Top issues: get active — invest your time

No Sudan investments in PC(USA)-related portfolios

The General Assembly Council, at its September 2007 meeting, expressed its appreciation that the Board of Pensions, Presbyterian Church (U.S.A.) Foundation, New Covenant Trust Company and New Covenant Funds, a family of mutual funds sponsored by the Presbyterian Church (U.S.A.) Foundation, do not own securities in the 23 companies currently on the “Highest Offenders” ranking by the Sudan Divestment Task Force. Read more about this report.

Positive Movement

The Mission Responsibility Through Investment Committee (MRTI) announced forward movement on several issues assigned to the committee at its recent meeting on June 1-2 in Chicago.

Time Warner

Some of the most positive news involved the withdrawal of a shareholder resolution at Time Warner following successful dialogues with company management.  The resolution had pressed for a policy on employment and human rights standards for its contract suppliers.  Time Warner’s board approved its Ethical Sourcing Guidelines in February 2007.  As part of the dialogue agreement, MRTI committee member Lynwood Battle, trustee of the New Covenant Trust Company, addressed the annual shareholders meeting in May at the Warner Brothers Studios in Burbank, Calif.  Mr. Battle thanked the company for its public commitment to fair pay and benefits in its supply chain as represented by the board’s action and in references to the guidelines in the proxy statement and on the company’s Web site.

MRTI will continue the dialogue with Time Warner to assist the company in the implementation of its new policy.

Sudan

MRTI received a report on the research and advocacy of the Sudan Divestment Task Force that promotes a program of targeted divestment. This is very similar to the process of phased selective divestment of companies doing business in Sudan that the 2006 General Assembly mandated. The Task Force has identified 23 corporations it recommends for divestment, based upon the strategic nature of their involvement and the lack of company response to engagement. Representatives of the Board of Pensions and the Foundation/New Covenant Trust Company reviewed the list and reported that no stock was owned in any of the 23 companies and that given the nature of the companies, it is highly unlikely that their stock would be purchased by any of the investment managers.

Stock is held in 3–4 companies with which the task force recommends continued engagement. MRTI will focus on them. They include Total and Schlumberger.

A narrative report, to be developed for the September meeting of the General Assembly Council, will include a recommendation for publicizing the list of companies recommended for divestment by the Sudan Divestment Task Force.

Child Trafficking

MRTI, in cooperation with ECPAT-USA, has spent several months attempting to encourage Hilton Corporation to sign a corporate code designed to protect children from trafficking for purposes of sexual exploitation.  The code, developed by ECPAT, is supported by Unicef and the World Tourism Organization.  Hilton Hotels has been largely unresponsive on the issue to date, but in a letter received following the MRTI meeting, the company wrote, “Our soon to be issued Global Code of Conduct will specifically address issues of child exploitation.”  Hilton also noted that mandatory training of hotel personnel would be included.  There was no indication of a precise timetable or whether there would be reporting on the implementation. 

A Just Peace in Israel/Palestine

MRTI, along with its ecumenical partners, continues to be engaged with five U.S. corporations doing business in Israel/Palestine whose practices, policies or products may be contributing to the on-going violence or the human rights violations associated with the Israeli occupation of the Palestinian territories.  These engagements are a result of actions by the 2006 and 2004 General Assemblies. MRTI will continue conversations with the companies in an effort to persuade them to change their practices and policies in order to help bring a just peace and equality to the region.

MRTI is also working on pro-active investment to contribute to the economic stability needed for a lasting just peace.  Bill Saint, MRTI committee member and formerly with the World Bank, delivered a presentation to MRTI on the possibility of economic development in the Palestine.  He noted that while the economies of many Middle Eastern countries are stable, if not thriving, the situation is very grim in Palestine.  The Palestinians do not have full access to modern technology and partnerships and face sizeable risks in importing or exporting materials and products due to Israeli checkpoints and border restrictions.  The checkpoints also impact local transportation and inhibit the local economy.  Thus, in many ways, the Palestinian economy can be described as a “hostage” to Israeli economic and political policies. With a weak institutional government in Palestine and a legal structure that is also weak on contract enforcement there is little interest on a global level to invest in their economy until a political solution is reached.

Bill Saint gave some suggestions on how the PC(USA) might make a positive impact on the Palestinian economy, particularly in an effort to build upon Palestinian strengths such as a high literacy rate and levels of education, as well as an emphasis on internal markets.  He also recommended that any investment decisions would require on-the-ground assessment and monitoring which is very difficult at this point. 

