After Copenhagen: The Accord and
Next Steps

On Your Behalf—January 2010

Leaders from around the world met last month in Copenhagen for the United Nations Framework Convention on Climate Change (UNFCCC) to review and to renew commitments for reducing greenhouse gas emissions, as outlined most recently in the Kyoto Protocol. During much of the conference, media reports suggested that negotiations had been deadlocked between developed and developing nations. At issue was who should bear the lion’s share of the cost and of the emissions-reduction effort. After two weeks of discussion and debate, a draft agreement, developed by the U.S., China, India, Brazil and South Africa, received support from all but a few of the 193 national representatives in attendance. The agreement, called The Copenhagen Accord, is a nonbinding agreement among its signatories that recognizes climate change as one of the greatest challenges of the present age and one that necessitates modified human behavior in order to keep any temperature increases to below 2° Celsius.

Under the Accord, signatories acknowledged the need to take intervening action, and agreed to cooperate in reducing emissions, but did not commit to a specific reduction amount or to a date by which greenhouse gas emissions are to be reduced. Developed countries would be expected to provide adequate and sustainable financial and technological resources to developing nations to help them to address the adverse consequences of climate change, such as flood and drought, and assist them in creating clean-energy economies. Developing countries would be allowed to monitor and to report on their own emission-reduction efforts without foreign intervention or oversight from developed nations.

Response to the Accord has been varied. Some participants embraced the tentative agreement as a meaningful step forward in combating climate change. For example, the 2010 Investor Statement on Catalyzing Investment in a Low-Carbon Economy noted, “Though we are sobered by how much still remains to be done after Copenhagen, we nevertheless are encouraged by the incremental progress made. Achieving some level of commitment from the United States, China and India is a crucial and unprecedented step.” Others found the lack of a specific commitment somewhat unsettling, as evidenced by the drop in carbon prices on the European market the day after the announcement.

U.S. President Barack Obama admitted that the proposed Accord is not a perfect agreement and no country would get everything it wants. Nevertheless, he encouraged every nation to choose action over inaction, and he reaffirmed the commitment of the U.S. to actively and intentionally reduce greenhouse gases and contribute to the fund that will help developing countries do the same. U.N. Secretary-General Ban Ki-moon urged other developed nations to contribute to the fund and urged all nations to sign on to the Accord.

Reflections: The United Methodist Church and Climate Change

The United Methodist Church recognizes the legitimacy of climate change and calls for human intervention to reduce individual and institutional carbon footprints. The Church also calls for modified individual and corporate behaviors that will lead to more careful and efficient use of natural resources. In The Book of Resolutions 2008, the Church urges a commitment to “ecological justice for all creation.”

“Creation” includes not only human life, but also other life forms (plant and animal) and the earth’s resources—land, air and water upon which all of these life forms depend. Resolution 1023, “Environmental Justice,” outlines various ways the Church attempts to address these specific resources. The resolution not only outlines sustainable practices, but also calls upon the agencies and local congregations of the denomination to take specific actions, including but not limited to:

• conducting research to ascertain the changing attitudes on environmental issues;
• developing programs and curricula that emphasize ecological responsibility as a key element of discipleship;
• facilitating dialogue between religious groups, governmental entities and nongovernmental organizations;
• adopting investment guidelines to evaluate securities for adherence to high standards of environmental accountability, as evidenced by the adoption of an environmental code of conduct and transparency in public environmental reporting;
• developing programs that incorporate the concerns of ecological justice into the work of evangelism, mission, stewardship and worship; and
• advocating for legislation that remedies injustices and protects both citizens and the environment.

Investor Actions

The General Board of Pension and Health Benefits (General Board) shares the Church’s concerns regarding climate change. Each year, we engage companies in discussions about reporting on and/or reducing greenhouse gas emissions and other harmful environmental pollutants. For example, the General Board currently is engaging Standard Pacific, Hormel and Overseas Shipping in discussions about greenhouse gas emissions and has asked Tyson Foods to report on the environmental impact of its company-owned and contracted animal farms, particularly the untreated animal waste that contaminates local rivers and lakes.

While we are awaiting a commitment from Standard Pacific, Hormel has published a Corporate Responsibility Report addressing issues that concern us, and Overseas Shipping has committed to creating an environmental report that outlines the ways in which the company will address and subsequently reduce greenhouse gas emissions in accordance with national and international legislation. Tyson has paid more than $10 million in fines to settle violations of the Clean Water Act and the Clean Air Act and is one of several defendants in a lawsuit brought by the State of Oklahoma alleging that the poultry manure runoff has polluted the 1 million-acre Illinois River watershed. Tyson has been less amenable to our requests for reporting. Therefore, we have submitted a formal resolution for shareholder consideration at the Tyson annual meeting next month in Arkansas.

We encourage all other Tyson shareholders to vote in support of our resolution, which requests the company to describe how it will reduce the environmental impacts of both company-owned and contracted animal farms and to provide specific goals and a timeline. We also encourage support of two other shareholder resolutions that request Tyson to:

• report on measures taken by the company to prevent waste runoff and other water pollution at all company-owned and contracted facilities, and
• phase out use of animal feeds containing antibiotics belonging to the same classes of drugs administered to humans and to implement instead animal-raising practices that do not require routine administration of antibiotics to prevent and control disease.

The General Board also collaborates with other similarly concerned investors to persuade company executives to take definitive actions aimed at reducing greenhouse gas emissions and other environmental pollutants. For example, in January 2010, the General Board participated in the Investor Summit on Climate Risk, a meeting of 450 global investors organized by Ceres and held at the United Nations in New York. Summit participants:

• considered various aspects of climate change (e.g., scale, urgency, reporting, economic challenges and opportunities),
• discussed specific policies that governments could adopt to incentivize private capital in the clean energy market, and
• outlined initiatives that companies could implement in anticipation of pending legislation.

Through these and other actions, the General Board will continue to respond to climate change. The General Board agrees with the 2010 Investor Statement on Catalyzing Investment in a Low-Carbon Economy, which states, “Investors have a critical role to play in responding to the climate challenge, and we remain committed to managing our investments, engaging companies and others in the financial community and supporting policy action to address climate risks and opportunities.”