You asked: is my church invested in fossil fuels?

Dear Foundation, 

Environmentalists in my church are asking the trustees whether or not we’re invested in fossil fuels. Right now our endowment is in your Diversified Moderate portfolio. That’s a socially responsible investment, right? What should I tell them? 

We’re proud to say that all of our portfolios exclude investments in private prisons, tobacco, alcohol, weapons, pornography, gambling, and coal. You can read more about the positive impacts that this portfolio makes in Wespath’s most recent Sustainable Investment Report, which we encourage you to share with key decision makers. That said, the Diversified Moderate portfolio does hold fossil fuel equities. As of August 2021, the energy sector represented 3.15% of the MSCI World Index. Limiting a portfolio’s exposure to any sector reduces its overall diversification. Broad diversification is one of the ways that Wespath and the Foundation help our investors manage risk. 

Members with environmental concerns may call on your church to divest from the fossil fuel industry entirely. In fact, in the summers of 2015 and 2016, a majority of voting members of the Oregon-Idaho and Pacific Northwest Annual Conferences voted to divest conference funds from fossil fuels. Much of this pressure has centered around the fact that the share prices of energy companies are based on their proven reserves, but the combined proven reserves of the industry far exceed the amount of carbon we can burn under the Paris Agreement. 

As a direct result of the votes taken at our annual conferences, Wespath and the Foundation worked to create an option for investors who wanted to make that choice. In the summer of 2017, we rolled out our Fossil Free Portfolios, which exclude fossil fuels and Palestinian conflict companies. The moderate version has the same balance of equities to fixed income instruments as our flagship Diversified Moderate portfolio. So far the Fossil Free Moderate Portfolio has performed well, with one-year returns of 19.90%, and three-year returns of 12.34%. 

By the summer of 2021-- five years after the PNW vote and six years after the OR-ID vote— these fossil-free portfolios held 25% of our assets under management. Most of these monies are conference funds, but several local churches have also chosen to divest from fossil fuels. In addition, in March 2020, our board of directors voted unanimously to move $500,000 of the Foundation’s own assets into the Fossil Free Moderate Portfolio, which has grown in one year to more than $750,000. 

We know that there are people of faith on both sides of this issue, and we pray that you’ll be able to navigate the conversation from a place of compassion. The Foundation can’t decide what’s most important to your community. Our role is simply to provide options. Whether or not your church ultimately decides to divest from fossil fuels, we’ve got a portfolio for you, and we’re honored to help your funds grow in a way that expresses your values.