MRTI will continue to discuss possible alternatives at future meetings.  This will include a focus on areas identified by the GAC for work: tourism, housing and crafts/consumer products.

Conversations with Presbyteries

Two companies being engaged by MRTI regarding Israel/Palestine, Caterpillar and Motorola, are headquartered in Illinois. The June MRTI meeting was held in Chicago to allow time for MRTI to meet with members of the PC(USA) presbyteries where the companies are located.

Great Rivers Presbytery is home to Caterpillar.  Members attending from Great Rivers expressed deep concern about the General Assembly’s policy and MRTI’s engagement with Caterpillar.  Their concerns ranged from effectiveness of the engagement to probable negative impacts in congregations with large numbers of Caterpillar employees if MRTI were to recommend to the General Assembly that the company be placed on the divestment list.

Three representatives from the Chicago Presbytery shared their work on Israel-Palestine issues, including some proposals on pro-active investment.

More Forward Movement

United Technologies, ITT Industries and Citigroup are the other companies being engaged.  A shareholder proposal at United Technologies on foreign military sales cited sales to Israel and other countries as examples of concern.  ITT recently paid a multi-million dollar fine for illegal sale of military technology indicating the need for tighter controls and policies.  MRTI will address this issue at the next meeting.  Citigroup has positively addressed issues related to financial transfers, and will also be talking about micro-credit lending with MRTI and other church groups.

Access to capital

MRTI also reported that as a result of their work, along with that of their ecumenical partners, both CitiGroup and JP Morgan Chase have substantially improved their reporting procedures as they pertain to access to capital for lower income people. 

How can you be a faith-based investor?

Check out the New Covenant Funds. These are four professionally-managed mutual funds sponsored by the Presbyterian Church (U.S.A.) Foundation. The funds screen companies that make money from tobacco, alcohol, gambling and firearms, as well as defense contractors.

Educate yourself on corporate social responsibility issues by visiting SocialFunds, a Web site with the latest in-depth news on socially-responsible investing and links to other informative sites.

Read about MRTI's current top issues:

• Environment
• Justice
• Peace

Environment — caring for God's Creation

Caring for all of God's creation is a core value of the Presbyterian faith. The bounty and beauty of the natural world as given to us in the story of Genesis remain our responsibility. We are called to be faithful stewards and to find ways to assure that those abundant gifts are shared by all of God's people.

The toxic pollution of air, soil and water, and global climate change are concerns of the Mission Responsibility Through Investment (MRTI) committee.

The committee engages in study and dialogue with companies whose work may have an impact on these issues. Industries may include petrochemical, paper and forest products, electronics, and semi-conductor and utilities.

Corporate reporting

When a faithful investor commits money to a particular corporation, it's important to know how that company has treated the earth. That's why MRTI has worked with its partners to encourage corporations to measure and disclose their environmental impact.

Similar to the widely accepted rules for financial accounting, corporations are now asked to account for their environmental performance through a systematic, accessible and public reporting of environmental management plans and results.

MRTI has joined with Ceres, a national network of investment funds, environmental organizations and other public interest groups working to advance environmental stewardship on the part of businesses. Through this coalition, the Ceres Principles have become a standard by which companies are measured. The principles are designed to increase environmental performance by companies, coupled with public disclosure.

\More than a dozen Fortune 500 companies have endorsed the Ceres Principles. General Mills and Time Warner are the most recent, along with nearly 50 medium and small companies. Other endorsers include Bank of America, Ford, General Motors, Nike, ITT Industries, Timberland and Coca-Cola. Dialogues about endorsing the Ceres Principles are underway with several other major corporations.

Ceres also encourages companies disclose their performance according to the Global Reporting Initiative (GRI) format.

Climate change

Faithful shareholders across the country are asking electric power companies to report on the potential impact of climate change upon the company's future fiscal viability. They also want the companies to report on plans for adjusting to future regulation of carbon dioxide and the cost effectiveness of reducing greenhouse gas emissions.

MRTI met with Cinergy, now Duke Energy, at its highest levels, and reached an agreement to produce such a report. Read more about this agreement.

MRTI subsequently met several times with Cinergy staff to help develop the report that was released in December 2004. Read the Air Issues Report.

Cinergy devoted its 2004 annual report to global climate change. MRTI was featured in the report for its work with the company and its perspective on the relation of climate change risks to shareholder value. Read the Presbyterian News Service story about this work.

