FAQ on Divestment from Fossil Fuels
The Basics about Divestment
(These are primarily drawn from the 350.org website, with much shortening and a few modifications.)
· Divestment is a moral and prophetic act. It is a refusal to invest in or profit from companies engaging in unethical or morally ambiguous actions. Burning fossil fuels creates global warming, which in turn causes suffering and changes in life cycles (for humans and other living things). It is thus morally wrong to make money from the unregulated extraction of fossil fuels.
· Divestment is the opposite of an investment–it simply means getting rid of stocks, bonds or investment funds that are unethical or morally ambiguous. Fossil Fuel investments are a risk for investors and the planet–that’s why we’re calling on institutions to divest from these companies.
· There have been a handful of successful divestment campaigns in recent history, including Darfur, Tobacco and others, but the largest and most impactful one came to a head around the issue of South African Apartheid and helped break the power of the Apartheid government.
We want PCUSA to do two things:
1: immediately freeze any new investment in fossil fuel companies, and
2: divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.
Two hundred publicly-traded companies hold the vast majority of the world’s proven coal, oil and gas reserves. Those are the companies we’re asking our institutions to divest from. Our demands to these companies are simple, because they reflect the stark truth of climate science:
- They need immediately to stop exploring for new hydrocarbons.
- They need to stop lobbying in Washington and state capitols across the country to preserve their special political and economic breaks, including subsidies for their products.
- Most importantly, they need to pledge to keep 80% of their current reserves underground forever.
The fossil fuel divestment campaign is about creating a movement which can educate the broader public about the increasing amount of CO2 in the atmosphere and its impact on global warming. As a divestment campaign grows, there is strength in numbers, which ultimately can bring sufficient negative publicity to hurt the public image of these companies and remove their social license to continue to do business the way they have.
Shouldn’t we just focus on stopping fossil fuel projects like offshore drilling, tar sands pipelines, coal power plants and hydrofracking wells?
- Stopping fossil fuel infrastructure projects is important. Coal plants cause asthma and dump mercury into the air and water; fracking fluid can leak into groundwater and make people sick; pipelines can leak, and so on. We can and should stand with people on the front lines of these fights to stop projects like the Keystone XL pipeline that would destroy communities and the planet, and contribute to climate change.
- But, we can’t stop global warming one pipeline, coal plant or fracking well at a time. We also need to loosen the grip that coal, oil and gas companies have on our government and financial markets. We need to fight back against the economic power that these companies have in our economy.
Companies like ExxonMobil, Shell, BP have billions of dollars/euros. How can divesting the funds from a few institutions like universities, pensions and churches make an impact?
- Divestment isn’t primarily an economic strategy. It’s a moral stand, an educational strategy and a publicity strategy. Just like in the struggle for Civil Rights here in America or the fight to end Apartheid in South Africa, the more we can make climate change a deeply moral issue, the more we will push society towards action. We need to make it clear that if it’s wrong to wreck the planet, then it’s also wrong to profit from that wreckage.
- While sale of stock might not have an immediate impact on a fossil fuel company, what it does do is start to sow uncertainty about the viability of the fossil fuel industry’s business model. Here’s why: in order to keep warming below 2°C, a target that the United States and nearly every other country on Earth has agreed to, the International Energy Agency calculates that the fossil fuel industry will need to NOT burn approximately 80% of their reserves of coal, oil, and gas. Those reserves are factored into the share price of every fossil fuel company. Those assets will have to be written off when governments finally decide to regulate carbon dioxide as a pollutant. By divesting from fossil fuels, we are building the case for that government action.
- Divestment also starts to build momentum for moving money into clean energy, community development, and other more sustainable investments. It is moving our money from the problem to the solution.
- The divestment movement creates public discourse which can create momentum for legislation to limit carbon emissions.
Can we still make a reasonable return without investing in Exxon or Peabody Coal?
- While it’s true that fossil fuel companies are extremely profitable, they’re also very risky investments. Coal, oil and gas companies’ business models rest on emitting five times more carbon into the atmosphere than civilization can handle. Disasters like Exxon Valdez and the BP oil spill also make these investments risky.
- Report after report has shown that investing in clean energy, efficiency and other sustainable technologies can be even more profitable than fossil fuels. It’s a growing market and a safe place for an institution to invest.
- There are also a number of ways to re-invest locally that help build your community and stimulate good jobs. Projects like energy efficiency and rooftop solar have high up-front and labor costs, but save institutions money in the long run, because electricity, heating and other costs are reduced significantly.
- The five year divestment plan allows ample opportunity to develop an alternative investment strategy.
