Divesting from Fossil Fuel Companies and Shareholder Activism

Divesting from Fossil Fuel Companies and Shareholder Activism

Divestment and Shareholder Activism

At General Synod 29 in 2013, the United Church of Christ became the first denomination to pass a resolution endorsing both divestment from fossil fuel companies and other strategies such as shareholder activism. These strategies may seem incompatible: get rid of shares, or participate in shareholder actions. In fact, the point of both actions is to send a clear message to fossil fuel companies: we are doing our part to decrease our carbon footprints, and we need them to shift with all due haste away from their “business as usual” practices, which are destroying our planet.

Scientists are clear that our planet is changing because of the amount of fossil fuels we have emitted over the past 200 years. The global temperature has already risen nearly 1˚ Celsius. As a result, extreme weather events are becoming more frequent and more intense, species are going extinct at alarming rates, the ocean has become 30% more acidic, wildfires and droughts are covering vast territories, and more.

As people of faith, we are called to be good stewards of creation, to care for it and heal it, and to live in harmony with it. While we can admit our role in using fossil fuels and work to reduce our carbon footprints as individuals, we must also work collectively to change the system. Scientists and many world leaders have agreed that a rise in global temperature of 2˚C is the maximum that the planet can take and still host life more or less as we know it; some scientists say 2˚C is already too much warming. We are already well on our way to that 2˚ limit. In 2012, scientists estimated that we could emit another 565 gigatons of carbon dioxide by midcentury before we reached that level of temperature rise. However, fossil fuel companies have an estimated 2,795 gigatons of carbon in oil, gas, and coal reserves still in the ground, and the companies indicate that they intend to continue with “business as usual” until all of it is gone. In order to keep making money, they are willing to emit five times more gigatons of carbon emissions than the amount that takes us past the point of no return with our climate.*

Our goal, therefore, is to do nothing less than revoke the social license of fossil fuel companies to continue with “business as usual.”

The UCC has two investment organizations: The United Church Funds, which handles church investments such as endowments; and the UCC Pension Boards, which handles pension plans for clergy and some church staff. In July 2014, the United Church Funds announced the creation of such a fossil-fuel-free investment option, giving all who wish to divest their church endowment funds an easy means to do so. Both the United Church Funds and the UCC Pension Boards are also already involved in shareholder activism with the top fossil fuel companies.

Many congregations manage their own funds, and we as individuals have our own investments and retirement funds as well. We have options. Read on!

Why divest?

Here are four reasons to divest:

  1. Climate change is real and urgent: it could end life as we know it. A draft UN report warns that another 15 years of delay on significant action would exacerbate the problem beyond our current technological abilities to solve it. Which means we still have time to address it if we act now. Divestment is one way to send a clear message to fossil fuel companies that we are serious about changing our carbon footprints and they need to be as well.
  2. Many political leaders in the U.S. and worldwide seem incapable of taking meaningful action on climate change. The fossil fuel companies strongly lobby politicians to maintain the status quo. Divestment sends a clear message to both the fossil fuel companies and our political leaders.
  3. As people of faith, we know that Jesus taught and modeled nonviolent strategies for social change. Divestment is a nonviolent strategy.
  4. Divestment aligns our investments with our values.

People of faith must act to mitigate climate change. The earth is God’s, and we are called to be good stewards of God’s creation, including every living creature. When we are called to love our neighbor, we must recognize that “neighbor” includes future generations. It is a sin to destroy the planet and then to profit from its destruction.

How do we divest?

There are three basic steps to divesting:

  1. Learn what you own.
  2. Decide what you want to exclude, and sell your fossil-fuel assets.
  3. Identify and invest in fossil-fuel-free investments. Report your divestment here and here.

Churches exploring divestment should learn about United Church Funds’ Beyond Fossil Fuels funds. These funds are invested in a way that is consistent with the teachings of the United Church of Christ, and they are also free of the largest domestic oil, gas, and coal companies. Visit United Church Funds for details on how to update your congregation’s portfolio.

In addition to the Beyond Fossil Fuels funds, all United Church Funds clients – in all possible funds – will no longer be invested in coal companies and companies that extract a significant amount of tar sands, one of the most environmentally degrading processes for extracting fossil fuels.

For details on divestment for your personal portfolio, download the pdf documents “Extracting Fossil Fuels from Your Portfolio: A Guide to Personal Divestment and Reinvestment” and/or “Investing to Curb Climate Change.”

Another helpful link: Clean Energy Victory Bonds

What good will divestment do?

We do not expect to affect the bottom line of the fossil fuel industry by moving our funds elsewhere. Someone else will just buy the funds that we sell. The point of divestment is to send a strong message that it is time to leave fossil fuels in the ground and explore cleaner alternatives instead. We must revoke the social license of the fossil fuel companies to continue with “business as usual” when that means complete destruction of life as we know it.

What good will shareholder activism do?

Shareholder activism puts pressure on fossil fuel companies to do the right thing. If you hold shares in a fossil fuel company, ask for a meeting. Ask fossil fuel companies to provide information about what will happen to their assets still in the ground if/when they are not allowed to extract them. What is their plan to diversify from fossil fuel energy? How transparent are they about where their lobbying money goes (e.g., does it go to promote the fossil fuel industry?)? If they do not provide satisfactory answers, shareholders can bring up these topics at shareholder meetings.

We can do better. There is no time to lose!

Updates

Here are congregations that have divested:

  • Community UCC, Boulder, Colorado
  • Church of the Covenant, Boston, MA
  • Eliot United Church of Christ, Newton, MA
  • First Congregational Church, Amherst, Massachusetts
  • First Congregational Church, Natick, MA
  • First Congregational Church, Shrewsbury, MA
  • First Congregational Church, Westborough, MA
  • First Congregational Church, Williamstown, MA
  • First Church, Cambridge, MA
  • First UCC, Northfield, Minnesota
  • Hadwen Park Congregational UCC, Worcester, MA
  • Hancock United Church of Christ, Lexington, Massachusetts
  • Leaders in Koinonia (LINK), Ohio
  • Lyndale Congregational UCC, Minneapolis, Minnesota
  • Mayflower UCC, Minneapolis, Minnesota
  • Prospect United Church of Christ, Seattle, WA
  • Riverside Community Church, Hood River, OR
  • South Church in Andover, MA
  • The Second Church in Newton, UCC
  • Trinitarian Congregational UCC, Warwick, Massachusetts
  • Trinity Congregational Church in Gloucester, MA

Contact Info

Brooks Berndt
Minister for Environmental Justice
700 Prospect Ave
Cleveland, OH 44135
216-736-3722
berndtb@ucc.org