Do not store up treasures in pensions

First of two columns on pension investments

December 24, 2014 | God at work in the World | Number 1
By Will Braun | Senior Writer

I like the Bible verse that says, “Do not store up treasures on earth,” but I also like the thought of a few treasures on the side for the sake of financial security. That tension gripped my soul as I opened the Mennonite Church Canada pension package I received when I joined the staff of this magazine. I paged through it, anxiously seeking an option to ease my troubled heart.

It turns out that 85 percent of the 932 people under the MC Canada pension umbrella choose the “core option” that is administered by OceanRock Investments. Sort of. Actually, MC Canada deals with Ardent Financial, which deals with Great West Life, which deals with OceanRock, which deals with numerous “sub-advisor” companies, which do the actual investing, sometimes in banks and other entities that have their own strata of investment.

The systemic and managerial complexities defy common sense. 

OceanRock—a national leader in Socially Responsible Investing (SRI)—offers 22 funds and portfolios. The firm's SRI screens weed out companies involved directly in tobacco, alcohol, the military, pornography, nuclear power and gambling, although investment itself is a gamble. In addition, it seeks companies that show leadership in environmental, social and governance issues.

The MC Canada “core option” is a mixture of four OceanRock funds along with a mortgage fund and a bond fund. If you drill down through the layers and lingo, you find that “core option” Mennonites  invest in government bonds, mortgages and such “ethical heroes” as PepsiCo, UPS, General Mills, Target and most of the big banks.

Wine is out, but mainstream consumption is certifiably responsible, despite the ecological, human and spiritual destruction in its wake. Pass the Pepsi shares. May the kingdom come!

But OceanRock CEO Gary Hawton admits the challenges of SRI and says, “We ask for a little bit of grace along the way.” Fair enough. More than fair. No matter how we invest, and even if we don't, we're all complicit in the machinations of money and stuff, and we must be gracious with each other and ourselves.

It's tough to consider the lilies of the field, which worry not about tomorrow but rely wholly on God. That's scary. Pass the grace.

Of course, there are ways around the Matthew 6 comment on lilies, and there are good reasons to invest. One is the work-from-within argument. Hawton spends up to half his time on “shareholder engagement,” meeting with leaders of companies to discuss improvements related to social responsibility. “We are called to be salt and light,” he says, and his stories of this work paint a moving picture of someone doing exactly that in a setting where few else dare to treat.

This year, he had a behind-the-scenes tour of Suncor's operations in the Alberta bitumen sands. This was part of nearly a decade of dialogue with the company on various topics. “We think we're having meaningful long-term impact,” Hawton says.

The strategy is to invest in companies that are ethically “best-in-class” and encourage further improvement.

But the work-from-within approach is limited. OceanRock dumped its shares in Enbridge and Barrick Gold because shareholder engagement proved unfruitful and the companies were deemed no longer best-in-class. And of course, no one is using the work-from-within argument in the case of alcohol, military and other sectors deemed fundamentally unacceptable.

The fossil-fuel sector is not considered fundamentally unacceptable, at least not by OceanRock. Yet the World Council of Churches and even the heirs to the Rockefeller fortune—which was built on oil—have pulled out of fossil-fuel investment altogether. And Desmond Tutu advocates divestment, noting how effective the strategy was in fighting apartheid.

While we all use fossil fuels, the divestment argument says we should use our money to encourage alternatives, not to bankroll companies whose very business model involves extracting as much hydrocarbons from the earth as possible. The widely accepted science shows that if all of the known fossil-fuel reserves of the major energy companies are indeed extracted, the planet will sizzle

Only about 3.2 percent of the “core option” is invested directly in the energy sector. As the financial elders of the church will say, the world is complicated and dialogue is important. If such dialogue is to have integrity, it must consider lilies and divestment. Could we dare to print Matthew 6:19-34 in the MC Canada pension package?

Of course, the only way to face the grand invitation to store up treasures where no moth will destroy is to embrace the fact that, while the world is full of ethical greyness, it is equally full of grace.

For “core option” details, visit www.canadianmennonite.org/pensions. My next article will trace my journey from youthful idealism to real-world pension decisions.

—Posted Jan. 2, 2015

See also:

Part 2: Holy recklessness

Pensions and recklessness (online supplement)

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Comments

Thanks for this careful probing! I, too, have investments through Ocean Rock (via my advisor at Mennonite Credit Union), and can appreciate the complexities of trying to invest my "talents" in places where they at least do as little harm as possible. I appreciate that there is at least some place in the investment world where ethics and values are part of the equation, however impossible it is to be pure about this.

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