· We encourage institutions to bring about shareholder pressure over the next 5 years as they gradually divest. If they are successful in getting the fossil fuel companies to give up their core business in the next 5 years, that’s wonderful. If not, the companies know that there is a consequence for refusing to move away from fossil fuels to become more broad-based energy companies.
· We are a bit skeptical that companies will respond sufficiently to shareholder engagement. Shareholder action can be an effective tool to make small reforms at a company, such as pressuring Apple to institute better labor practices at the factories it works with in China. But there haven’t been any shareholder resolutions that have been able to address the core problem with the fossil fuel industry: the massive amounts of carbon they insist on dumping into the atmosphere for free. Exxon could still make a profit as an energy company if it transitioned its massive wealth and expertise over to renewables, but they won’t do it willingly and we doubt that any group of shareholders would pass such a resolution. They are more likely to do it only if there is enough public pressure and moral outrage to finally bring about government regulation.
· It’s unlikely the fossil fuel companies can be convinced to give up their core business and move to renewables through shareholder action
That’s why it’s time for divestment. We need to make the moral stakes of our current situation clear: the fossil fuel industry is destroying the planet and it’s immoral to profit off that destruction that harms humans and all creation. Divestment is a clear and powerful action that helps build the case through education and publicity so that there will eventually be government action. Divestment powerfully makes the point that we should be moving our money into the solution as opposed to the problem. If we’d started this campaign 30 years ago, then shareholder action would make more sense, but with the rapidly closing window for action, we need to act swiftly and boldly. Divestment can be an uncomfortable step to take, but it’s the right thing to do — and it will make a far greater impact than any shareholder resolution we could ever pass.
What about the hard-working people who mine coal, drill oil and run fracking equipment for a living? How can I support this overture given the hardships it would cause them?
(with thanks to UCC’s FAQs)
· We are profoundly and humbly aware of the vast economic disruptions and personal costs that will result from moving beyond a fossil-fuel-based economy.
· The church will need to have a role in helping individuals deal with grief and change, and in advocating for corporate and governmental policies to mitigate the damage. The church must stand with those who lose their jobs, even as we pursue this change.
· But if humanity does not make this transition, the disruption and cost will be incalculable, as our world will cease to be habitable for miners, drillers, or any of us.
· Our economy has gone through severe dislocations in the past. When slavery was an issue, many felt that the economy (the textile industry in the North included) could not survive the loss of cheap cotton harvested by slave labor. This did not deter our nation’s leaders from passing the 13th Amendment. It is not easy to make these changes, but sometimes it is necessary.
· There will be many new jobs created in the renewable energy sector.
What about the people who are just getting by and see any rise in gasoline prices as a threat to their well-being? These are the folks, for example, who have to drive great distances to get to any sort of employment and cannot afford to live close to the available jobs. Public transportation is not a real option in many places. Some people will see this plan as making their lives immediately worse for a very small future reduction in greenhouse gas emissions.
· No question this will create hardship for all of us, especially those who live close to the margin and depend on low gas prices.
· We have to stay focused on the larger danger in our lives. Our planet is threatened and this danger poses a larger threat to even more people.
· When our legislators finally take on the issue of carbon taxes making polluters pay for externalities, they will have added financial resources to create viable public transportation and subsidies (like food stamps) available for those who can’t afford fuel.
· It will be important for people of faith to be willing to stand with people on the margins who will suffer the impact of more realistic (non-subsidized) gas prices.
Our church avoids political issues.
· We certainly know from experience that it’s tough for a church to take on an issue that may be divisive. But we also know that sometimes that is necessary. In the Gospels Jesus calls us again and again to work for those who suffer, to care for those who need healing, and to speak up for those who are voiceless. Jesus offers us a model of standing up to those in power who create and enforce economic and political systems that add to suffering and injustice.
· We don’t see this as a political issue. It’s not a Republican or Democratic issue; it’s a human issue.
· We see this as an issue of morality and of social justice and both of those concerns are at the heart of our Christian faith.
· The 183rd General Assembly of the PCUSA resolved that church investment is “an instrument of mission and includes social, theological and economic considerations.”
Isn’t the fate of the world in God’s hands, not ours?
· Perhaps the problem is that we humans have taken over God’s role.
References: Job 38, Genesis 3
· 1 Samuel 2:8 reads “All the earth is the Lord’s, and he has set the world in order.” So, yes, the fate of the world is up to God, but God also calls us in Genesis to till and keep the garden. “That means we have the responsibility to protect our air… we need to be part of the solution, not part of the problem.”
