Environment
Tony Gentile / Reuters
When Pope Francis speaks to Congress on Thursday, environmentalists expect him to renew his call for rich countries to do more to combat climate change, and some believe that effort should begin with Catholic institutions in the U.S., which are facing a small but vocal effort to pressure them to divest from the fossil fuel industry.
“The [divestment] conversations are happening now at a level they weren’t a year ago,” said Kevin Ahern, a religious studies professor at Manhattan College. “Pope Francis is trying to ask the church institutions, ‘How do we really embody what we’re teaching?’”
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In an encyclical issued in June, the pope delivered a dramatic and unambiguous rebuke of humanity’s environmental stewardship. “We know that technology based on the use of highly polluting fossil fuels … needs to be progressively replaced without delay,” he wrote.
Though many observers believe an internal debate on divestment is underway — the Vatican invited a noted supporter of divestment, free-market critic Naomi Klein, to speak at its summit on climate change in July — the Vatican’s public stance is noncommittal. “The Vatican bank may think of initiatives which are at the core of this change,” a Vatican representative said in its only statement on the matter. “So we will see in the future. It may be considered.”
The Vatican almost certainly reaps profits from fossil fuel investments, in what is estimated to be an $8 billion portfolio at the Vatican Bank, but it’s difficult to determine exactly how much, given the bank’s long tradition of secrecy. It wasn’t until 2013 that the 125-year old institution even disclosed a financial statement. Because much of its holdings are in government bonds, Vatican spokesman Max Hohenberg told The Guardian, “there really isn’t much to divest.”
Those who study the bank say that because the church has so many layers of investments, the financial picture is murky even to those in the Vatican. “Part of Pope Francis’ financial reform has been to figure out exactly what [the bank] owns,” Ahern said.
The financial consequences of divestment may be much greater in the United States, where much of the institutional wealth of the Catholic Church resides. In 2012, The Economist estimated the annual spending of archdioceses to be roughly $170 billion. To put that figure into perspective, Apple’s total revenue last year was $183 billion.
Many of these institutions invest significant funds in the energy sector. The Archdiocese of Chicago has disclosed it has $100 million worth of fossil fuel investments. A recent examination of church records by Reuters showed that archdioceses around the country have millions of dollars invested in energy stocks. The Boston archdiocese invested $4.6 million in energy stocks last year, and the Baltimore archdiocese has 6.3 percent of its $110 million portfolio invested in commodities and natural resources. The Catholic Community Foundation of Minnesota, which provides financial management for dioceses throughout that state, reported $18.6 million in a natural resources investment fund.
While no archdiocese has yet announced plans to divest, as long as the pope continues to talk about climate change, the momentum for divestment may continue to build. “I believe Pope Francis will return to this topic frequently because his fear is that the poor are going to suffer,” said Theodore McCarrick, a retired archbishop of Washington. “Damage to the environment is most harmful to the people at the periphery of society, and he wants to be supportive of the folks who are speaking so strongly about this.”
Other Catholic institutions in the U.S. are starting to divest. In June, Georgetown University, the nation's oldest Catholic and Jesuit university, with an endowment of $1.5 billion, announced that it will no longer “make or continue any direct investments of endowment funds” in coal companies. And the University of Dayton last year became the first Catholic university to divest, selling off all coal and other fossil fuel stocks from its $670 million portfolio. “Divestment will be one powerful way that Catholic institutions can show that they understand the gravity and depth of Francis’ encyclical on climate change,” said Bill McKibben, a co-founder of 350.org, a divestment advocacy group.
Not everyone interprets Francis’ encyclical on the environment as a call for divestment. “The pope has called for us to continue to seek alternative fuel sources that are cleaner burning,” said Bruce Walker, a writer for the Acton Institute, a group advocating free-market principles for religious leaders. “But you can’t just flip a switch and all of a sudden … replace the energy from fossil fuels. We need the whole portfolio [of fossil fuels] until some type of renewable energy source is viable for everyone at a low cost.”
Others say Francis’ 38,000-word encyclical can’t be reduced to one issue. “I’m concerned about distilling [his] very complex thoughts into ‘divest or not,’” said Laura Berry, the executive director of the Interfaith Center on Corporate Responsibility, a coalition whose members have more than $100 billion in investments. “The encyclical gives a profound moral and pragmatic argument for all people of faith to think about putting their investments in places where good will happen. That could mean investing more in fossil fuel companies that make a decision to do a lot of research on remediation and development of alternative energy sources. It could mean investing in private equity that develops alternative energy sources.”
Ultimately, the decisions to divest rest with the leadership of Catholic institutions, and there is no consensus on how to proceed. “You have a real tension on these boards, [which] are asking, ‘How do we balance our need to preserve our school, hospital or charity with the call for social justice?’” said Ahern. “The folks making financial investment decisions are often drawn from Wall Street. They might not be so inclined to accept the pope’s critique of capitalism or the fossil fuel industry … especially if they themselves have made a lot of money in the carbon world.”
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