MRTI's shareholder resolution with FirstEnergy was withdrawn when the company agreed to produce a climate risk report. It was released in December 2005.

Additional shareholder resolutions in 2005 dealing with climate received significant support:

The highest was at ExxonMobil, asking for a report on compliance with the Kyoto Protocol (28.3%), with the next one being a report on climate risk at Vintage Petroleum (25.6%). Other votes included disclosing climate data at ExxonMobil (10.3%); climate change expertise on board of directors at ExxonMobil (4.1%); fuel economy standards at General Motors (5.62%); climate risk at Bank of Nova Scotia (8.56%), Dominion Resources (8.3%), Health Care Property Investors (8.89%), Lennar Corporation (2.33%), and Ryland Group (7.9%). The fuel economy standards resolution with Ford was withdrawn.

Follow-up dialogues were held with several companies where proxy votes had been high in 2004: Apache (37.1%), Anadarko Petroleum (31.4%), Marathon (27%), ChevronTexaco (9.4%), Valero Energy (9.3%), Unocal (6.8%), and Ford (6.1%). In addition, MRTI withdrew a resolution at Nucor after the company agreed to update its corporate Web site with information about its achievements in reducing greenhouse gas emissions.

MRTI also participated in a dialogue between power companies, investors and environmental groups coordinated by Ceres that produced a report endorsing regulation of carbon, and other measures to address global warming.

What's next?

• Work with other religious shareholders to bring public awareness of ExxonMobil's efforts to challenge solutions to global warming.
• Continue MRTI's groundbreaking relationship with Duke Energy as the company updates its climate risk report and expands its efforts to reduce greenhouse gas emissions. Similar dialogues will continue with other energy companies.
• Continue to encourage companies to endorse the Ceres Principles, a national set of standards aimed at continuous environmental improvement on the part of businesses.
• Continue to encourage companies use the Global Reporting Initiative (GRI) to develop sustainability reports on the social, environmental and human rights aspects of their operations. Several companies, including Baxter International and General Motors, have pilot-tested the reporting.
• Monitor cleanup of polluted sites in the Clark Fork watershed in Montana that have resulted from mining operations. The British Petroleum subsidiary, Atlantic Richfield, is active in this area.

Justice — caring for God's people

Caring for all of God's people is a core value of the Presbyterian faith. We believe that the God revealed in the scriptures is One who showed special concern for those who most need help, particularly the poor, the hungry and those who are victims of injustice.

Social and economic justice, racial justice, and securing the rights of women are concerns of the MRTI because as Christians we are called to care for the poor, the exploited, the defenseless, and the weak.

The committee engages in a wide range of activities that use the church's investments as tools to help the PC(USA) and individual Presbyterians respond to God's demand to "do justice."

Community investing and equal access to capital

Increasing access to capital through community reinvestment and equal credit opportunity helps revitalize distressed communities.

That's why faith-based organizations, such as MRTI, urge depository-banking institutions to comply with federal laws that require them to meet the credit needs of their entire community, including low and moderate income families

Those same laws prohibit lenders from discriminating on the basis of race or color, religion, national origin, sex, marital status or age.

MRTI also supports innovative and effective lending programs in underserved areas and to underserved populations.

MRTI led the way in dialogues with Citigroup, J.P. MorganChase and Wells Fargo in discussion about lending to people of color and low-to-moderate income communities. MRTI also participated in the dialogues with Bank of America and Washington Mutual.

Supported resolutions with Republic Bank and Wells Fargo concerning payday loans. Payday loans are high interest loans where the person borrows against their next paycheck, often leading to high interest payments, and trapping the person in debt. The major banks sometimes finance payday lenders.

MRTI has pressed banks and other financial institutions to develop robust policies to guard against predatory lending.

What's next?

• Continue dialogues with Wells Fargo to help it meets its goal of being a leader in providing fair mortgages to low-to-moderate income communities and people of color. Wells Fargo is also initiating policies to strengthen safeguards against predatory lending. MRTI will continue its monitoring.
• Renew dialogue with J. P. Morgan Chase to discuss progress on the bank's commitment of reaching the industry lending average.
• Work with our faith partners in dialogues with National City and KeyCorp to explore their lending records with racial minorities in some markets.

Global corporate accountability

Caring for our neighbors is a global responsibility. Presbyterians believe that through God's grace we are called to be a "neighbor" to anyone in need; to show mercy and kindness to those who have been abandoned or mistreated regardless of geography or other barriers.

