By Andrew Joskow
In April 2024, as a response to the climate crisis, the Union for Reform Judaism (“URJ”) passed resolutions that included a “call upon all Reform Jewish Movement Entities and congregations with financial investments to implement a targeted combination of divestment, shareholder engagement, and adjustment/redirection of holdings.” These actions would be taken to reduce an entity’s investments in fossil fuels companies. The URJ notes that these actions should be consistent with an entity’s fiduciary responsibilities.
Our synagogue, Temple Rodef Shalom (“TRS”), is a large Reform congregation in Falls Church, Virginia, in the suburbs of Washington, DC. Since 1962, our congregation has had a history of engaging in social action activities and advocacy. Our current sustainability initiative focuses on the environment and reducing our carbon footprint. For example, we have a Dayenu Climate Action Circle that engages in advocacy and activism alongside Jews and interfaith allies in northern Virginia.
As part of our overall sustainability strategy and our desire to help address the climate crisis, we began a concerted process of divestment and adjustment in our endowment in the summer of 2022, although we had also made some efforts prior to that date.
I am chair of the TRS 5-member Endowment Committee and a Past President of the synagogue. The Committee’s focus was on reducing the share of our endowment that is invested in fossil fuel companies, looking at all of our investment products. When calculating the endowment’s exposure to fossil fuels, we used companies in the energy sector as a proxy for fossil fuel companies. Working with our investment advisor, we have had considerable success adjusting our investments while not increasing risk.
Temple Rodef Shalom members and others march during Passover 2022 to demand big banks and asset managers stop funding fossil fuel expansion and instead fund a clean energy future.
Although we began our efforts prior to the URJ resolutions, the pattern of our actions tended to follow what became the URJ’s template quite closely. Thus, in this post, I have organized our actions around the template suggested by the URJ (key words from the template are in bold).
1) Regarding DIVESTMENT: The URJ calls for “Divestment of direct investment in fossil fuel companies,” except for (perhaps) a de minimis number of shares to allow for stockholder advocacy. We took action to ensure that the TRS Endowment had ZERO direct investment in fossil fuel companies (neither individual stocks nor individual bonds).
This type of action is easy to implement, as it is not difficult to create a diversified set of individual stock and bond investments while excluding energy companies. Although the URJ suggests possibly preserving de minimis shares to engage in SHAREHOLDER ENGAGEMENT, we do not retain de minimis shares as this is something we determined was too difficult to manage.
2) Regarding ADJUSTMENT: This topic relates to highly diversified funds (e.g., mutual funds, index funds, and exchange traded funds (ETF)). The URJ correctly recognizes that it is difficult to disentangle these funds from the fossil fuel companies that are part of the funds. However, they urge organizations to “work with their financial advisors and asset managers” to examine their exposure to fossil fuels because of these funds, to adjust where possible, and to make sure that the fossil fuels exposure from these funds is transparent. To this end, we did the following:
a) We worked with our financial advisor to determine which diversified funds are appropriate for our endowment. During this process, our advisor helped us achieve transparency about the exposure of each of our funds to fossil fuels investments.
b) Where possible, we pivoted from some funds that had high fossil fuel exposure to those that had very low or zero exposure. For example, we switched out certain proprietary funds in favor of more publicly traded funds that had lower fossil fuel exposure. Also, certain “real asset” funds that tend to have high fossil fuel exposure were replaced by funds that focus on other assets, such as real estate.
c) We assessed what was possible with our remaining diversified funds. We examined whether there were any substitutes for a standard domestic stock index fund or ETF that is generally part of most investment portfolios. We researched possible substitute indexes that excluded energy companies. Unfortunately, we found that the only available substitute was very thinly traded and could not be properly managed. For now, therefore, we have decided it would not be within our fiduciary responsibility to move to these investments. However, we have asked our investment advisor to continue to be on the lookout for new investment products that avoid energy companies.
3) Regarding REDIRECTING INVESTMENTS: The URJ calls for Redirecting Investments into the “development of renewable energy and clean energy. ” We have redirected money from some of our funds into a clean energy index fund. This also lowered our exposure to fossil fuels.
The bottom line is that, as of January 2025, the TRS Endowment has a current exposure (including through diversified funds) of approximately 2.5%. For comparison, the URJ estimates that fossil fuel companies account for approximately 10% of investment by the largest Jewish Organizations (as of December 2022).
There is always more to do, but I am glad that our work is in concert with the URJ’s template. While no one synagogue can solve the climate crisis alone, collectively a broader movement among Jewish organizations can become a significant voice for change. I believe that with help from an investment advisor, Reform Jewish Movement Entities can take material actions to reduce their fossil fuel exposure.
Andrew Joskow serves as chair of the Temple Rodef Shalom Endowment Committee in Falls Church, VA.
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