Update on Faith and Fossil Fuel Divestment Discussion

On Sunday, February 9, the SPC Earth Care team sponsored an informative discussion regarding the PCUSA and fossil fuel divestment with guest speaker Bill McKibben (who participated online).  Approximately 45 people were present at SPC while additional participants joined from the Shenandoah Presbytery and other locations via video conference. Bill McKibben described the urgent challenge of confronting climate change and the importance for organizations to divest from fossil fuels. 

Trinity Presbyterian Church (Harrisonburg) has proposed an overture that requests that the PC(USA) divest from fossil fuels and is requesting that SPC, and other congregations in the Presbytery, support this overture so that it may be presented at the PCUSA General Assembly meeting in June 2020. 

If you were not able to participate in Sunday's meeting, you can watch it here: Fossil Fuel Divestment Discussion

The proposed overture may be viewed at: Fossil Free PC(USA) Divestment Overture 2019

 

The following is a summary for the Shenandoah Presbytery, authored by Stephanie Sorge of Trinity Presbyterian.

Overture to Divest from Fossil Fuels

Two years ago the overture calling for categorical divestment from the fossil fuel industry (defined as the 200 companies on the Carbon Tracker list) originated in Hudson River Presbytery and was supported by 39 other presbyteries - including Shenandoah - for a total of 40 presbyteries. It was the largest number of presbyteries supporting a single overture in the history of the PCUSA, suggesting that our denomination has widespread support for immediate and urgent action in response to climate change.
The overture went to a GA committee tasked with deliberating on all the overtures related to the environment, including the report on divestment from fossil fuels from the Mission Responsibility Through Investment Committee (MRTI). That report called for the establishment of specific criteria that would identify the worst offending companies in the fossil fuel industry.

After much discussion in the committee, the committee supported the overture for categorical divestment from the industry, effectively agreeing that the industry as a whole has shaped the current climate emergency and that the PCUSA must take a moral stand about whether we will make money off the crisis. The MRTI report, meanwhile, became a minority report that a small number of people from the GA committee prepared to present to plenary.

On the floor of plenary, the committee leadership briefly presented the overture to categorically divest from fossil fuels. Then there was a vote to consider the minority report. That minority report was presented by member(s) of the GA committee on the environment and supported by members of MRTI, who were given more than twice as much time to present their minority recommendation as the original recommendation to divest had been given. The plenary then voted to make the minority report (the MRTI report) the main motion, effectively rejecting the committee’s recommendation to ratify the overture to divest from the fossil fuel industry. In doing so, the plenary body affirmed a company-by-company approach led by MRTI, an action that engages individual companies instead of seeing the larger problem that overuse of fossil fuels as a whole have led to the climate crises that impacts all of God’s beloved creation.

After the minority report/MRTI report was affirmed by the plenary, there was a die-in protest outside of the plenary hall. Activists sought to point out that the plenary’s decision effectively mean that the PCUSA would continue to profit off of climate change while millions of people would suffer and die in climate change related deaths.

As of February 1, Hudson River, Boston, Susquehanna Valley, Newton, Florida, Twin Cities Area, National Capital, and DeCristo Presbyteries have all voted to concur with Monmouth Presbytery for the Divestment Overture that we are considering now in Shenandoah. The Overture will go to GA regardless of our vote, but an affirmative vote in Shenandoah will make a big statement in terms of support to get serious as a denomination about addressing the climate crisis through divestment.

1. What is divestment?
Divestment is a moral and prophetic act. It is a refusal to invest in or profit from companies engaging in unethical actions. Divestment is the opposite of an investment. It simply means selling stocks, bonds or investment funds that are unethical or morally questionable. There have been a handful of effective divestment campaigns in recent history, including Darfur and tobacco, but perhaps the most impactful one helped break the power of the apartheid government in South African in the 1990s.

2. What are we asking?
We want the PC(USA) to do three things:
- Divest from direct ownership of stocks and any commingled funds that include fossil fuel public equities and corporate bonds.
- Report with regular updates on progress made towards full divestment.
- Actively seek out and invest in securities of companies whose predominant focus is in renewable and/or energy efficiency.

