A stable pension and a stable climate go hand in hand. Most people agree that in the face of the harms of climate change, some form of engagement is necessary to deal with the compounding environmental and climate pollution impacts of oil and gas companies. The question is, what type of engagement is measurably working to improve outcomes?
- Engagement as stockholders isn’t getting results. As a faith institution, we cannot continue to reap profits (or risk losses) from the oil and gas sector from which vast harm to people and communities, as well as living things and God’s creation is so evident.
- Engagement ideals don’t justify harm-derived profit. Regardless of engagement ideals, as investors we are profiting from a product that is causing widespread misery and destruction. Even if we were to ‘offset’ the moral harm by donating every dollar of shareholder gain to the millions displaced every year from climate disasters, even so our investment dollars would still be propping up the companies and dirty industries causing the damage. There is no ‘offset’ for climate misery.
- We can’t solve climate change by propping up oil and gas companies. Our place at their table implies moral consent, and means that fewer dollars are available to invest in clean energy, restoration, and healthier communities. Investments in clean energy are 100% essential to achieve a rapid transition away from fossil fuels. Without re-investment, the transition will fail.
- True engagement is divestment, public policy, and moral action. While corporate shareholder engagement has been shown not to bring necessary results or meet stated targets, what has been more effective is the demand for policy, regulation and enforcement. True engagement, then, is not in the boardroom but is instead rising from the moral voices demanding policies for a new era of clean energy.
This last point is fully consistent also with United Methodist values, as stated in the Book of Resolutions:
The attempt to influence the information and execution of public policy
at all levels of government is often the most effective means available to churches to keep before humanity the ideal of a society in which power and order are made to serve the ends of justice and freedom for all people.
United Methodist Book of Resolutions #5012
And, in addition to all of that, fossil fuels are quite simply an investment at risk and in decline.
Over the last decade, shedding oil, gas, and coal has proven a winning financial strategy — even taking the recent energy crisis into account. As the sector’s historic value thesis erodes, a few high-profit quarters have been unable to reverse a decade of underperformance.
Institute for Energy Economics on Equity Portfolios. February 2024 Report.
This report finds that recent disruptions to energy markets have failed to overcome the longer-term market decline of fossil fuels.
A healthy retirement and a healthful planet go hand in hand. A healthy life needs a healthy planet. Fossil fuel products are a direct contributor to child loss, polluted pregnancies, and premature death. The damage to nature, health, and communities caused by the oil and gas industry are costing billions of dollars and millions of lives every year. These impacts and costs are much worse for low income communities and communities of color.
The shareholder engagement ideal was a hopeful one that probably found its zenith in 2009, but despite those ideals, oil companies themselves are entities designed to produce fossil fuels and prioritize profit. They may get our hopes up sometimes with promises to do better, shift to renewables, invest in carbon reduction and the rest. But promises like those have proved perhaps opportunist but definitely short lived.
The mean net present value of the costs of damages from warming in 2100 for 1.5°C and. 2°C (including costs associated with climate change-induced market and non-market impacts, impacts due to sea level rise, and impacts associated with large-scale discontinuities) are $54 and $69 trillion, respectively, relative to 1961–1990
IPCC Report, 2019
Impacts of 1.5°C of Global Warming on Natural and Human Systems
While the impact of shareholders may improve with new strategies, oil companies have proved persistent in pushing back including in lawsuits. There are many, many people, however, outside the boardroom who want change, a wide majority. These are the voices driving the policy and regulation that are making a difference. This is the engagement we needed.
Right now is the opportunity to divest and re-invest in clean, sustainable and future-focused investments. Not only does this mean investing in the world we want, but it disentangles investments from the growing policy-led regulations that will increase accountability burdens for polluters.
Indeed, the World Economic Forum estimates that investments with nature-positive outcomes could attract $10 trillion of funds annually, generating 395m jobs by 2030.
Mercer, How wealth managers can invest for a nature-positive future.
We urge the United Methodist Church to divest from fossil fuels and reinvest in clean energy and a nature-positive, faith-positive, people-positive portfolio.
Rev. Richenda Fairhurst is an elder in the Greater Northwest Area of the UMC, living in Southern Oregon. She volunteers with the United Methodist Creation Justice Movement and a number of other organizations at the intersection of faith and climate change. Find her at justcreation.org
Citation: IPCC Report Chapter 3, Impacts of 1.5°C of Global Warming on Natural and Human Systems, page 264, 2019. Hoegh-Guldberg, O., D. Jacob, M. Taylor, M. Bindi, S. Brown, I. Camilloni, A. Diedhiou, R. Djalante, K.L. Ebi, F. Engelbrecht, J. Guiot, Y. Hijioka, S. Mehrotra, A. Payne, S.I. Seneviratne, A. Thomas, R. Warren, and G. Zhou, 2018: Impacts of 1.5ºC Global Warming on Natural and Human Systems. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-Delmotte, V., P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Péan, R. Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T. Waterfield (eds.)]. In Press.
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