Stated Clerk responds to congressional inquiry on MRTI’s corporate engagement
The Rev. Jihyun Oh also explains the role played by PC(USA) partners including Climate Action 100+
LOUISVILLE — The Rev. Jihyun Oh, Stated Clerk of the General Assembly of the Presbyterian Church (U.S.A.), has responded to a letter from the Chairman of the U.S. House of Representatives Committee on the Judiciary seeking information on the role Climate Action 100+ plays with the PC(USA)’s Committee on Mission Responsibility Through Investment (MRTI).
In a July 30 letter which went out to 130 firms and faith-based organizations, U.S. Reps. Jim Jordan, R-Ohio, who chairs the committee, and Thomas Massie, R-Kentucky, Chairman of the Subcommittee on the Administrative State, Regulatory Reform and Antitrust, say the committee “has uncovered evidence that financial institutions are colluding with climate activists through initiatives like Climate Action 100+ to adopt left-wing environmental, social, and governance (ESG)-related goals, potentially in violation of U.S. antitrust law.”
Oh, in her response, underscores two key messages: First, the PC(USA) exercises great care and responsibility in how it invests God’s financial resources so that these investments serve humanity and God’s Creation in accordance with PC(USA)’s environmental values and policies in the same way an individual might choose which companies they invest in driven by their values. Second, that the PC(USA) makes these decisions as a denomination, informed by but not directed by any other organization.
Jordan and Massie ask MRTI, which implements General Assembly policies on faith-based investing, to answer four questions and preserve documents related to what they call Climate Action 100+’s “collusive activity.”
The four questions are:
- How does MRTI plan to engage the Climate Action 100+ focus companies in its portfolio to take action to reduce greenhouse gas emissions?
- What requests will MRTI make of those companies to reduce greenhouse gas emissions?
- What tactics will MRTI use to encourage the companies in the PC(USA)’s investment portfolio to agree to its requests?
- How does MRTI plan to take action with a wider set of shareholders?
In her response, which is included below in its entirety, Oh notes that while MRTI is a member of Climate Action 100+, “it acts for itself as a representative of the Church and in service to its religious mission. As a representative of the investing agencies of the General Assembly who undertake stewardship on climate change, it is pursuing a common-sense approach driven by the pursuit of delivering the best long-term returns.”
In answering the four questions in a letter dated Aug. 29, Oh makes it clear “we do not waive our rights as a Church to engage with public policy whenever and however it intersects with religious values, actions protected under both the First Amendment to the Constitution and the Religious Freedom Restoration Act. We trust you will find this information helpful as you consider all the implications of care for God’s creation including through encouraging acts of corporate responsibility.”
In answer to the first question, Oh says MRTI’s approach depends on a number of factors, including the portfolio of the company, its approach to climate change and its responsiveness to engagement. “Typically, MRTI would engage companies via correspondence, dialogues, and filing shareholder proposals on topics related to reducing greenhouse gas emissions, including a company’s climate-related policy advocacy, climate-related technology investments, and climate transition financing,” Oh wrote.
The answer to the second question is that MRTI “has not decided what, if any, requests it might make. When that does happen, we might, for example, urge companies to address governance issues, formulate action plans to reduce greenhouse emissions, and provide guidance to enable investors to assess the robustness of companies’ business plans and improve investment decision-making.”
“The Church’s investment agencies are bound by the Church’s social teaching on care of the environment, rooted in its faith tradition and its relationship to their regulatory environment and agreements,” Oh wrote in response to the third question. MRTI could use “all the tools legally afforded to it,” she wrote, “including correspondence, dialogue, voting shareholder proxies and recommending similar actions to others, and even consider filing shareholder resolutions to encourage companies … to meet goals related to reducing carbon emissions and improving emissions disclosures.”
Her answer to the fourth question includes this: “MRTI, working on behalf of the investing agencies of the General Assembly, is not taking action by engaging broader stakeholders, but requesting companies to do so.” Engagements with companies on the Climate Action 100+ focus list “may include encouraging them to engage with broader stakeholders, such as policymakers and other actors to address the sectoral barriers to transition.”
MRTI “will cooperate with investors and engagement service providers, consistent with our Christian witness, especially as we listen to communities directly impacted by and involved with these corporations,” Oh wrote. “It will collaborate with other stakeholders to address barriers to the net zero transition in the same way that it collaborates for engagement with companies on any other issue.”
Oh concludes by telling Jordan and Massie that MRTI is “populated by Church volunteers and people of faith deeply committed to caring for our common home” and “acts out of sincere religious conviction.”
Here’s Oh’s response to the letter from Jordan and Massie:
August 29, 2024
Dear Chairman Jordan,
I write in response to the House Judiciary Committee’s inquiry directed to the Committee on Mission Responsibility Through Investment (“MRTI”). For your committee’s information and background, MRTI is an activity of the Presbyterian Mission Agency (“PMA”), an ecclesial agency of the General Assembly of the Presbyterian Church (U.S.A.) (“PC(USA)” or “Church”). The General Assembly is the “council of the whole church and it is representative of the unity of the synods, presbyteries, sessions, and congregations of the Presbyterian Church (U.S.A.).” (Book of Order, section G-3.0501) The Church, which is an ecclesiastical body, operates through the Presbyterian Church (U.S.A.), A Corporation, which employs the staff of the PMA, including those who support the work of MRTI.
