it. As Matthew Kiernan, the CEO of Innovest, commented in the UK Environment Agency report, the misconception remains that tracking environmental performance "is at best a waste of time for investors, and at worst actively harmful to financial returns." Indeed, when the Environment Agency asked analysts to spontaneously name the factors they considered in investing, just 3 percent mentioned environmental factors.

While doubters remain, they may unwittingly create opportunity for SRI investors. Knowing that responsible companies outperform, savvy investors have a head start in locating future winners before the broad market does. The future of SRI may lie in searching for undiscovered indicators that lead to superior stock selection. This has already been done, for example, by McBassi & Co., which is creating a niche for itself by buying stocks in companies that invest the most in human capital. Its portfolio of such firms created in late 2001 has outperformed the S&P by nearly 7 points over two years (see Business Ethics, summer 2004).

As some folks pretend the jury is still out, we might liken their stance to "doubts" over global warming. What they're disputing is not a scientific question but an economic worldview. Statistically speaking, the perennial question has been answered. CSR does indeed go hand-in-hand with financial outperformance. Thirty years and 112 studies later, the Holy Grail has been found.

Click here for the original article.

Reproduced with permission from Business Ethics, PO Box 8439, Minneapolis MN 55408. www.business-ethics.com. To request a free sample of the issue e-mail FreeSampleW04@business-ethics.com

MRTI committee urges PC(USA) to dump stock in oil company exploiting war-ravaged Sudan

Members explore teeming settlement on Arizona-Mexico border

by Evan Silverstein, Presbyterian News Service

TUCSON, AZ -- 25-January-2001 -- A Presbyterian Church (USA) committee is recommending that the denomination's General Assembly urge church entities not to own stock in one of the world's largest oil companies, Talisman Energy Inc., of Calgary, Canada.

Talisman drills for oil in Sudan and is a financial partner of the Sudanese government, which has made the oil fields of south-central Sudan a major battlefield in the African nation's 17-year-old civil war.

During a Jan. 20 meeting in Tucson, the Committee on Mission Responsibility Through Investment (MRTI) unanimously approved a recommendation that Talisman be put on the PC(USA)'s divestment list.

Spokespersons for the committee said Sudan's Muslim government is a genocidal regime that enslaves women and children, bombs hospitals, and has been responsible for the starving deaths of more than a million people.

Foes of the Sudanese regime contend that Americans who invest in Talisman and other oil companies that do business in Sudan unwillingly become supporters of genocide, because the oil fields pump millions of dollars into the government's war effort. The MRTI committee said its action was meant to keep the PC(USA)'s name from being associated with the bloody war.

If this summer's 213th General Assembly in Louisville adopts the recommendation, PC(USA)-related investing entities would effectively be barred from buying or holding Talisman stock. Last year's GA in Long Beach, CA, called upon MRTI to monitor the situation in Sudan and decide whether divestment from Talisman is appropriate.

"In one sense the question is moot and in another sense it is not," said the Rev. William Somplatsky-Jarman, associate for MRTI. Somplatsky-Jarman noted that the Presbyterian Church (USA) Foundation and other church stockholders have already liquidated their Talisman shares.

"'A, we could always buy it back if it's not on the list," he said. "B, there are other entities in the church that may have (Talisman stock). And C, there is certainly a vocal, if not very large, constituency in the church (of people) very concerned about the Sudan that supports this kind of recommendation."

By divesting in Talisman, the world's third-largest oil company, the PC(USA) is saying that it will not have its money spent for such horrific uses, MRTI members said. Complaints about the government's conduct of the war prompted U.S. sanctions last year against Sudan's state-owned oil enterprise, Sudapet Ltd.

The sanctions also bar U.S. companies from doing business with a joint venture between Sudapet and three private companies -- China National Petroleum Corp.; Malaysia's state-owned oil company Petronas; and Talisman, Canada's largest oil producer.

Chevron discovered oil in Sudan 20 years ago. Talisman Energy, which recently took over the franchise, has helped the country develop a major oil capacity. A 1,000-mile pipeline running from the interior to Port Sudan is fully operational, pumping at least 100,000 barrels per day. The Sudanese government has targeted villages and civilians to clear the area around the pipeline in southern Sudan, according to Somplatsky-Jarman, and has reportedly spent billions of dollars worth of arms from several countries, using future oil revenues as credit.

"(There have been reports) that the Sudanese military used oil-company airstrips to facilitate its campaign," Somplatsky-Jarman said. "With the exception of some nominal charitable ventures by the oil companies, it is clear that the people of the south have not benefited from the pipeline. In fact, they have been victimized by it."