· (ask the person you are talking to) How do you understand how God acts in history, in the world?
· In 2006 PCUSA passed a resolution saying we have a Christian mandate to care for creation by “acting now and acting boldly to lead the way in reducing our energy useage.”
· Prophetic voice? God works through prophets and God is still calling us to speak up in the world
Is the overture asking only PC(USA) to divest or is it also asking individual churches and people to divest?
· The overture asks only PC(USA) to divest its holdings at a denominational level. Although divestment by individuals and smaller organizations is very welcome, the divestment movement is focusing on large institutions. Such institutions tend to have significant retirement funds and larger budgets and, at least initially, their actions will draw the greatest attention.
· That said, we encourage individual churches and people to pursue divestment. The more demand there is for fossil-free funds, the sooner those investment options will expand. The more re-investment there is into clean energy companies, the stronger they will become.
Don’t the fund managers have a fiduciary responsibility to invest PC(USA)’s funds to get the most benefit for their client?
· Monetary profit is not the only benefit we are looking for. A secure future is what we really seek. An investment that wrecks the place we call home cannot be defended as fulfilling the fiduciary obligation to benefit investors. Succinctly, how can it be a good investment if it leads to the destruction of our home and future?
· Fiduciary responsibility means acting in the best interest of the institution. In PCUSA, our “best interest” may be served by having a sustainable planet.
What is the policy of PCUSA on divestment?
The General Assembly of PCUSA has over the years instructed its investing groups to divest from tobacco, alcohol, gambling, and pornography along with some companies related to guns and weapons production. We believe fossil fuel companies should be on that list.
Do we know how much $ the PCUSA has invested in fossil fuels?
· No. We are working on finding answers to this question.
Questions about the Science
Isn’t there still disagreement among scientists?
· There is almost no disagreement among experts in the field of climate science. (Among 14,000 authors of peer-reviewed scientific articles on global warming published between 1991 and Nov. 2012, only 24 reject human-caused global warming.)
· Suppose your child had symptoms of ill-health and you took him to 100 medical specialists. 98 of them said you need to treat this illness now and 2 said “let’s wait and see what happens”, what would you do?
Where can I learn more about climate change?
A good book on faith and the science of climate change is A Climate for Change by Katharine Hayhoe and Andrew Farley. We also recommend the Union for Concerned Scientists (http://www.ucsusa.org) as an excellent resource.
This is so unrealistic. We depend on fossil fuels. We need to keep the lights and heat on and be able to move people and goods from place to place.
· Yes, of course we want energy. But most of us would not care what the source of that energy is (oil or wind) as long as it could keep the lights and heat on.
· We also need to continue to reduce our energy use.
· Only certain sources of energy (fossil fuels) have received subsidies and have not had to pay to dump their waste. Because of the power grip of these companies, we’ve been led to believe that only fossil fuels can meet our energy needs.
Wouldn’t a better way to solve the problem be to put a price on energy (fee and dividend/carbon tax)?
We do need to continue to contact our legislators about that. But we won’t get that kind of action from Congress until we radically change the conversation about global warming. First, we need to draw more and more attention to the problem. And we need to put moral pressure on the fossil fuel companies so that they will no longer have a strangle hold (think big money lobbying) on the political process.
You know, nothing’s going to solve this problem until…people stop driving, or people stop consuming so much, or China stops polluting, or …fill in the blank)
· I agree that no one strategy can, by itself, solve the problem. It would be wonderful if… (people drove less, China cut back on emissions, etc).
· But divestment is one concrete strategy aimed at the root of the problem, which is that the fossil fuel companies continuing with their business as usual will wreck the planet.
· Religious institutions are especially well suited to take a moral stand and speak with a prophetic voice.
· It will take many changes to solve our climate problem, this is one.
Population growth over the next 50 years will force us to use every available source of energy to meet demand. It seems stupid to cut off some of those sources.
· We have to weigh this reality against the reality of what the world will be like in 50 years if we continue burning carbon as we are now.
· Increasingly frequent and severe storms will play havoc with the power systems we now have.
· No question we must also address the issue of population growth.
· Limiting carbon emissions preserves more capacity for food and water for future generations.
Do you really think divestment will work?
· I don’t know whether we can do enough fast enough to stem the tide. But I know that I must do all I can to respond to the moral crisis of our age.
· As people of faith, we bring the element of hope, not a naive optimism, but a hope that does not depend on continuity. Hope embraces breakthrough; hope embraces miracle. Hope believes that a single sermon can change your life. Hope believes that a single person can change history. However strong the forces against us may be, we do not lose hope. (Thanks for this wording, UCC.)