Getting Out of Oil: Catholic universities can make a difference through divestment.
Catholic colleges and universities have a long and storied history of providing full scholarships and affordable higher education to low income, minority and immigrant students. In addition, they continue to fulfill their mission to develop the whole person (cura personalis) by linking liberal arts and professional studies to critical moral thought, promoting retreats, building faith-centered community service and justice programs and more. But today there are key issues that challenge the fidelity of Catholic colleges and universities to their core mission. John R. Wilcox, emeritus professor of religious studies at Manhattan College, has made a compelling case in these pages that there is an urgent need to address the “erosion” of the “Catholicity” of Catholic colleges and universities (Am. 9/6/13). He argues that the best way to do this is through the creation of “mission communities” on Catholic campuses. Primarily, their call would be to “play a prophetic role, at times ‘speaking truth to power’” for the purpose of “keeping Catholicity vital in all areas of [institutional] life.”
Professor Wilcox offers several examples of how Catholic mission communities might work to maintain and strengthen the Catholic character of colleges and universities. The investment and management of Catholic universities’ financial endowments is one such area in which a new “living endowment” could preserve and promote Catholic mission. In particular, he suggests that mission communities would “offer reviews of college policy and strategic planning and foster a palpable Catholic culture as shaped by the religious heritage of the founders.” While it would be interesting to examine more fully the issues, practices and value perceptions of “mission-based” investing at Catholic institutions, the singularly urgent issue of climate change—and the powerful momentum that has been growing within the fossil fuel divestment movement—deserves attention in this moment.
Considering the strength of Catholic teaching on climate change and ethical investing, the divestiture of stocks and bonds from fossil fuel corporations taking place in a growing number of secular and non-Catholic religious organizations is bringing Catholic higher education—which, with a few exceptions, has been largely absent from the national conversation—to a crossroads of mission. At this critical junction of institutional integrity, mission communities could play an important role in helping university administrators and trustees to envision a new way of being faithful to Catholic mission and to grasp the prophetic (and arguably financial) urgency of divesting from fossil fuel corporations.
The Catholic Church accepts that human actions like burning fossil fuels have a negative impact on the earth’s climate, and it understands that the effects of climate change raise crucial ethical issues as to how we tend to God’s creation. In his message for the World Day of Peace in 2010, Pope Benedict XVI highlighted the “urgent moral need for a new solidarity…in the face of signs of a growing [ecological] crisis which it would be irresponsible not to take seriously.” He called for “strengthening the linkage between combatting climate change and overcoming poverty.” At the same time, scientists warn that our planet is rapidly reaching a level of greenhouse gases in the atmosphere that will likely cause permanent, accelerating climate change. As described in numerous scientific reports from the Intergovernmental Panel on Climate Change, a vast majority of climate scientists agree that humanity can emit only 565 more gigatons of carbon dioxide by 2050 if it is to avoid a catastrophic level of climate change. Yet, the world’s largest fossil fuel corporations still plan to burn the 2,796 gigatons of carbon dioxide in their reserves, a business strategy that would result in levels of human suffering and ecological degradation unmatched in human history.
In order to address the systemic causes of climate change, an increasingly global array of religious groups, colleges and cities are moving to divest from fossil fuel corporations in order to diminish their political and economic influence. Some are also pursuing reinvestment in clean technology and energy efficiency initiatives within their own facilities and holdings. The movement has been spearheaded by the Go Fossil Free campaign, which calls on institutions to “immediately freeze any new investment in fossil fuel companies, and divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.”
While the divestment campaign’s ostensible goal is to decrease the value of fossil fuel corporations’ stocks, it carries deeper implications. The campaign’s proponents recognize that the political process has failed to produce a legislative response to the grave threat represented by climate change, largely because of the outsized influence of the fossil fuel lobby. Campaigners believe that divestment represents a way to turn public opinion against this lobby. At a time when there is no prospect for climate legislation, the fossil fuel divestment movement seeks to rekindle debate on a critical moral issue and to create an environment in which genuine solutions become possible.
In that light, this campaign resembles past divestment campaigns, like the anti-apartheid efforts of the 1980s, in which impassioned divestment debates in educational, governmental and religious institutions played a vital role in undermining the legitimacy of the apartheid regime in South Africa. Through a similar approach, the fossil fuel divestment campaign seeks to redraw society’s collective moral boundaries by asserting that institutions with a moral or educational mission should no longer profit from the fossil fuel industry. Its primary method is to force a morally challenging debate about the long-term impacts of climate change, the entrenched power of the fossil fuel industry and the incompatibility of these with a thriving future for humanity and the wider community of life.
To date, the divestment movement is supported by several faith communities, including the national United Church of Christ, the Anglican Diocese of Wellington, New Zealand, the Episcopal Dioceses of Olympia in Washington State and Massachusetts, individual Lutheran and Unitarian churches in the United States and GreenFaith, an interfaith alliance devoted to environmental stewardship, where I am a fellow. On the Catholic side, the Franciscan Action Network recently made the bold decision to join the movement and is encouraging Franciscan colleges and universities to support growing student and faculty activism for divestment, which is already occurring on several Jesuit campuses.
In its statement “Economic Justice for All” (1986), the U.S. Conference of Catholic Bishops points out that while economic markets can encourage beneficial economic development, markets alone do not “automatically produce justice” that protects the common good of all people, to which our climate is unmistakably linked, especially with respect to the poorest among us. The church therefore insists that when economic activity in free markets damages the common good, free markets must be circumscribed by “ethical norms” grounded in Catholic teaching. Thus, the U.S. bishops’ document “Socially Responsible Investment Guidelines” urges investors to draw on “the values, directions and criteria which guide its financial choices from the Gospel, universal church teaching and Conference statements.”