The civil war, which has cost more than 1.5 million lives since 1983, pits Khartoum's Islamic government against mainly Christian and animist rebels in the south.

The membership of MRTI includes representatives from the Board of Pensions and the Presbyterian Foundation, as well as other advocacy and advisory groups -- the Advocacy Committee on Women's Concerns, the Advocacy Committee on Racial Ethnic Concerns and the Advisory Committee for Social Witness Policy.

The Foundation, a former Talisman shareholder, sold its shares recently, for economic reasons, although the resolution approved by last year's GA asked the self-incorporated church entity to maintain a minimal ownership position to permit shareholder involvement. Similar sell-offs involved the General Board of Pensions of the United Methodist Church and Christian Brothers Investment Services, Somplatsky-Jarman said.

MRTI is not the only group opposed to the presence of foreign oil companies in Sudan, the largest African nation geographically. The New Sudan Council of Churches recently called for foreign oil producers to leave the country. A national campaign advocating divestment has started targeting other major Talisman Energy shareholders, the largest of which is Fidelity Investments. This indirectly impacts the PC(USA), because the Board of Pensions (BOP) recently switched to a Fidelity-managed retirement savings plan, Somplatsky-Jarman said.

Participants in the pension program may choose among 10 investment vehicles, two of which are funds managed by Fidelity that do not own Talisman. The BOP recently added the Canadian oil producer to its own divestment list.

It is unclear which Fidelity fund owns Talisman stock. Fidelity has told the Board of Pensions that it is not held by any of the other eight plans available to BOP plan participants. However, part of the national campaign is aimed at getting individuals and institutions with investments in Fidelity to pressure the company to sell its Talisman stock.

If Fidelity declines, investors will be urged to take their money elsewhere. A small but vocal group within the PC(USA) actively supports the divestment campaign.

MRTI will also verify General Electric's position on involvement in future land-mine production. The committee wants GE to be among corporations taking a moral stand by refusing to supply any parts or information useful in mine and cluster-bomb production. MRTI is corresponding with the company about possible future production of such devices. In the past, GE has declined to take such a position, and therefore is on the GA's divestment list.

MRTI also promotes shareholder engagement through proxy voting, dialogues with executives and filing shareholder resolutions on issues to which the GA has spoken.

Among the shareholder engagements reviewed and supported by MRTI at this meeting was a request that AT&T Corp. officials prepare a report by May on the communication giant''s policies regarding involvement in the pornography industry and an assessment of the potential financial, legal and public-relations liabilities. The resolution was prompted by shareholder concerns after AT&T recently expanded the availability of sexually explicit content on its digital cable system through an agreement with the Hot Network, an adult cable channel.

The committee also approved voting proxies for separate resolutions requesting that the boards of directors of Coca-Cola Enterprises and Hershey Food Corp., take steps to phase out the selling and manufacturing of genetically engineered crops and organisms, unless long-term safety testing proves that they are not harmful to humans, animals or the environment. Both resolutions ask that reports on both companies be provided to shareholders by Aug. 1.

In a related action, the committee approved a resolution asking officials of the Kroger Co. to adopt a policy of labeling and identifying all products sold under its brand names or private labels that may contain genetically engineered crops or organisms unless testing has indicated they are not harmful to humans, animals or the environment. The committee requested a report from Kroger on the matter by Aug. 1.

The committee met at a facility operated by BorderLinks, a bi-national ecumenical program that provides educational and nutritional aid to people living along the Arizona-Mexico border.

Also during the meeting, the MRTI committee:

Elected Jim Newland of Northeast Georgia Presbytery as its chair and Adele Langworthy of Los Ranchos Presbytery as vice chair.

Visited the Border Patrol station in Nogales, Ariz., before crossing into Nogales, Mexico, where MRTI committee members had a BorderLinks-sponsored tour of the city, meeting residents, officials and clergy and visiting a maquiladora factory. They also visited a free-lunch program at Casa de la Misericordia (The House of Mercy), and spent the night at the facility (see note #6348).

The group met with Francisco Trujillo, director of the Nogales Sonora Chamber of Commerce, who is leaving that position to work as BorderLinks' Mexican director.

The committee members also visited with Roman Catholic Sisters from the Missionaries of the Eucharist, who joined the BorderLinks staff in 1998 and work with parish priests in Nogales to develop church-based Bible-study groups; met with families in Colonia Las Torres, a squatters' settlement on the edge of Nogales; split into small groups to conduct a "market-basket survey" of food prices and cost of living in the city; and joined a Nogales Presbyterian church for dinner and worship.