Hancock’s Endowment Committee Responds to the UCC Fossil Fuel Resolution

 

UCC symbolIn July 2013 the 29th General Synod of the UCC approved a resolution on the subject of fossil fuel submitted by the Massachusetts Conference.  In areas of relevance to the Permanent Endowment at Hancock Church and its investments, the resolution called for UCC churches to “reduce our complicity with the fossil fuel industry,” to “seek out fossil fuel free investment vehicles,” and otherwise to “recognize the moral mandate for humanity to shift to a sustainable energy plan.”  The approved resolution was actually a compromise from the original, which recommended full divestiture.

Persuaded that reducing fossil fuel holdings and favoring sustainable energy alternatives was the prudent plan of action, the Permanent Endowment committee voted to limit Hancock’s fossil fuel investments to the extent feasible while continuing to uphold its fiduciary responsibilities. We have already acted by fully divesting from those three funds (about 9% of our portfolio) with the highest concentrations of fossil fuels and related industries. These were replaced with one broader basket commodity fund and two greener, natural resource and alternative energy related investments.

Further divestment is more problematic and relatively expensive because several of our chosen investment vehicles are in very low cost, index-oriented mutual and exchange traded funds. These have small portions invested in such large cap companies as Exxon, Chevron and BP and properly form part of any diversified index wishing to track broad movements in the world’s economies. Still, we have taken action to reduce such holdings as well, shifting a bit from international large cap funds into others that are more diversified by country, industry, and company size. For instance, prior to these changes about 1.7% of the Endowment was invested in companies that held large carbon reserves. With our recent changes, we have trimmed that to less than 1%, along with commensurate reductions in smaller fossil fuel companies.

The Endowment Committee will continue to monitor its investment in fossil fuel companies and we will make further reductions in the portfolio as we find it advantageous and cost effective to do so.

United Church Funds, the manager of Hancock’s Ministerial Housing Fund equity investments, has similarly agreed to take action on this important issue. They will create a fossil fuel free portfolio and make it available to its investors within the 18-month time frame mandated by the resolution.