3. Why divestment?
Divestment is a powerful public statement removing the moral license from big oil, gas, and coal companies. These companies currently generate huge profits and overly influence public policy, even while the planet is quickly warming toward an uninhabitable state. As the 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 as usual. We have an opportunity to be part of this worldwide divestment movement. This overture asks Presbyterians to join a movement to save the planet by pressuring the fossil fuel industry to stop the production of fossil fuels.

4. How is it decided which are the “top 200 fossil fuel companies” to divest from?
We agree to use the list widely adopted by the worldwide fossil fuel divestment movement which is compiled by the “Fossil Free Indexes’ Carbon Underground”. They are the world’s 200 largest publicly traded fossil fuel companies, ranked by the CO2 emissions potential of the reserves they hold of coal, and of oil and gas. The divestment campaign’s focus goes to the root of the problem: vast reserves of carbon must be kept in the ground and never extracted.

5. What other groups have divested?
Across this country and internationally many colleges and universities, cities, foundations, and faith groups have voted to divest. U.S. faith denominations that have committed to divestment are the UCC, Unitarian Universalist, and Episcopalians. Other commitments include the World Council of Churches, the Church of England, Lutheran World Federation, Union Theological Seminary, The Rockefeller Foundation, the City of San Francisco and the Norwegian Sovereign Fund. Find the list: http://gofossilfree.org/commitments/. The divestment movement has grown from $13 million in divested funds in 2013 to $50 billion in 2014 to $3.4 trillion in late 2015 to $6.09 Trillion in late 2017. That's exponential!

6. Companies like ExxonMobil, Shell, and BP have billions of dollars. 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 campaign, and a social movement. Just like in the struggle for civil rights in the U.S. or the fight to end apartheid in South Africa, the more we can make climate change a deeply moral issue, the sooner society will act. We need to make it clear that if it’s wrong to wreck creation, then it’s also wrong to profit from that wreckage. Divesting from “dirty” industries also builds momentum for moving money into clean energy and other more sustainable investments. Divestment opens up the opportunity to move our money from the problem to the solution.

7. Can we still make a reasonable return without investments in fossil fuel companies?
Yes. Studies show that over time, the performance of fossil free portfolios is as good or better than portfolios that include fossil fuel industry holdings. Financial expert Jim Cramer recently called oil stocks the next tobacco stocks, saying they are in a “death knell phase.”
See: https://www.msci.com/documents/10199/031bf397-5920-4fef-b743-0c879ae46610
http://www.impaxam.com/media-centre/white-papers/beyond-fossil-fuels-inv...
http://fossilfreeindexes.com/fossil-free-indexes-us/
The three-year divestment timeline allows ample opportunity for Presbyterian Church (U.S.A.) fund managers to develop an alternative investment strategy.

8. Shouldn’t we keep our shares invested in fossil fuel companies so that we have a voice of leverage with these companies? Isn’t shareholder activism a better way to get companies to change their practices than divestment?
If we had more time to respond to climate change, the processes of MRTI would be enough. Because we have so little time to make a prophetic and moral statement about climate change, we should follow the decades old practice of categorical divestment from the fossil fuel industry. The MRTI process is excellent at education over long periods of time, but not effective in convincing hundreds of companies to change their business models overnight. It is the wrong process for the problem of climate change.

9. 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?
The overture in and of itself will not cause folks to lose their jobs, because its purpose is to provide leverage to start a dialogue on shifting from fossil fuels to renewable energy. Over time, divestment along with other change strategies and our worsening climate will lead to changes in our energy policy. At that time, there will be economic disruptions and personal hardships and we must use our church resources to assist folks through this transition. The church must stand with those who lose their jobs, even as we pursue this change.

If humanity does not make this transition, the disruption and cost will be incalculable, as our world will cease to be hospitable to 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 (including the textile industry in the North) 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.