In “Ex Corde Ecclesiae” (1990), Pope John Paul II insisted that in order to remain faithful to the church, “Catholic ideals, attitudes and principles [must] penetrate and inform university activities” across all areas of an institution. This necessarily includes the investment and management of a Catholic university’s endowment. Given the magnitude of the climate crisis, as well as other destructive impacts of fossil fuel extraction, such as mountaintop removal and groundwater contamination, Catholic university administrations should at the very least enter into the fossil fuel debate. Some, like the College of the Holy Cross in Worcester, Mass.—my alma mater—have taken steps in this direction.
The Duties of Justice
In response to the claim that Catholic institutions should divest from fossil fuel holdings in order to uphold their Catholic mission, at least three rebuttals can be anticipated—and refuted.
First, college and university administrators and trustees might argue that the best way for Catholic institutions to address climate change is to focus on reducing their own carbon footprints. Although such direct activities to alleviate injustices are important and commendable, the U.S. bishops point out that their program The Two Feet of Love in Action calls for micro-level actions coupled with macro-level efforts (i.e., social justice) to address the systemic dynamics that cause and perpetuate what John Paul II, in “On Social Concerns” (1987), called structures of sin. Pope Pius XI cautioned in “Divini Redemptoris” (1937) that “no one [should] attempt with trifling charitable donations to exempt himself from the great duties imposed by justice.” Since fossil fuel corporations are at the heart of the systemic perpetuation of climate change, Catholic institutions should take steps to divest from fossil fuel companies even as they continue to reduce their own carbon footprints and remain faithful to their mission at large.
A second possible argument against fossil fuel divestment is that this activity may compromise institutional endeavors (like scholarships and facilities expansion) by restricting endowment growth. This is essentially an appeal to fiduciary responsibility. In response, it should first be mentioned that the highly-respected Chronicle of Higher Education reports that divesting from fossil fuel companies is unlikely to harm the endowments of colleges and universities. Many other financial studies likewise argue the fiduciary responsibility of divestment, given the looming prospects of “stranded assets” or a “carbon bubble”—meaning the future of fossil fuels is highly tenuous, at best. But even if fossil fuel divestment were to restrict endowment growth, the Catechism of the Catholic Church states that for a given action the “end does not justify the means” (No. 1753). In reference to Catholic colleges and universities, the end of institutional advancement does not justify investment in fossil fuel companies that profoundly contradict Catholic teaching. This is especially true when the quality of the future of graduating students is at stake—a big reason why more of our students are raising their voices on behalf of divestment.
A third argument is that socially responsible investment, rather than divestment, is the best way to mitigate climate change from an equity ownership perspective. Socially responsible investing, as described by Christian Brothers Investment Services Inc., a leader in Catholic S.R.I., involves shareholder advocacy and “a multi-strategy approach—stock screening, proxy voting, corporate dialogues and shareholder resolutions.”
While S.R.I. has achieved notable successes with respect to influencing corporate behavior, two points should be highlighted about S.R.I. and the fossil fuel industry. First, scientists say that fossil fuel corporations must keep 80 percent of their carbon reserves in the ground in order to keep climate change from causing runaway harm. For all intents and purposes, this means that oil companies will have to stop drilling for oil and coal companies will have to stop mining coal. These activities are the principal ways that fossil fuel companies make their profits, and shareholder advocacy is unlikely to effect changes to core corporate practices to the degree required to reverse the most unthinkable effects of climate change.
Furthermore, S.R.I. in fact recognizes a role for “screening companies from our investment portfolios,” as Christian Brothers Investment Services says. This means that even investors actively committed to corporate engagement and advocacy sometimes acknowledge that circumstances may justify or even require the refusal to invest in a company or companies in order to remain faithful to Catholic teaching. Conscious of the way fossil fuel corporations manifestly undermine Catholic teaching by fostering climate change for profit, fossil fuel corporations are a prime example of companies (not unlike manufacturers of weapons of mass destruction) in which Catholic mission requires the use of such “avoidance screens.”
Although fossil fuel divestment is a crucial tool to address climate change, this strategy alone is an insufficient response to climate change for the Christian community. Local, national and global leaders as well as the U.S. bishops have advocated that responses to climate change must provide transitional and adaptation funding. Additionally, divestment must be accompanied by the type of reinvestment in clean energy technologies advocated by GreenFaith’s campaign Divest and Reinvest Now.
While climate change and endowment investment are both complex issues demanding careful thought, Catholic mission requires that financial returns not foster or exacerbate climate change. In Matthew’s Gospel, Jesus tells his followers: “No one can serve two masters. He will either hate one and love the other, or be devoted to one and despise the other. You cannot serve God and mammon” (6:24).
Climate change has brought Catholic colleges and universities that invest in fossil fuel corporations to a moral crossroads. These institutions must now decide whether they will prioritize the integrity of their mission or the status quo of their investments in fossil fuels. Climate change shows the two to be mutually exclusive.
One of the most important ways that mission communities can preserve and promote Catholic fidelity at colleges and universities is to advocate that administrators and trustees divest their endowments from an industry whose essential practices blatantly contradict and undermine the teachings and mission of the Catholic Church.