UM Pensions and Energy Investments

By Walter Fenton

Screen Shot 2016-02-19 at 2.33.39 PMFossil Free UMC, a Seattle based organization, has criticized a video prepared by the  General Board of Pension and Health Benefits (GBPHB) of The United Methodist Church. The video features the board’s general secretary, Barbara Boigegrain, who encourages General Conference delegates to reject petitions calling on GBPHB to divest all holdings in major oil, gas, and coal companies like Anadarko Petroleum, James River Coal Co., and ExxonMobil.

The board manages a portfolio of approximately $20 billion, and a reported $600 million is invested in over 100 oil, gas, and coal companies.

The GBPHB video was specifically prepared for General Conference preview gatherings for delegates in Africa, Europe, and the Philippines. In a calm and direct address, Boigegrain, who has served as GBPHB’s general secretary for over 20 years, makes an informative and compelling case for why GC delegates should vote against calls for divestment from an entire sector of the economy.

In her four-minute address, Boigegrain reminds delegates of GBPHB’s mission to grow the pension fund for the sake of clergy and lay employees, while also investing in ways that further the church’s values. She notes there are times when the board has determined it was necessary to divest from certain companies. However, like most large pension investors, GBPHB believes remaining at the table is the best way to both maximize returns for pastors and lay employees, and influence various corporations.

In a blog post from Fossil Free UMC, the Rev. Jenny Phillips takes issue with Boigegrain’s video and GBPHB’s investment in oil, gas, and coal companies.

“The video explicitly instructs central conference delegates how to vote and how not to vote on legislation related to socially responsible investment guidelines,” writes Phillips. “This is wrong.”

Phillips goes on to argue that the GBPHB video “takes advantage of … power perceptions” by “authoritatively instructing central conference delegates how to vote rather than honoring their freedom to make the decisions they believe are best for the church’s witness in the world.”

She also maintains that GBPHB “fails to acknowledge the risk” of remaining invested in what she claims are “volatile, unsustainable and immoral companies” that “diminish the church’s moral voice on climate [change].”

All of these claims are a tad overblown. Phillips hears Boigegrain’s video in the most jaundiced of terms when she portrays her as instructing central conferences delegates how to vote. Boards and agencies, bishops, pastors, laity, advocacy groups, and yes, general secretaries of the UM Church’s board and agencies often tell delegates how to vote on this or that petition. We expect them to do this. It is no abuse of her power for Boigegrain to encourage delegates not to vote for petitions she and GBPHB believe will prove harmful to the pension fund.

Surely Phillips knows this is the case. Right next to her press release on Fossil Free UMC’s website is a list of organizations and annual conferences who support “legislation to screen fossil fuels from church investment.” At the very top of the list is the UM Church’s General Board of Global Ministries (GBGM). If it’s fine for GBGM to advocate for divestment, surely it’s acceptable for GBPHB to oppose the strategy.

Besides, Phillips seems to forget that GC delegates, no matter where they are from, fully understand the important political process they are a part of when they attend the General Conference. No delegate is so naïve as to think that because a general secretary, an advocacy group, or a bishop encourages them to vote a particular way they are therefore required to do so. All the delegates were elected by their peers because they presumably demonstrated their faithfulness to the church and an ability to exercise good judgment when considering how to vote on contentious matters before the church.

Phillips’ sweeping claim that all oil, gas, and coal companies are “volatile, unsustainable and immoral” is also lacking in nuance.

If she were referring to the energy sectors’ stock prices when she used the term “volatile,” she would get no argument from its CEOs and investors. The past year or more has been a wild ride for the sector, but that’s largely the nature of commodities. When demand for the product is high, the stock price typically soars, and when demand is low, the stock price sinks. The folks at GBHPB are certainly aware of volatility in the marketplace.

But if Phillips is calling the board to divest simply because the energy sector’s stocks are volatile, that would be a terrible strategy. Markets are inherently volatile. It’s the very reason the UM Church has a board and investment professionals dedicated to managing its pension funds.

While no one doubts the sincerity behind the beliefs of Fossil Free UMC, it is wise to question the premise that oil, gas, and coal companies are unsustainable.

Finally, the United Methodists who invest in and work for some of these companies would beg to differ with Phillips’ claim that they are “immoral.” Many of these United Methodists give faithfully and generously to their local UM Churches and so to the denomination as a whole. Should the church refuse to accept all earnings on their investments and the tithes and gifts they give from their salaries? How far should we go in separating the church from “immoral” companies and people?

Calling for the total divestment from an entire sector may feel good, but it is neither necessary nor wise for the church to do so.

Walter Fenton is a United Methodist clergyperson and analyst for Good News

Comments

  1. Robert W. Poston says

    Keep it as is.

  2. Judy McMickens says

    It would be in the best interests of the UMC to first reject the divestment of funds from companies that do business with Israel. While “climate change” ( formerly known as “global warming” before that term was debunked) is a fallacy, the blessing of Israel will bring blessings upon the church. The UMC, which is steadily losing members and money, could certainly use some favor and it could be that the pension fund investments would show more success than they have recently.

  3. Fossil Free UMC is a Political entity that is advocating an unintended consequence to all the people who would benefit from the Health and Pension fund. A sound system takes years to build. A sound system has people in charge who are aware of stocks, bonds, investments, etc. and the risks that are involved. It would take a long range plan of phasing out the companies indicated and to replace that amount of earnings with viable companies for the same yield to the program. Beneficiaries would be adversely harmed if this was permitted. Each beneficiary has a stake in this program as it is their money that is morally and contractually owed to them. The U.M.C. is losing 308 members a day now. Our Church will be unsustainable in a few years at this continued rate or more. Membership decline ( apportionment payers) plus loss to the Health and Pension fund from investments equals a terrible disaster, looking for a time to happen. Fossil Free UMC wake up and smell the coffee or consider the “kool aid” you’re asking the Conference and beneficiaries to swallow.

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