The business practices of U.S. companies in other countries, especially in terms of human rights, are a concern of MRTI because, as Christians, we consider all of God's people to be our neighbors.

Work in this area initially focused largely upon the operations of U.S. companies along the U.S./Mexico border.

The MRTI also has looked into operations in "export processing zones" in other countries, particularly in Central America and the Caribbean.

MRTI has supported the Maquiladora Standards of Conduct that address environmental contamination, health and safety of workers, standard of living for workers and community infrastructure. The Standards were issued by the Coalition for Justice in the Maquiladoras (CJM).

MRTI has expanded its focus to cover global operations, particularly in China, Bangladesh and Jordan, in cooperation with the National Labor Committee.

MRTI co-filed a resolution requesting a sustainability report by Wal-Mart. The resolution received 19.6% of the proxy vote.

Participated in dialogues about human rights policies with various companies such as Unocal, Occidental Petroleum, Chevron and Hasbro.

Following a vote of the Presbyterian General Assembly in 2004, MRTI initiated a process of phased, selective divestment of companies doing business in Israel. MRTI developed a set of six criteria focused on General Assembly concerns about violence against Palestinians and Israelis, the occupation, Israeli settlements in the occupied territories, and the Separation Barrier.

What's next?

• Continue to promote the Maquiladora Standards of Conduct in dialogues with companies using contract suppliers.
• Work for legislation to provide protections for workers in sweatshops.
• Support efforts to engage Coca-Cola concerning possible human rights violations at the bottling plants in Columbia where union leaders have been targeted by para-military organizations.
• Continue work, as directed by the PC(USA) General Assembly in 2004, on a process of phased, selective divestment from multinational corporations doing business in Israel that are detrimental to the peace process and the common good of Israelis and Palestinians. Read more about this work.

In addition, MRTI is faithfully involved in these justice issues:

Access to health care

MRTI responded to a request from the Social Responsibility Committee of the Presbyterian Board of Pensions by joining in dialogues with pharmaceutical companies on providing affordable drugs for HIV/AIDS, malaria, TB and other diseases to developing nations.

In 2004 and 2005, MRTI co-filed shareholder proposals requesting a report on how the company was addressing the pandemic with Abbott, Merck and Pfizer. Plans include participating in dialogues with those companies.

Corporate governance

MRTI is joining with other religious shareholders to explore new strategies to engage corporations on governance standards, executive compensation and transparency.

MRTI has recommended that shareholders vote in favor of resolutions raising the issue of executive compensation review, and reports on the differential between top executives and hourly employees.

MRTI will continue educational efforts on the issues, particularly executive compensation.

Employment practices

In partnership with other faith groups, MRTI will continue its work for Equal Employment Opportunity disclosure and diversity on boards of directors and in top management. MRTI will support these efforts through proxy voting.

Rural farm crisis

MRTI is a participant in the Agribusiness Accountability Initiative, co-sponsored by the National Catholic Rural Life Conference and the Center of Concern.

Peace — seeking peace and pursuing it

"Peace is more than the absence of war, more than a precarious balance of powers. Peace is the intended order of the world with life abundant for all God's children. Peacemaking is the calling of the Christian church, for Christ is our peace who has made us one through his body on the cross."

— From Peacemaking: The Believers' Calling, 1980

Violent video games and gun sales

MRTI and its partners encourage retail companies to restrict or end sales of handguns and other weapons, and to make sure that any "toy" weapons cannot be confused with real ones.

In addition, the religious community has focused new attention on video games containing violence, racial hatred, and sexual abuse by talking to retailers about taking steps to prevent the sale of video games to children or young teens when the games possess mature or adult labels.

In 2004 and 2005, MRTI's religious partners met with the trade association of retailers about selling practices, and the adequacy of ratings. Discussions will continue with the Entertainment Software Ratings Board (ESRB).

MRTI also promoted a "Don't Buy Violent Video Games" message during the holiday season for 2005 and 2006 in conjunction with other religious groups.

Read more about the issue of violent video games and how you can help.

MRTI will continue to participate in efforts to enhance the rating standards for video games that presently are self-regulated by the industry. This will include meetings with the ESRB.

Military-related investments

Presbyterians believe that a faithful life means devoting one's spiritual and material resources to peacemaking. That includes using our investments to promote peace.

Briefly stated, the PC(USA) does not invest in some corporations engaged in military-related production, especially those that produce weapons leading to mass or indiscriminate injury and/or death to civilians. Read the church's guidelines from the 210th General Assembly.