MEA investments prioritize climate change

Energy sector is excluded from agency’s portfolio

Jul 6, 2020 by

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Mennonite Education Agency has revised its investment strategy, adopting five stewardship commitments targeting climate change.

The MEA Investment Fund manages more than $150 million in endowment assets of 19 institutions, including schools, colleges, congregations, conferences and other programs.

“The sobering findings from the Intergovernmental Panel on Climate Change served as a significant motivator,” said Aaron Ziulkowski, chair of the environmental, social and governance subcommittee that crafted the statement.

“Further, the economic costs of climate change are becoming more obvious, paving the way for more concrete discussions about the increased investment risk of business as usual.”

The five commitments are:

— To continue to reduce the portfolio’s contribution to climate change and the calamitous impacts rising temperatures will trigger.

— To mitigate the portfolio’s exposure to the economic risks climate change presents to the investment pool and to participate in investment opportunities that will benefit God’s creation.

— To uphold the committee’s duty of care, despite high uncertainty regarding the international policy response to climate change, technological developments and adaptation efforts.

— To take action now and in the future, identifying steps to ensure climate-related risks and opportunities are embedded into the assessment of portfolio risks and opportunities, manager selection and proxy voting.

— To communicate transparently with stakeholders and listen to their concerns.

The commitments support the fund’s stewardship investing core values, which include investing in companies that practice environmental stewardship.

Energy sector is out

MEA’s U.S. public ­equity allocation will no longer hold any companies in the energy sector. Any company that owns fossil fuel reserves will be excluded. A low-carbon “tilt” will be added to the portfolio, which can exclude companies that are carbon-intensive.

“The investment committee is committed to continuing to build our knowledge related to the intersection of climate change and investment management,” Ziul­kowski said.

The committee works closely with an external investment consultant that focuses on environmental and social issues.

In addition, the committee has added Chad Horning and Christine Jantz, both of whom have professional expertise with environmental, social and governance investing.

“For many years, the fossil fuel industry exerted its political and economic power in leading the discussion on climate change,” said John Liechty, chair of MEA’s investment committee, which manages the fund. “However, the balance of power is shifting.”

He noted that activists like Greta Thunberg, proponents of the Green New Deal and a growing number of foundations and endowments establishing renewable energy investment policies are influencing political and business leaders.

This shift also can be seen within MEA.

“Climate change is an issue about which students at our academic institutions care deep­ly,” Ziulkowski said. “Students increasingly are considering how colleges and universities are addressing climate change.”

MEA is an agency of Mennonite Church USA.


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