TIAA-Cref’s recent decision to sell nearly $60 million in shares of four companies with ties to genocide in Darfur helped sway a plan sponsor to abandon its 10-year relationship with Fidelity, the recordkeeper of its retirement accounts.The Unitarian Universalist Association (UUA) board voted late last week to move about 2,800 retirement accounts with $178 million in assets from Fidelity to TIAA-Cref. The UUA, a religious association of more than 1,000 congregations, noted its growing commitment to genocide-free investing along with its disappointment in Fidelity’s “refusal to consider human rights in their investment choices” as spurring the decision, according to its website.“Many organizations have connected themselves and their pension plans to Domini, Calvert and many other socially responsible firms, but they are all relatively small compared to Fidelity and TIAA-Cref,” says Eric Cohen, chairman of Investors Against Genocide. Plans now have the option to partner with TIAA-Cref, which is a significant development for the socially responsible investing world, investor advocates say.

As recently as 2008, TIAA-Cref was among several firms, including Fidelity, Barclays, Franklin Templeton, T. Rowe Price, Vanguard and American Funds, targeted by Cohen’s group. But after talks with four companies — PetroChina, CNPC Hong Kong, Oil and Natural Gas Corporation and Sinopec— to get them to improve the situation in Sudan went nowhere, TIAA-Cref sold its holdings in those companies as of December 31.

TIAA-Cref’s nonprofit, religious and government clients have always placed a strong emphasis on socially responsible investing, but prospective clients are increasingly taking SRIs into account in their decision-making process, says spokeswoman Abby Aylman Cohen. UUA represents a midsize plan for the firm, she says.

Fidelity would not comment on UUA’s decision, but referred to its website, which addresses the firm’s overall position on Sudan, stating, “We have concluded that when it is appropriate to remain actively invested in a company, we will do so, thus retaining the ability to oppose company practices that we do not condone.”

TIAA-Cref starts serving as the new recordkeeper for the UUA retirement plan in the fall. The association started issuing requests for proposals in spring 2008 and received about seven responses before narrowing it down to Fidelity and TIAA-Cref in December of that year.

But UUA and Fidelity held meetings and exchanged correspondence on the funds’ proxy voting policies dating back to 2005. Back then the focus was on the firm’s overall record on environmental, social and human rights and not on its investments linked to the Sudanese government, according to Tim Brennan, treasurer and CFO with UUA.

The UUA and Fidelity last met in the fall of 2007 and specifically discussed Sudan. Fidelity held steadfast to its earlier position, frustrating UUA leaders, who had expressed unhappiness with the fund’s active opposition to shareholder advocates, says Brennan.

“They have been consistent in saying that they seek to maximize profit within the law,” Brennan says.

UUA examined five areas in deciding between Fidelity and TIAA-Cref, including recordkeeping and administrative capacity, investment performance and fees, customer service, and compatibility with the UUA mission. Both funds measured well against each other in providing a quality plan for participants, “and once we decided that both firms could do that, the values issue became determinative,” Brennan says.

“[Fidelity] emphasized their charitable activities and tried to put themselves in the best light, but they didn’t address our concerns around the proxy voting policies, community investments and engagement with companies on these [genocide] issues,” he says. (By community investments, Brennan means investments in communities that are underserved by traditional financial institutions.) “They responded that they did not do shareholder advocacy.”

Brennan describes TIAA-Cref’s RFP as “robust,” and notes that the firm has a staff devoted to shareholder advocacy. And while TIAA-Cref echoed other firms that said they were attempting to effect change by directly engaging with companies tied to genocide, the firm followed through by divesting in December.

“Fidelity has no staff devoted to shareholder advocacy,” Brennan says. “They say they talk to companies all the time, and if you ask them if they are talking about human rights… they won’t say.”

To be sure, a survey of UUA plan participants showed that most felt Fidelity did a good job administering their plans. But most participants also expressed concern over environmental, social and human rights issues, Brennan says.

UUA plan participants do have SRI options in most asset classes that are provided via Fidelity’s FundsNetwork program. But it does not offer any of its own branded SRI choices, and the group decided that simply offering other SRI funds while fighting socially responsible advocates was no longer acceptable.

“We are morally bound to consider the impact of our financial decisions,” UUA president Rev. Peter Morales said in a statement. “We couldn’t continue to watch passively as money we earned through religious service was directed to companies profiting from a genocidal regime. As clients of Fidelity, we tried to create change from within, but after four years, it became clear that Fidelity’s position on investing in Sudan hadn’t changed one iota.”