Acton Institute Powerblog

Does ‘Laudato Si’ Lead Inevitably to Fossil Fuel Divestment?

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The unfortunate fallout of Pope Francis’ encyclical Laudato Si continues apace. One wishes the pontiff would’ve released it in four separate installments to avoid misinterpretation and seeming – to this reader, at least – contradictions throughout a somewhat unwieldy 180-some pages in which he alternately praises and disparages human technological improvements over the past two centuries. On one hand, he admires mankind’s ingenuity as an example of God’s blessing, but, on the other hand, he doth protest too much methinks those technological advancements and the markets that served as their midwife as somehow hurting rather than benefiting the poor (not to mention most of humanity).

To read Laudato Si as Pope Francis tells it, humanity is rushing like lemmings over a cliff constructed from air conditioners to intentionally despoil the earth for the poorest and, as a matter of fact, everyone else in the future. Except, of course, when it’s empirically untrue.

As anticipated, liberal media have seized upon the elements of Laudato Si embracing as settled science theories of human-caused climate change. At the same time, they ignore the inconvenient Catholic Truths of the text regarding the value of human life.

Forgive me for pointing this out, but it’s as if the cool kids at Green Earth High School are being nice to the friendly geek for his theology notes before the midterm exam. After the exam, the cool kids – the Naomi Kleins and Bill McKibbens who cheerlead and quarterback the climate-change agenda – won’t even invite poor Jorge to their after-party. Because, you know, religion outside global warming and redistribution of wealth is just so, like, you know, awkward. If this were a 1980s teen flick, many of us would be screaming at the screen: “Don’t do it, Jorge! They’re only using you!” But we’d watch anyway as Jorge allowed himself to be duped by the popular kids.

Other religious groups seeking Bill and Naomi’s favor are the investors of the Interfaith Center on Corporate Responsibility. This week, ICCR posted a link to an article from the “flagship of the left” magazine The Nation titled “Did the Catholic Church Endorse Fossil-Fuel Divestment?” Written by Bob Massie, the article’s subhead reads: “The pope’s powerful encyclical on poverty and climate change is likely to transform the investment policies of religious institutions across America.”

Pardon me, but did Massie or his editor write “transform”? How could a reputable writer for a progressive weekly mistake the leftist investment agenda of ICCR after all these years? For now, we’ll play along regardless the disingenuousness of the setup. Here’s Massey, introducing ICCR and other religious shareholder activists as if for the first time to readers of The Nation:

“I expect that every Catholic institution in the country will step back and review all their practices—their teaching and preaching, their operations and investments—to determine whether they are in line with Pope Francis’ powerful call to action,” says Father Michael Crosby, a leading climate activist and Capuchin Franciscan priest from Milwaukee. “The pope’s encyclical has now elevated the concern for climate justice to a central place in the life of the church.”

Allied with visionary leaders like Sister Pat Daly, who runs the Tri-State Coalition for Responsible Investment, and Sister Barbara Aires of the Sisters of Charity of Saint Elizabeth, Crosby has been promoting socially responsible investment for more than four decades. Today he works closely with hundreds of religious investors through the Interfaith Center on Corporate Responsibility (ICCR), a coalition with combined assets totaling more than $100 billion. For more than 40 years, ICCR members have been diligently filing shareholder resolutions, speaking out at corporate annual meetings, negotiating with executives, and issuing reports. The goal of this persistent engagement has been to improve corporate policies on hundreds of social and environmental issues.

Massey continues, overstating the success of ICCR, Tri-State and other groups’ efforts to bring energy companies to heel:

Over the last 20 years, they have focused more intensely on climate change, and their efforts have met with incremental success. They have persuaded companies to reveal their financial exposure to climate risk, set greenhouse gas reduction goals, reduce methane leakage from gas drilling, and halt the exploitation of dangerous tar sands.

For most of the negotiations, the activists and pension-fund leaders have zeroed in on the financial folly of drilling for more carbon at a time when companies already have five times more in their reserves than the world can afford to burn. If those reserves cannot be used, they will become “stranded assets,” prompting the value of fossil-fuel stocks to collapse and taking the savings of tens of millions of individual investors with them. The pope’s encyclical adds a powerful moral argument to the mix: Business models that permit the destruction of the planet must be changed or phased out. “The pope’s powerful statement will certainly become an anchor to our climate engagement with companies to emphasize the moral imperative to action,” says Tim Brennan, treasurer and chief financial officer of the 158,000-member Unitarian Universalist Association, an ICCR member organization.

One need only read “[b]usiness models that permit the destruction of the planet” to recognize a villain equal to Superman foil Lex Luther who must’ve taken over leadership of Green Earth High’s prom committee. Yup, nothing will sate Corporate America’s demand for energy short of total destruction of the planet. The only thing able to save Earth from imminent doom is the cadre of McKibben, Klein, ICCR and the rest clamoring for fossil fuel divestment.

However, our intrepid heroes in their own minds fail to realize the necessity of cheap energy for those rising – and remaining free from – poverty. “The shares of cigarette-makers have performed brilliantly in recent years, despite a big divestment drive,” notes a recent article on fossil-fuel divestment in The Economist. The article continues:

But advocates of divestment do not really expect to raise their targets’ cost of capital. Rather, they want to create the sense that a business or a country is a pariah. If you believe that global warming is a mortal threat to all humanity, and that the world’s attempts to ward it off are inadequate, then it makes sense to do more or less everything you can to bring about change. Campaigners use divestment not as a tool of corporate finance, but as a facet of free speech—part of a broader push, involving boycotts, protests, lobbying and public advocacy, to sway opinion and influence regulation. Good luck to them: they have every right to make their case.

Yes, they have a right to make such a case, but should they when it wastes valuable time, money and effort on the part of the companies who are targeted? The Economist continues:

Whether campaigners should prevail is less clear. Individual investors can settle the matter on their own. The complication with divestment campaigns is that investment committees are looking after the money of other people. Discerning their preferences is often hard and sometimes impossible. End-investors frequently want to have things both ways, demanding that funds are both green to a fault and deeply in the black. University-endowment funds can heed the views of today’s students, but not those of future generations.

Occasionally, as with smoking, the moral issues are sufficiently clear-cut for managers to act on unambiguous instructions from their investors. But many issues are more complex and, even in the days of instant cost-free communication, money managers cannot spend their time polling investors and expect to get a useful response. More often, therefore, they should be conservative and set themselves clear aims. That means maximising returns.

Just so. It’s unlikely ICCR and its Green Earth High School posse will let up anytime soon in their divestment effort to the financial peril of their fellow investors. But rest assured they’ll be trumpeting their myopic reading of Laudato Si well into the future. Rest assured, however, such agitators as McKibbn and Klein will kick Pope Francis off of the prom committee the moment his proclamations are perceived as no longer expedient to their efforts.




Bruce Edward Walker has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. Most recently, he was managing editor of The Heartland Institute's InfoTech & Telecom News. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2007 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past three years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Midland, Mich., with his wife Katherine.