Divestment from fossil fuels
Pope Francis’ anticipated encyclical on the environment will, I imagine, come none too soon
for many readers of this newsletter. I would like to invite such readers to seriously consider
a relatively new avenue for action, one which has captured the imagination of the worldwide climate movement.
I’m referring to divestment from fossil fuels. In general, Banks, Super Funds and managed
funds have significant investments in coal, oil and gas extraction and infrastructure, even
where members have chosen ethical investment options. Divestment involves moving your
money, individually or communally, out of fossil fuels in a staged and deliberate way.
In part, this is about moral consistency. If one is advocating for living sustainably, then it is
incongruent to have money invested in the very industries that are making the planet
uninhabitable. It may be confronting to realise that you are unwittingly implicated in the
very practices you oppose, but it is also good news. You can actually do something about it
and actually get results!
Ideally it is also about taking a public stand, but more about that later.
The moral case
Analysts have calculated how much more carbon humanity can afford to emit without
overshooting the internationally accepted threshold of 2°C (Unburnable Carbon 2013 report,
London). This is only one-fifth or so of current known oil, gas and coal reserves, yet the
value of shares in mining companies is based on the assumption that all those reserves will
be burnt.
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In this graph, the blue bar represents how much carbon has been burnt since 1750, the pink bar is the global carbon “budget” before sending
the world past 2 degrees Celsius, and the purple bar at the top represents the amount that fossil fuel companies are banking on exploiting
It is becoming increasingly evident that continuing to invest in such fossil fuel shares no
longer meets a strong definition of “socially responsible”. In Bill McKibben’s now wellknown words: “If it’s wrong to wreck the planet, then it’s wrong to profit from that
wreckage.” See 350.org’s inspirational film clip: http://act.350.org/signup/math-movie/
Fossil fuel companies have furthermore shown a lack of ethical integrity and transparency.
The companies do not disclose the important systemic risks involved in the coal, oil and gas
reserves they hold but which cannot safely be burnt. Indeed they continue to spend billions
on further exploration and on unconventional fossil fuel extraction, eg, tar sands and coal
seam gas, which are even more dangerous to the environment than conventional assets.
Finally, fossil fuel industries have for decades funded climate denial think tanks and
employed influential lobbyists to ensure legislation is passed which limits environmental
action. To protect their profits, at times they mount advertising campaigns against proposed
legislation, usually with exaggerated claims of potential job losses. (See Guy Pearse, David
McKnight & Bob Burton, Big Coal, UNSW, Sydney, 2013.)
For a more in-depth treatment of the moral argument for divesting from fossil fuels, see
“Divest and Reinvest. Now.” by Rev. Fletcher Harper of GreenFaith USA. For a specifically
Christian perspective on the moral argument, including biblical references, see the “Bright
Now” report of Operation Noah in the UK.
Religious organisations that have divested from fossil fuels
Dozens of cities and Universities in the US and, more recently, Foundations have committed
to divesting from fossil fuels and the movement is spreading. Over seventy religious
organisations globally have passed resolutions to Go Fossil Free, one very public one being
the Massachusetts United Church of Christ.
The first organization to pass a resolution to divest in Australia was the NSW/ACT Synod of
the Uniting Church in April, 2013. Similar resolutions have now been passed by Melbourne
Unitarian Church, Canberra Regional Meeting of the Society of Friends (Quakers) and five of
the seven Anglican Dioceses of Aotearoa/New Zealand. Several Australian Religious Orders
are currently examining the possibility, and the Passionists don’t mind being mentioned
here as one of these.
The more practical details
People within your religious Order or organization may express a variety of concerns. You
will likely find that the paper prepared by those behind the Uniting Church decision address
many of these in “Frequently asked questions about divestment from fossil fuels”.
Hesitations may be expressed about investment returns being compromised. However,
numerous studies show that screening out fossil fuels does not necessarily mean reduced
returns. It is actually likely to reduce the risks in the medium to long-term. This is because at
some point the world must act to limit global warming to 2 degrees, at which time fossil fuel
assets will face significant value destruction which is likely to precipitate another financial
crisis. Warnings of a “carbon bubble” have come from such respected sources as Lord Stern,
HSBC and the International Energy Agency.
One of the key issues people raise is: where do you invest instead? For answers to this,
please read Go Fossil Free collectively on the ARRCC website.
Taking a stand
Obviously divestment from fossil fuels is an ethical course of action in its own right, but I
strongly encourage leaders in religious Orders and organisations to make public their
decisions. Some may be nervous about potential criticism of various kinds. I nonetheless
urge you to take this step. I’ll explain why.
In most cases, the amounts of money involved are not large, so some of the moral
significance lies in sending a message about the destructiveness of fossil fuels for Creation.
Going public also stigmatises industries which have enjoyed such a privileged place with
governments, thus challenging their social license to operate.
The enormous popularity of Pope Francis shows the extent to which the public is seeking
moral champions. In the words of Julie, a practicing Catholic, “For the last decade, I’ve felt
ashamed that the thing people hear about most when it comes to the Catholic Church is the
sexual abuse of children. If the Church can be seen as putting morality before money, it
would make all of us proud.”
Others have expressed to me their dismay at the disconnection between public statements
about the call to care for Creation and the lack of visible evidence that the Church is taking
this call seriously. Let’s give people of goodwill more reason to hope that the Church can
indeed take action to care for Creation which is consistent with her role as a moral leader.
Thea Ormerod
President, Australian Religious Response to Climate Change
Ph: (02) 9150 9713
M: 0405 293 466
E: [email protected]
W: www.arrcc.org.au