As this year’s season of creation draws to a close and a crucial United Nations climate conference approaches, it is noteworthy that there is a growing movement of Catholic and other groups to depart. publicly of their fossil fuel portfolios. Harvard University recently joined the list, which also includes more than 250 Catholic groups, including NCR.
These actions are in line with the increasingly clear guidelines of the Vatican, starting with the encyclical of Pope Francis of 2015 “Laudato Si ‘, on the care of our common home “, followed by the Synod of Bishops for the Amazon in October 2019 and, in June 2020, proposals for implementation Laudato Si ‘, with recommendations on investments.
In October 2020, FranÃ§ois reiterated his call for “a gradual, but prompt, replacement of fossil fuels with clean energy sources”. He also urged investors to “engage in the integral care of our common home, excluding from investments companies that do not meet the parameters of integral ecology while rewarding those who work concretely during this transition phase” .
This contrasts with the position of the United States Conference of Catholic Bishops, which last updated its investment guidelines in 2003. A review of this document, which outlines financial principles related to human rights rights. man, to racism, economic justice and the environment, is ongoing.
Catholic financial experts say outdated bishops’ conference guidelines have allowed investors to avoid difficult issues raised by investing in industries related to fossil fuels – the main driver of climate change – including the opportunity to to divest.
A growing Catholic movement views complete divestment as the only decision in line with Catholic principles and Francis’ statements. Others believe they can accomplish more through shareholder engagement – by trying to change corporate behavior from the inside out – and through ‘impact investing’, actively targeting climate solutions instead of just eliminate fossil fuels.
While further divestment announcements are expected in October, according to the Laudato Si ‘movement, the total so far only represents a small fraction of Catholic institutions around the world. The impact is therefore limited, as is the example.
And among institutions that have retained fossil fuel-related investments, Catholic activists say relatively few actually engage as shareholders in trying to change corporate behavior.
Most fall into what John O’Shaughnessy, CFO of the Franciscan Sisters of Mary and founder of the Catholic Impact Investing Collaborative, calls the “apathetic milieu” – neither to let go, nor to reinvest positively, nor to use their power as a shareholders to challenge corporate policies.
In their 2003 document, the American bishops proposed general guidelines on divestment, recommending caution, and they encouraged active shareholder participation, including holding the minimum shares necessary to propose and support shareholder resolutions. They were clear that this requires action, not passive storage. They also hinted that the Episcopal Conference itself could do better in this regard.
Quoting their 1986 pastoral letter âEconomic Justice for All,â they also said that return on investment was not âan adequate justification for shareholder decisions,â adding, âThe question of how to link rights and the responsibilities of shareholders to those of other people and communities affected by corporate decisions is complex and insufficiently understood. We therefore urge serious and long-term research and experimentation in this area.
This was highlighted during the Synod for the Amazon, when Synod Observer Patricia Gualinga, leader of an indigenous Kichwa community in Ecuador affected by oil drilling, asked how a church that claims to protect life could invest. in fossil fuels.
Catholics cannot continue to be apathetic spectators, profiting at the expense of communities suffering from environmental damage and climate change.
Shareholder advocates must be committed to protecting the rights of communities in the places where companies operate, and not just take management’s word that all is well. Those who divest must go further and actively invest in projects and companies committed to sustainable and equitable solutions to climate change.
Francis is clearly calling for action, saying the scientific reports on climate change are compelling and echo scientists who say this decade is key to moving from a consumption-based economy powered by fossil fuels to a more fair trade that meets everyone’s needs.
It is high time for American bishops to update their guidelines and take a firm stand, with Francis, in speaking out and bringing their investments in line with Vatican principles. Doing this will set a clear example for other Catholic institutions and individual investors.