Background
As members of the reformed Christian tradition in the Presbyterian Church (U.S.A.), the General Assembly of the Church recognizes that climate change is undeniable and is one of the most pressing moral and theological problems of our time. We come to this position as a theological matter and engage the public policy debate around this and other issues as faithful expression protected under the First Amendment for all religious traditions. As Christians who have covenanted in relationship with God, we are called by God to care and maintain the fragile order with which God has entrusted us (Gen. 2:15). The undeniable urgency of climate change that threatens the planet warrants a response at every religious, social, political, and economic level. There are no silver bullets, quick fixes, or simple solutions. This is why MRTI, as an activity of the Church, has and will continue to engage with corporate representatives and seek intentional, thoughtful, and productive resolutions to address the ways corporate emitters hasten climate change and bring ongoing harm.
MRTI acts pursuant to policy that emanates from the General Assembly. Specifically, the 226th General Assembly of the Church (2024) instructed MRTI, as well as the broader denomination, regarding fossil fuels companies, to:
i)“Prioritize responses to the urgent needs associated with the existential threats of the climate crisis, including those related to limiting global warming to well below two degrees Celsius, as outlined in the Paris Agreement, including the addition to the agreement by the parties during the UN Climate Change Conference COP 28 calling for ‘transitioning away from fossil fuels in a just, orderly and equitable manner, accelerating action in this critical decade’ and for PC(USA)-related entities and members to promote and pursue comprehensive faithful responses to these threats”
ii) “[I]mmediately identify the top ten fossil fuel companies that derive the majority of their profits from the exploration, development, and production of fossil fuels and with which there will be no promising engagement, and immediately divest from those companies”
Although MRTI is a member of the Climate Action 100+, it acts for itself as a representative of the Church and in service to its religious mission. As the representative of the investing agencies of the General Assembly who undertake stewardship on climate change, it is pursuing a common-sense approach driven by the pursuit of delivering the best long-term returns. Climate risk is a material financial risk as well as an existential offense to our religious mandate to care for God’s Creation. Institutional investors are well-served by acting on these risks and the resulting investment opportunities. If left unchecked, these risks threaten investors’ long-term ability to sustain value and generate ongoing returns for their beneficiaries.
Against this backdrop, please find below MRTI’s responses to the Judiciary Committee’s questions. We offer this information in the hope that you understand why we act as we do in service to a religious mission. In offering these responses, we do not waive our rights as a Church to engage with public policy whenever and however it intersects with religious values, actions protected under both the First Amendment to the Constitution and the Religious Freedom Restoration Act. We trust you will find this information helpful as you consider all the implications of care for God’s creation including through encouraging acts of corporate responsibility.
Questions
1) How does MRTI plan to engage the Climate Action 100+ focus companies in its portfolio to “[t]ake action to reduce greenhouse gas emissions across the value chain”?
The approach MRTI takes is dependent on a number of factors including the profile of the company; the company’s approach to climate change; its responsiveness to engagement; the industry or sector and the development of relevant technologies; and the regional context. Typically, MRTI would engage companies via correspondence, dialogues, and filing shareholder proposals on topics related to reducing greenhouse gas emissions, including a company’s climate-related policy advocacy, climate-related technology investments, and climate transition financing.
2) What requests will MRTI make of the Climate Action 100+ focus companies in its portfolio to “[t]ake action to reduce greenhouse gas emissions across the value chain”?
MRTI has not decided what, if any, requests it might make. When that does happen, we might, for example, urge companies to address governance issues, formulate action plans to reduce greenhouse emissions, and provide guidance to enable investors to assess the robustness of companies’ business plans and improve investment decision-making.”
3) What tactics will MRTI use to encourage the Climate Action 100+ focus companies in its portfolio to agree to its requests?
The Church’s investment agencies are bound by the Church’s social teaching on care of the environment, rooted in its faith tradition and its relationship to their regulatory environment and agreements. MRTI could use all the tools legally afforded to it, as outlined above, including correspondence, dialogue, voting shareholder proxies and recommending similar action to others, and even consider filing shareholder resolutions to encourage companies in the portfolios of the investing agencies of the Church to meet goals related to reducing carbon emissions and improving emissions disclosures.
4) How does MRTI plan “to take action with a wider set of stakeholders to address the sectoral barriers to the net zero transition”?
a) MRTI, working on behalf of the investing agencies of the General Assembly, is not taking action by engaging broader stakeholders, but requesting companies to do so. Engagements with companies on the CA100+ focus list may include encouraging them to engage with broader stakeholders, such as policymakers and other actors to address the sectoral barriers to transition.
b) MRTI will cooperate with investors and engagement service providers, consistent with our Christian witness, especially as we listen to communities directly impacted by and involved with these corporations. It will collaborate with other stakeholders to address barriers to the net zero transition in the same way that it collaborates for engagement with companies on any other issue.
Again, MRTI appreciates and understands the Judiciary Committee’s interest in this important topic. It hopes that you will also appreciate that MRTI, populated by Church volunteers and people of faith deeply committed to caring for our common home, acts out of sincere religious conviction and that you will find these responses helpful to your work.
Sincerely,
The Rev. Jihyun Oh
Stated Clerk of the General Assembly of the Presbyterian Church (U.S.A.)
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