DALLAS (ABP) — The Southern Baptist Convention's Annuity Board tries not to invest in so-called “sin” stocks, but there is no guarantee of purity in investing, said board president O.S. Hawkins.
The board's screening policies prohibit investment in companies that are “publicly recognized” to be involved in alcohol, tobacco, gambling, pornography or abortion. But not all Annuity Board participants define “publicly recognized” in the same way, Hawkins told Baptist editors in a briefing in late March.
Hawkins acknowledged some Southern Baptists have expressed concerns about the board's holdings in companies such as Carnival Cruise Lines, whose self-proclaimed “fun ships” feature gambling casinos and alcohol sales.
According to an Annuity Board report from June 2003, the Baptist retirement agency owned 26,200 shares of Carnival in its Equity Index Fund and 337,600 shares — worth about $16 million dollars at current prices — in its Value Index Fund.
Hawkins said Carnival earns less than three percent of its revenues from gambling.
Unlike individual investors, Hawkins said, the Annuity Board is held to a different standard of fiduciary responsibility as it invests participants' retirement dollars. The board is obligated to seek a good return for its participants.
Some retirement participants also have complained about the Annuity Board's holdings in Hilton Hotels, Marriott Hotels, and Starwood Hotels and Resorts (parent company of Sheraton and Westin hotels), all of which offer highly profitable pay-per-view pornographic movies.
The board also has holdings in satellite and cable TV companies that provide on-demand or premium-priced pornographic programming, including cable providers Comcast, Time Warner, and Cox Communications, and satellite provider EchoStar Communications.
Those stocks were not directly addressed in the press briefing. But Hawkins made reference to the difficulty of avoiding some support of such industries.
“While we are against alcohol and pornography, almost any hotel you could choose to stay in will have a bar in its lobby or may have some option for offensive movies on its cable selection. But we all use those hotels. We all fly on airlines that serve alcohol, even though it is morally repugnant to us. Companies benefit far more from individuals purchasing their products than they do from individuals owning their stock.”
Hawkins said networks of subsidiaries and the complicated nature of investing make it virtually impossible to invest money without some risk of exposure to undesirable industries. Even if the Annuity Board chose to buy no stocks and put all the money in a bank, he said, the bank could then loan the money to a liquor store and profit from the interest.
Because they are publicly recognized as tobacco companies, Hawkins said the Annuity Board will not purchase stock in companies like R. J. Reynolds and Philip Morris, even though tobacco is no longer their major business. The Disney Company is also off limits, he said, because the SBC has taken action to boycott the company.
The Annuity Board staff is responsible for the practice of “due diligence” in overseeing investments and the social restrictions that govern them. The board employs investment companies to screen and purchase stocks, but the final decision about acceptable equities rests with the Annuity Board's trustees, said Roddy Cummins, executive officer for investment services.
The Annuity Board, which is planning to change its name to GuideStone Financial Resources and offer its services to other evangelical organizations, has a list of 350 to 400 companies in which it will not invest, Cummins said. He declined a request to make the list public, however. “We never have.”
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