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Faith groups are mobilizing on climate change, seeing it as an existential threat to creation. Pope Francis will issue a papal encyclical on the environment this summer, which is expected to highlight both the need to reduce man-made carbon emissions, and for wealthy countries to help poorer nations deal with it, as they have done little to create the problem.
Meanwhile, the Church of England is putting its pounds and pence where its mouth is: The body that administers the worldwide Anglican Communion last week announced it is divesting from thermal coal and tar sands.
Islamic finance has played a major role in clean energy investment so far this decade.
Divestment from these most carbon intensive forms of energy is also good financial management. With pressure growing both from businesses concerned about how to operate in a world disrupted by climate change, and increasingly vocal popular movements, a price on carbon to discourage its use, is becoming more likely. Alongside this is the fact that renewable forms of energy – wind, solar, geothermal, and the like, are increasingly cost competitive. If the damages to health and the climate were factored into the price of carbon fuels, renewables would already be a clear winner.
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Fossil Fuels: Divestment vs Engagement April 13th, 2015
Trying to shift the global economy away from polluting, dangerous fossil fuels that we use very day – to clean, renewable fuel sources that can power our economy well into the future, is a complicated task. While the rate of growth of renewable energy sources is increasing rapidly, it is still far behind what we need to avoid pushing past a 2degree limit on temperature increase. The climate change movement, 350.org, has spearheaded a movement to pressure institutions, from charitable Foundations to universities, to divest from stocks of fossil fuel companies. While there are good financial arguments for doing so, based on concern about stranded assets, there is also an argument to be made for continued engagement with oil and gas companies on climate change issues. Laura Berry, Executive Director of the Interfaith Center on Corporate Responsibility (ICCR), makes the case for engagement in a letter to the UK-based Guardian newspaper, in response to a recent article.
Here is her response:
“Members of the Interfaith Center on Corporate Responsibility, a coalition of more than 300 faith-based institutions representing more than $100bn in invested capital, have been engaging the fossil fuel industry to address climate change since before the term was coined. You could say they are gnarled veterans of shareholder engagement with an industry, like tobacco, that is “on the ropes” due to a product offering that continues to be in high demand yet is widely known to present clear public health risks. The conundrum responsible owners of these companies face is not new; it is a tension that they have faced for decades. The divest/engage debate fuelled by your article (Climate campaigners losing faith in value of engaging with fossil fuel firms, theguardian.com, 7 April), which seeks to oversimplify the issue and to divide climate activists, only underscores the complexities of the problem and the genuinely difficult tasks we all face in shifting the energy industry, and our economy, on to a more sustainable path. Is shareholder engagement difficult and slow? Most definitely. Is it enough? Of course not. But do we still believe engagement is a powerful tool for social change? We do.”
“Responsible investors are deploying all their tools – divestment, engagement and everything between – to advance green energy solutions because we believe multiple and collective, inside and outside strategies are needed for what is a herculean task. Is the cause best served by discrediting the methodologies of our allies or leveraging the complementarities? Should we focus on our tactical differences or concentrate our collective energies on our common climate change enemies: investor apathy and policy inertia? We propose the latter.”
Executive Director, Interfaith Center on Corporate Responsibility