The Church has recognised for many centuries the call to care for people on the margins of society as key to living out our Mission as followers of Christ. The “preferential option for the poor” is a key driving principle within Catholic Social Teaching, and the desired goal is social and economic justice. Over the last century, a body of teaching has also emerged which reminds us of our responsibility to care for the diversity of life on Earth including the ecological systems that support life as a fundamental concern for Catholics. These recent teachings inform considerations about how people ought to invest their money.
In his encyclical, Laudato Si’: on care for our common home, released in June 2015, Pope Francis explains in much more detail how ecological destruction is linked to the pursuit for justice. In fact, Laudato Si’ positions care for creation as a central component of living out a Christian faith.
His Holiness is quite explicit in Laudato Si’ about the burning of fossil fuels being a major contributor to global warming, and that it is therefore our responsibility to transition to renewable sources of energy as quickly as possible. “We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay.”  Laudato Si’, Pope Francis
Since the publication of Laudato Si’, every living person on the planet has been urged to consider how we choose to engage in the world we see unfolding under the threat of the ecological and social crises. Many faithful Catholics are commendably responding by moderating their consumption and embracing sustainable lifestyles including renewable energy technology. However, without careful attention to the way money is being invested, there is a strong possibility of unwittingly supporting the very practices that are degrading our planet.
This divestment toolkit provides a roadmap, tools and resources for Catholics interested in engaging in dialogue and advocacy for divestment in their family life, organisations or communities. These may range from Religious Congregations, small parishes and Catholic Diocesan Funds, to larger organisations such as Charities, Hospitals, Archdiocesan funds, Catholic Universities, Superannuation Funds, Insurance or Pension Funds. The toolkit is, by necessity, a generic one, so you will need to apply the principles and processes to your own unique context.
One of the intended goals is divestment from fossil fuels, but advocating the position you choose to take is also important and it requires a sustained effort over a period of time. It will help to create your own roadmap from this toolkit to help you imagine and create a pathway to the intended goal.
The focus in this toolkit is more on fossil fuel divestment than on reinvestment. Divestment and reinvestment have two different purposes. Divestment has the potential to challenge the social license of fossil fuel extractive companies which currently have so much power and wealth, to the detriment of life on earth. While it is much more about taking a stand on a social and ecological justice issue, it is a relatively more simple process, whereas reinvestment in low carbon technologies is a further, more complex step. Reinvestment is more about ensuring your organisation’s money is invested in companies which are beneficial for society.
Any one of these two processes will almost certainly take a long time. It may well require determined persistence, and could lead to increased costs for an organisation. It could mean more skills are needed to manage investments or it could even mean changes in staffing. Investment managers, in particular, are initially likely to say that what is being asked is impossible, and advocates need to show they will not give up easily.
You can also download this toolkit here.
The first step for successful advocacy is to build a strong knowledge base in order to share and build support within your particular community or organisation. What were some of the first questions you had about divestment? What are some questions you know your community has about divestment?
The more you can learn about your religious tradition and institutional structures, the better-equipped you’ll be to move your faith community toward divestment. Here is where to start.
Divestment, and the process and public engagement it involves, is a way to redefine society’s moral code. From this perspective, divestment isn’t just for religious institutions to maintain their own integrity or respond to intractable resistance. It is to delegitimize and de-normalize the target industry, creating a moral turning point within society and emboldening or pressuring political leaders to address issues they had previously avoided.
In practical terms, divestment is a strategy whereby, for ethical reasons, investors move their money out of corporations engaged in a certain industry, which use certain employment/social/environmental practices and/or who operate in a certain geographical area. It is the process of excluding from an individual’s or organisation’s investments, certain companies deemed by the individual or organisation to be unethical. It usually involves a staged process of moving money out of an existing, more conventional portfolio to an alternative portfolio. The first stage involves the exclusion of companies which are more directly implicated in, or “exposed to”, the industry believed to be unethical. Further stages involve the exclusion of companies which have less direct exposure and then to the exclusion of companies with indirect exposure.