More jobs will be created in renewable energy than will be lost in the fossil fuel industry. $1 million dollars worth of oil and natural gas output directly creates 0.8 jobs, and $1 million of coal produces 1.9 jobs. Compare that to building retrofits for energy efficiency (7 jobs per million), mass transit services (11 jobs), building the smart grid (4.3), wind (4.6), solar (5.4), and biomass power generation (7.4).

There are plenty of reasons to be optimistic about renewable energy because with it will come higher paying jobs with more diverse opportunities and sustainable economic growth on a very large scale.

10. What is the history of the PC(USA) on divestment?
Our denomination has over 40 years of history recognizing the importance of our investments to our church’s mission. The earliest experience of the Presbyterian Church on this issue is the traditional ban on investing in tobacco, liquor and gambling stocks which probably originated in the days of the temperance and moral welfare movement. This is generally referred to as categorical divestment since it removes funding from an entire business category. This was followed by divestment from military-related production in 1980.

In 1981 the importance of divestment was brought into sharp focus by the 193rd General Assembly which directed the General Assembly Mission Council to “study the possibility of divestment of stock in corporations that do business in the Republic of South Africa…” Eventually the PC(USA) divested from 14 companies doing business in South Africa. In 1986 an office—Mission Responsibility through Investment (MRTI)—was established from both predecessor denominations’ established committees on corporate social responsibility. This office recognized the church’s unique opportunity to advance its mission faithfully and creatively through the financial resources entrusted it.

11. Do we know how much money the PC(USA) has invested in fossil fuels?
Our denomination has approximately $10 billion in investments managed by two entities, the Board of Pensions (BOP) and the Presbyterian Foundation. A relatively small percentage, a little more than 3% for the Foundation, and a little less than 2% for the BOP, is invested in fossil fuel stocks. But we are still talking about a large amount of money. As of December 31, 2014, BOP staff reported that it had investments in 37 of the companies listed in the Carbon Underground 200 list for a market value of $161 million. As of September 2015, the Presbyterian Foundation reports around $55 million in fossil fuel holdings. Of that $55 million, about $32 million is in directly held shares, which are relatively straightforward to sell; the remaining $23 million is in co-mingled investment accounts.
We have over $200 million of our money being used to produce and market greenhouse gases. We aren't talking about taking this amount of money out of these funds, but rather redirecting it into the rest of the portfolio. Thus the only change in earnings will be the difference between the return on fossil stocks and the return on the rest of the portfolio. This is likely to be negligible unless/until the "carbon bubble" pops, in which case it will be seen in retrospect as a very wise move. In fact, a fossil free ESG fund outperformed the S&P 500 from mid-2016 to mid-2017 by 13%. The “bubble” may already be popping. We also recommend actively seeking out and investing in securities of companies whose predominant focus is in renewable and/or energy efficiency.

12. Shouldn’t the PC(USA) be focusing on the demand side of this problem? People need to cut down on their use of energy if the problem is to be solved.
The answer is “both and,” not “either or.” Yes, we as individuals and churches must continue to reduce our carbon footprint, and reduce it with even more urgency as global warming accelerates. The PC(USA) addressed precisely this issue in 2006, passing a resolution at the 217th General Assembly:
“….finds that the urgency, injustice, and seriousness of this issue calls us as Christians to act NOW and to act boldly to lead the way in reducing our energy usage.”
“…..strongly urging all Presbyterians to immediately make a bold witness by aspiring to live carbon neutral lives.”
Now it is time for the PC(USA) to address the supply side of the problem, which is what the overture to divest from fossil fuels does. Until the fossil fuel companies stop extracting carbon from the ground and begin to develop alternatives, new energy sources that are clean, renewable and sustainable, we will never be able to live “carbon neutral lives.” Some changes, such as our national energy infrastructure, can only be made at a societal level.

13. Do you really think divestment will work?
It’s not at all clear whether we can do enough fast enough to save civilization and the hospitable planet to which we and all species have adapted. But this we know: we must do all we can to respond to the greatest moral crisis of our age, perhaps of all time.

We have to ask ourselves, what kind of world do we want to leave to our children. How will we respond when they ask us in 20 years, “what did you do to stop this”?
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.

Adapted from: https://www.fossilfreepcusa.org/facts-action/faq/