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CHICAGO -- The American Medical Association (AMA) should rid itself of investments in corporations involved in the fossil fuels industry, some physicians said at the AMA's annual House of Delegates meeting here.
An AMA reference committee heard testimony Sunday related to a resolution offered at last year's annual meeting that asked the AMA to "work in a timely and fiscally responsible manner to end all financial investments or relationships (divestment) with companies that generate the majority of their income from the exploration for, production of, transportation of, or sale of fossil fuels." That resolution was referred to the AMA board of trustees for further action.
The trustees then hired Mercer Investments, an independent financial consultant, to look at the association's past and current fossil fuel investments and also to estimate divestment's financial impact on the AMA. The board also consulted its law firm, Sidley Austin LLP, about any potential legal impact.
From the financial consultant, "we learned that of the country's largest 1,000 retirement plans, only 11 have committed to divest from fossil fuels," said Georgia Tuttle, MD, the board's finance committee chair. In addition, "the U.S. Department of Labor issued an opinion [saying] that except in special circumstances, fiduciaries may not subordinate the economic interest of the plan ... and Illinois law poses a duty for institutions [in the state] to diversify investment."
The report also noted that Sidley Austin stated that divestment "would unduly interfere with the fiduciary obligations of the AMA Board of Trustees ... to manage the assets of [the AMA] in a fiscally prudent manner." For these reasons, the board opposes adoption of the divestment resolution, Tuttle said.
Dave Cundiff, MD, a delegate from the American Association of Public Health Physicians, didn't find those reasons very convincing. He pointed out that the trustees' report also stated that the board's fossil fuel stocks had underperformed, suggesting that the AMA might have been better off not investing in them over the last 20 years. And, he added, a decision not to invest "put the AMA in something called a 'moral hazard.' It's awfully hard to advocate for something that costs you money, but our planet requires us to advocate against overuse of fossil fuels."
"The planet's ability to absorb carbon dioxide from atmosphere is very limited," Cundiff continued. "Our AMA is going to have to help society understand what we're doing to the atmosphere with carbon dioxide and advocate that society stop it ... We're emphasizing the moral necessity of making a moral statement."
Peter Orris, MD, chief of occupational and environmental medicine at the University of Illinois here, who was speaking for himself, noted that the World Medical Association just passed a resolution urging its member associations to consider just such a divestment, and he added that it could be done in a fiscally responsible manner.
"The current resolution [seeks to] identify organizations that make the majority of their income from fossil fuels and urges movement away in fiscally responsible ways from those investments. It doesn't set a time limit, it doesn't set a mechanism," he said. "I would appreciate it if you would consider this further."
David Rosman, MD, a Massachusetts delegate, offered the board an alternative to ponder. "We considered the same thing in Massachusetts and ended up not divesting, but rather hiring a voting proxy firm that would aggregate our belief with other like organizations so they could vote our shares in favor of environmental protection and responsible action by those corporations," he said. "We suggest there may be other options that could still be the ethical thing to do in line with our policies."
In addition to the fossil fuels discussion, the committee also heard other financial news:
- The AMA's annual report for 2017 found that total revenues increased by $23.9 million; the association has $848 million in total assets, mostly in cash and investments
- The Board of Trustees recommended no changes to the AMA's current dues structure, which ranges from a high of $420 for regular members to a low of $20 for medical students
- The delegates' Committee on Compensation of the Officers recommended a 4% increase in the salaries of some AMA officers. This would raise the president's compensation to $290,160 and the immediate past president's compensation to $284,960
The New Jersey delegation proposed that the board report annually any data it has "pertaining to reasons physicians are either leaving or not joining the AMA," noting that association membership has declined from 16.0% of all physicians in December 2010 to 15.6% in July 2017. "While we have been growing, other states haven't been growing," explained New Jersey delegate David Swee, MD. "We're asking the AMA to share any details they have about physicians who have left the AMA and why they left it."
That idea had its critics, however. "While it's important to gather this information ... We do not believe inclusion of this information in a publication with the annual report is the appropriate way to use the information," said Maryland delegate Shannon Pryor, MD. "We believe [the AMA hires] staff in such a way that we trust them with using the information in a way that makes the most sense in order to obtain membership retention in the best way possible."