In this case, the industry deemed to be unethical is the exploration for, or extraction of, coal, oil or gas and the infrastructure required for these, including pipelines and transport. There are different types of divestment decisions, ranging from “full” to “partial” or excluding particular categories on investments.
The fossil fuel divestment campaign started after the publication of the “Unburnable Carbon” report of the Carbon Tracker Initiative in 2012. The report gave an analysis of how much carbon pollution the atmosphere can carry before breaching the (then) accepted threshold of a 2°C average global temperature rise. (1.5°C is now preferred.) The maximum we can emit is less than 400 Gigatons of CO2. The total proven reserves owned by companies and governments is around six times as much as this. To go on with business as usual would mean this “carbon budget” will be used up in just 10 years (from the time of publication). Since we can’t suddenly stop at that point, we must start reducing the extraction and burning of fossil fuels immediately.
Despite this, mining companies are not diversifying. Indeed they continue to spend billions on further exploration and on unconventional fossil fuel extraction, e.g, tar sands and coal seam gas, which are even more dangerous to the environment than conventional assets. Thus, environmentalists have urged investors to send a signal to the market that these mining industries are creating unacceptable risks for life on earth.
More than 80 prominent theologians, ethicists and religious leaders, some of them Catholic, have signed a statement in support of fossil fuel divestment and clean energy reinvestment by faith communities, including Archbishop Desmond Tutu. Theologians’ Statement on Fossil Fuel Divestment Signatories
Upon Pope Francis’ visit to the Philippines in January 2015, Caritas Philippines, an agency of the Catholic Bishops’ Conference of the Philippines, handed him a powerful letter. They asked for Pope Francis’ support them in seeking an end to investment in fossil fuels and eco-destructive projects.
“The divestment movement played a key role in helping liberate South Africa. The corporations understood the logics of money even when they weren’t swayed by the dictates of morality. Climate change is a deeply moral issue too, of course. Here in Africa we see the dreadful suffering of people from worsening drought, from rising food prices, from floods, even though they’ve done nothing to cause the situation. Once again, we can join together, as a world, and put pressure where it counts.” -Archbishop Desmond Tutu
Climate change is a question of social justice because it is vulnerable communities, mostly in the two-thirds world, which are being hit earliest and hardest by climate impacts such as sea level rise, extreme weather events and disruptions to the climate system. They have limited means with which to adapt or recover, and so experience destruction of their lives and livelihoods, food insecurity, dislocation and so on. They have not contributed to the ecological destruction for which they are paying the price. Similarly, a high price will be paid by future generations, even though they didn’t create the problem.
In the meantime, it is wealthy companies and individuals who benefit from the profits of fossil fuel intensive investments, while also living high consumption lifestyles which create disproportionate greenhouse gas emissions.
“Laudato Si’: on care for our common home” is clearly of landmark significance. Laudato Si’ explores the many dimensions of environmental destruction in our world but, as with all Catholic Social Teaching, the central concern is for justice.
Global warming is a theme to which the encyclical returns repeatedly. “There is an urgent need to develop policies so that, in the next few years, the emission of carbon dioxide and other highly polluting gases can be drastically reduced, for example, substituting for fossil fuels and developing sources of renewable energy.” (para. 26)
“We know that technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay. …. Politics and business have been slow to react in a way commensurate with the urgency of the challenges facing our world.” (Para. 165)
Not only has business been “slow to react”, but Pope Francis alludes to the intentional distortion of information by fossil fuel industries with a view to influencing climate negotiations. “The failure of global summits on the environment make it plain that our politics are subject to technology and finance. There are too many special interests, and economic interests easily end up trumping the common good and manipulating information so that their own plans will not be affected.” (Para. 54)
Pope Francis praises citizens groups and non-government organisations who advocate for environmental care. He affirms consumer boycotts which “prove successful in changing the way businesses operate, forcing them to consider their environmental footprint and their patterns of production. When social pressure affects their earnings, businesses clearly have to find ways to produce differently…. ‘Purchasing is always a moral – and not simply an economic – act.’” (Para. 206)
On the question of alternative and ethical investment, “Efforts to promote a sustainable use of natural resources are not a waste of money, but rather an investment capable of providing other economic benefits in the medium term.” (Para. 191)
In Pope Francis’ encyclical, he does not explicitly address questions of ethical investment, but certain conclusions can reasonably be drawn from numerous teachings in the encyclical. They form a solid basis for proposing that both fossil fuel divestment and low-carbon investment are the most ethical options for those with money to invest.
