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Pension agency signs U.N. principles on investment

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A Web-only photo by Evan Schneider, U.N.

Secretary-General Kofi Annan (fourth from left) rings the opening bell at the New York Stock Exchange.
April 27, 2006

By United Methodist News Service*

The United Methodist Board of Pension and Health Benefits has become one of the original 25 signatories of the new United Nations Principles for Responsible Investment.

The board announced the news April 27 in New York. The heads of leading financial institutions from 16 countries signed the principles that day at the New York Stock Exchange.

The United Methodist agency was part of an international group of institutional investors that developed the principles at the invitation of U.N. Secretary-General Kofi Annan.

"These principles grew out of the understanding that while finance fuels the global economy, investment decision-making does not sufficiently reflect environmental, social and corporate governance considerations - or put another way, the tenets of sustainable development," Annan said.

The principles "provide a framework for achieving better long-term investment returns and more sustainable markets," he said. "I invite institutional investors and their financial partners everywhere to adopt these principles."

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Barbara Boigegrain
Barbara Boigegrain, top staff executive of the Board of Pension and Health Benefits, said the agency was honored to participate in the initiative.

"There's a belief in the investment community that if you invest in a socially responsible manner, you are giving up investment returns," she said. "We believe that our experience proves otherwise.

"As an institutional investor that manages its investments in a socially responsible manner, we uphold the values of the United Methodist Church. The six Principles for Responsible Investment align well with our mission and values, and our investments will continue to support them in a way that perpetuates good world citizenship."

Boigegrain encouraged other organizations to become signatories.

The principles were implemented by the U.N.’s Environment Programme Finance Initiative and the U.N. Global Compact. By signing them, organizations agree to:

  •  Incorporate environmental, social and governance issues into investment analysis and decision-making processes.
  • Be active owners and incorporate those issues into ownership policies and practices.
  • Seek disclosure on environmental, social and governance issues by the companies in which they invest.
  • Promote acceptance and use of the principles in the investment industry.
  • Work with one another to enhance effectiveness in implementing the principles.
  • Report on their activities and progress toward implementing the principles.

The principles "will alert a broader base of investors to an important approach in developing investment philosophy that can have a profound impact at the company level," said David H. Zellner, chief investment officer with the Board of Pension and Health Benefits.

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David H. Zellner
“Applying these principles can better align investors with the broader objectives of society,” Zellner said. “We think we can improve society by managing our investments in a manner that recognizes the importance of ESG (environmental, social and governance) issues, no matter where we live.

"Ultimately, our goal is to improve the lives of all people on the planet today and for future generations. We hope to change the corporate behavior that affects all of us by changing the investment community's way of thinking about these global issues facing us all."

The United Nations estimated that, of the organizations collaborating on the principles, the pension funds alone account for up to 35 percent of total global investment.

The principles were developed over a period of eight months by more than 20 pension funds, foundations and special government funds, backed by a group of 70 experts from the investment industry, government, academia and civil society.

The Board of Pension and Health Benefits, with offices in Evanston, Ill., administers retirement, health and welfare benefit plans, programs and funds for more than 66,000 clergy and lay employees of the United Methodist Church. The agency manages more than $14 billion in assets.

*This report was adapted from news releases by the United Nations and the United Methodist Board of Pension and Health Benefits.

News media contact: Tim Tanton, Nashville, Tenn., (615) 742-5470 or newsdesk@umcom.org.

 
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