General Board of Pension and Health Benefits of the United Methodist Church, Glenview, Ill., banned investment in companies involved in private prisons.
The board, which oversees the $16.7 billion pension fund, adopted a policy to screen out companies that “derive more than 10% of revenue from the management and operation of prison facilities,” including jails, penitentiaries, detention centers, prison camps and transfer centers at the federal, state, county or municipal level, the statement said.
“The chief concern was (the type of investment) is not in alignment or agreement with the church’s social principles,” M. Colette Nies, managing director, communications, said in an interview.
“It didn’t seem right to be profiting from the incarceration of people in prison,” Ms. Nies said in the interview.
The board had some $900,000 combined invested in Corrections Corp. of America and GEO Group, both of which it divested, Ms. Nies added in an e-mail.
“The market value of companies that operate prisons are inconsequential to the value of the total investment universe, and the board felt that this screen will have virtually no impact on investment performance,” Ms. Nies wrote in the e-mail.
For the board, in making the decision on the ban, Ms. Nies said in the e-mail, “The sole issue was profiting from the incarceration of others.”
“There was nothing to resolve with the companies,” Ms. Nies said in the e-mail. “Our concern was not with how they conducted their business, but the service that they provide. We do not think that it is practical to advocate that a company discontinue a service that provides its main source of revenue. Ultimately, that would not be in the interest of shareholders.”
Attention to the investment was brought up through a concern from a church task force on immigration, including the issue of an “expanding prison population, which also benefits privately owned detention centers,” she said in the e-mail.
The prison-related ban is the sixth investment policy screen adopted by the board, which practices socially responsible investing, guided by church principles, the statement said. The other screens prohibit the board from investing in companies ”that derive significant revenues” from gambling, manufacture, sale or distribution of alcoholic beverages, tobacco-related products, weapons or pornography.