In June 2015 the Jesuit University, Georgetown, became the second Catholic University after Dayton to make the decision to divest, withdrawing their investments out of companies whose primary interest is mining coal.
The full list of Catholic organisations which have made some form of decision to divest from fossil fuels to June 18th, 2016, are:
Four religious orders in Australia:
There are divestment campaigns organised by students on several Catholic University campuses, including Boston College and Fordham University. Scholars at various Catholic institutions have shown an active interest.
Arabella Advisors have created a beautiful resource called Assets in Action with detailed case studies of Catholic organisations which have chosen the path of divesting from fossil fuels. They are the Franciscan Sisters of Mary and Dayton University.
Does your organisation already exclude certain industries from investment? For example, many religious institutions do not invest in tobacco, alcohol, weapons, adult entertainment and gambling.
The Church’s Social Teaching has much in it to lend support to the action of screening out fossil fuel intensive investments, especially in extractive industries. However, Catholic investors have generally not yet revised their understanding of ethical investment practices at this point in time.
Many concerned Catholic institutional investors do aim to apply the social, environment and governance (ESG) framework and the UN Principles for Responsible Investment. In their paper, Catholic Investment Principles Today, Howell, Ormerod and Remond suggest that these are no longer ethically sufficient or scientifically sound. Even when investors apply additional frameworks, the interpretation of “ethical investment” or “socially responsible investment” has not usually excluded investment in the mining and export of fossil fuels. ESG and the UN Principles for Responsible Investment are based on a “weak definition” of environmental and social care.
A “strong definition” of Corporate Social Responsibility describes the care necessary for living within the capacity of the ecological systems that support life on our planet. Pope Francis’ encyclical encourages an “integral ecology”, an approach to living which holds together our deep spiritual needs, relationships with others (especially the poor), connection with nature and love of God. Part of this is the need to significantly reduce fossil fuel activities to avoid destruction of our common home. These concepts from the encyclical endorse a strong definition of sustainability.
How much money has your faith community lost by investing in fossil fuels over the last three years? Decarbonizer is a free online tool where you can find out the impact of fossil fuels on a portfolio. This tool can help boost the financial argument to divest, backing up the moral argument that it is wrong to profit from wrecking the planet.
In some cases, some or all of an institution’s money will be invested in mutual funds. You can find the holdings of many mutual funds in the As You Sow Mutual Fund Tracker.
Divestment has a long history in religious communities. Over the past century, various Jewish, Christian, Hindu, Muslim and Buddhist groups have divested from industries including tobacco, alcohol, weapons, private prisons, gambling, adult entertainment and more. Religious groups have also divested from companies operating in countries whose governments systematically abuse human rights. They divest for three core reasons:
Religious groups have divested from companies that regularly and intentionally undertake activities that injure or kill large numbers of people. Divestment from such companies represents a refusal to profit from activities irreconcilable with a fundamental religious mission and purpose.
ExxonMobil’s decades-long coverup of its cutting-edge climate research and its active cultivation of the climate denial movement is a clear example of intentional, grave, large-scale harm. InsideClimate News’ in-depth report, “Exxon: The Road Not Taken” explains the scandal.
When shareholder advocacy actions have failed to create meaningful change, divestment is a reasonable response to immoral corporate behavior. In the case of climate change, shareholder advocacy has not yielded meaningful concessions from the fossil fuel industry. Divest-Invest Philanthropy cites numerous examples of the futility of shareholder activism with oil and gas majors in the USA on pp. 19 – 21 of their monogram, “Doing Good. Performing Better”. To quote:
“To date, there is no evidence that engaging with fossil fuel companies will be an effective tool to reduce global carbon emissions in the time required.” (p.19)
Divestment, and the processes and public engagement it involves, is a way to redefine society’s moral code. From this perspective, divestment isn’t just for religious institutions to maintain their own integrity or respond to intractable resistance. It is to delegitimize and de-normalize the target industry, creating a moral turning point within society and emboldening or pressuring political leaders to address issues they had previously avoided.
