United Church Funds announces fossil-fuel-free investment fund

Written by Emily SchappacherJuly 2, 2014

On the anniversary of the United Church of Christ's historic vote to take action to lessen the impact of fossil fuels on climate change, United Church Funds announced the launch date of a new fossil-fuel-free investment fund. The Beyond Fossil Fuels Fund is a domestic core equity fund that will be free of investments in U.S. companies extracting or producing fossil fuels, and is targeted to open for investment on Oct. 1, 2014.

"Our staff has worked hard this year since General Synod to identify appropriate investment options and managers for this fund," said Donald G. Hart, president of UCF. "Our final manager selection will be based on total investment commitments from current and new investors."

The UCC became the first mainline religious denomination to vote to move toward divestment from fossil fuel companies as one strategy to combat climate change on July 1, 2013, at General Synod 29 in Long Beach, Calif. The resolution calls for enhanced shareholder engagement in fossil fuel companies, an intensive search for fossil-fuel-free investment vehicles, and the identification of "best in class" fossil fuel companies by General Synod 30, taking place June 26-30, 2015.

Since the resolution's passage, UCF and The Pension Boards of the UCC, the denomination's main investment vehicles, have been actively engaged in various levels of shareholder activism, using the process of shareholder engagement to work toward the goals of the UCC resolution. The Beyond Fossil Fuels Fund is another step toward meeting those goals, which the Rev. Geoffrey Black, UCC general minister and president, says is a realization of the UCC's act of prophetic witness on climate.

"As stewards of God's creation, we must continue to grow in our commitment to initiatives like this if we are to have a sustainable future on earth," said Black. "The United Church of Christ's support of this fund will make it possible for others to follow."

With a commitment of $10 million in seed money from the United Church of Christ Board's Investment and Endowment Committee, UCF will be able to offer a fund based on the S&P 500 index, free of fossil fuel companies and inclusive of UCF's traditional set of exclusionary screens, which eliminate companies that conflict with the values of the investor. However, UCF's preferred outcome would require a total commitment of at least $20 million, with which UCF would be able to offer an enhanced index fund that provides an opportunity for higher investment returns.

Investors who are interested in shifting part or all of their domestic core equity allocation to the Beyond Fossil Fuels Fund can visit the fund's website or send an email to BFFfund@ucfunds.org to receive a call from a UCF staff member. After Aug. 31, 2014, UCF will make a determination on fund style and manager based on investor commitments to the new fund.

"We, who are dedicated to protecting our planet, appreciate UCF's fidelity in fulfilling the commitment they made at General Synod," said the Rev. Jim Antal, conference minister of the Massachusetts Conference of the UCC who spearheaded the UCC's resolution to move toward divestment. "I urge UCC churches and conferences to prayerfully consider an investment in this fund."

To learn more about the Beyond Fossil Fuels Fund, join UCF for a webinar on July 23, 2014, at 2 p.m. EST. Register online.