Over the last several years, universities, foundations and the faith community have led the way in eliminating investments in the fossil fuel industry. They represent 54 percent of new commitments. Since December 2016, institutions with assets of 6 trillion dollars have made commitments to divest from fossil fuel investments. This includes 688 institutions and 58,000 individuals according to the Go Fossil Free website. Two notable organizations making commitments are the Rockefeller Brothers Fund and the World Council of Churches. About 28 percent of the commitments are from religious institutions. Over half the commitments come from outside the USA. The fossil fuel divestment movement is the fastest growing divestment movement in history.
The Paris Climate Accord in 2015 provided the moral case for divesting from the fossil fuel industry as a means to achieve the Accord’s goals. The US departure from the Paris Accord under the Trump administration intensifies the need to use divestment as an approach since policy will be absent. As divestments increase much of the funds are committed to clean energy alternatives and fossil free funds to drive the economy to a sustainable, low-carbon economy. Clean energy investments have steadily increased and reached $329 billion in 2015.
Divestments efforts have merged with other climate resistance strategies to help unify the movement globally. The framing of the fossil fuel story in this manner is increasing visibility on the use of fossil fuels and the legal, regulatory and cultural pressures on the industry according to Arabella Advisors report.
In January 2018, New York City committed to $5 billion in fossil fuel divestment from 190 companies linked to fossil fuel production. In addition, they are bringing lawsuits against the five largest publically traded oil companies (Shell, ExxonMobil and others) alleging they have caused climate disruption that will hurt the city now and in the future. The intent of the lawsuit is to shift the costs of protecting the city from the effects of climate change back to the companies that are responsible for it. The same ones that hid the consequences of their actions for almost 50 years by deception, political contributions and undermining science. Several cities in California, including San Francisco and Oakland, have sued oil companies on nuisance grounds, but have not been successful so far.
There is a growing trend for profit-driven organizations such as pension funds, insurance companies and banks to divest from fossil fuels. These organizations represent $4.6 trillion in total assets. All are concerned about the moral implications of fossil fuel use, but others are also troubled about the true value of the companies’ assets, particularly their stranded assets. A fossil fuel company’s value is based on the assumption that all its fossil fuel assets can be extracted and used. Should international agreements, national government restrictions or public outrage limit their ability to use all of their assets then the company is overvalued. Carbon Tracker estimates that 80 percent of proven fossil fuel reserves cannot be extracted without exceeding the IPPC goal of 2 degrees C.
Faith-based organizations account for 28 percent of the fossil free commitments. Presbyterian assets are about $10 billion, but only 3 percent (about $47 million in 2013) are invested in fossil fuel funds. They see their investments as a source of income, but also a mechanism to pursue mission objectives. On October 4, 2017, the anniversary of St Francis of Assisi’s death, 40 Catholic institutions committed to divest from fossil fuels in response to Pope Francis’ Laudato Si. The United Methodist Church is also beginning to divest from fossil fuel investments, since they believe it is wrong to profit from wrecking God’s creation. Many other faith-based organizations have committed to divesting from fossil fuels.
Some reasons faith-based organizations divest from fossil fuel investments:
- Get investments in line with values
- Reduce corporate influence on energy policy
- Strengthen the climate movement
- Reduce exposure to overvalued fossil fuel investments
- Reinvest in solutions
The City of Atlanta has also committed to a clean energy future by pledging to use 100% renewables by 2035. The City Council passed the bill unanimously in 2017 and is the 27th city to make this 100% renewables pledge. One of Atlanta’s leaders on clean energy was recognized recently by atl100.org with a billboard near Olympic Park and CNN recognizing her commitment and hard work for a clean energy future. That person is GIPL’s own executive director, Reverend Kate McGregor Mosley.
If you would like to learn more about sustainable investing and divestment, request a class, Investing with Sustainable Faith Values, taught by Kate and Peter Krull, sustainable financial planner. This class explores the issue of divestment from financial portfolios that include fossil fuel stocks, leading congregations and individuals towards the work of investing in positive funds that are a stronger reflection of their sustainable faith values. Exploration of biblical, theological and financial impetus for this work grounds conversation and action plans for moving away from fossil fuels and towards more Earth-sustaining financial opportunities.