Fossil fuel divestment meets all three criteria. The suffering and harm caused by climate change will be greater than the harm caused by the targets of all previous religious divestment campaigns combined. The fossil fuel industry’s business model ensures nothing but increasing harm. The industry demonstrates entrenched resistance to change through intentionally deceptive public relations campaigns and extensive lobbying against climate legislation. A rapid shift away from a carbon-intensive future won’t occur without intense, sustained public pressure.
Divest and Reinvest Now!: The Religious Imperative for a Fossil Fuel Divestment and Reinvestment in a Clean Energy Future is an introductory essay providing a theological framework for considering divestment and reinvestment. The essay includes discussion questions.
Meaningful change begins with relationships. In practice, much of the work in divesting from fossil fuels in is building support for divestment among decision-makers in the organization. This process takes time. It requires at least one person, but ideally a number of people, to talk with people and encourage a different way of thinking about ethical investing.
There is an art to running an effective, dynamic meeting. Here are a few tips that will help you get the job done:
Join the Movement to Divest and Reinvest! Many faith leaders are already engaged in campaigns to to divest from fossil fuels and reinvest in clean energy. Here are great resources from those who are already at work: Major Religious Divestment Campaigns Examples of Religious Divestment Resolutions Divest and Reinvest Global: A List of All Known Religious Divestment Efforts
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Religious Observances with themes that can be related to divestment and earth stewardship - Lent - September 1st, World Day of Prayer, called for by Pope Francis - The Feast of Saint Francis - Advent
Education and discussion are as important as the actual decision being made.
Great Books for Group Study with themes on Religion, Environment and Stewardship - GreenFaith by Rev. Fletcher Harper - Resisting Structural Evil by Dr. Cynthia Moe-Lobeda - The Comforting Whirlwind by Bill McKibben - This Changes Everything by Naomi Klein - Grounded by Diana Butler Bass
Great Facebook pages to watch for posting ideas: - GreenFaith’s Divest and Reinvest Now! - Fossil Free - Fossil Free Faith Canada - Fossil Free PCUSA - Fossil Free UMC - DivestInvest - 350.org
Media Resources 350.org’s “Get the Word Out” guide, including, talking points, outreach tips, templates and more.
FAQs: Questions and Answers from Denominational and Ecumenical Campaigns Bright Now (UK) FAQ Fossil Free Faith (Canada) FAQ Fossil Free PCUSA (Presbyterian) FAQ Fossil Free UMC (United Methodist) FAQ
Letting the world know about the decision does not need to wait until it is on the way to being implemented. It can happen as early as when the resolution is passed, as has often happened outside the Catholic Church.An important element in the effectiveness of divestment for the common good is the step of making the decision public. Even if exposure is small, there is socially significant symbolic potential in divesting from fossil fuels and re-investing in low-carbon technologies. While the ethical integrity being shown by these decisions has intrinsic value, much of the beneficial impact is in the prophetic message such decisions send to the broader society.
Making such decisions public progresses them from the sphere of private morality to the prophetic. The fossil fuel lobby which has put many millions of dollars annually into winning the hearts and minds of both politicians and the broader public. By making decisions public, organisations add to the important momentum being created to remove their social license, and they put on the public record that creation must be safeguarded from continued exploitation of fossil fuel reserves. Our common home needs to be protected.
If you do get permission to share the news, spread the word widely! Check out Go Fossil Free’s media guide for help. Be sure to reach out to all who participated along the way and thank them for their commitment and support. And notify GreenFaith so we can add your action to the global list of faith divestment efforts.
It may help those implementing the decision to know that this is a process which can take up to five years.
University of Dayton: A Case Study How does the process of divesting and reinvesting actually work? The University of Dayton, a Catholic school, made the decision to divest from fossil fuels in 2013. Here is how the university leadership executed its commitment. (to be added soon!)
Here are some next steps to consider: