Catholic church starts small but is clearly thinking big on fossil fuel divestment

This week’s decision by four Australian Catholic orders to divest fully from fossil fuels can be interpreted as a direct response to the encyclical on the environment, issued by Pope Francis almost exactly a year ago.

The amounts of money managed by these Australian groups may be modest, but the announcement is part of the launch of a much wider initiative by the Global Catholic Climate Movement, which aims to encourage Catholics to reconsider their investment options, on both an individual and organisational level.

The movement will be holding seminars and provides an online divestment hub to encourage Catholics to take their money out of fossil fuels and promote reinvestment in low-carbon technologies.

The papal view

A year ago, Pope Francis was very clear in his assessment of the fossil fuel industry. His encyclical warned of the dangers of climate change, arguing that:

…technology based on the use of highly polluting fossil fuels – especially coal, but also oil and, to a lesser degree, gas – needs to be progressively replaced without delay.

He also noted that “politics and business have been slow to react in a way commensurate with the urgency of the challenges facing our world”, and stressed:

Doomsday predictions can no longer be met with irony or disdain. We may well be leaving to coming generations debris, desolation and filth.

It is only a small step from this position to argue that continued investment in fossil fuels, which profit from activities that damage the natural environment, cannot be morally justified. As Bill McKibben, founder of the campaign group 350.org which strongly advocates divestment, puts it:

If it’s wrong to wreck the climate, then it’s wrong to profit from that wreckage.

The same sentiment was echoed in a 2015 statement by Catholic bishops from all continents in response to the encyclical. The bishops called on the world to:

…put an end to the fossil fuel era … and provide affordable, reliable and safe renewable energy access for all.

Practical steps

What does this Catholic divestment drive mean in practice? Contrary to popular imagination, the Catholic Church is not a monolithic command structure controlled by the Pope. It consists of hundreds of thousands of organisations, all relatively autonomous: dioceses, religious orders, lay organisations (such as the St Vincent de Paul Society), charitable and social welfare bodies, educational bodies, superannuation institutions, insurance groups and so on.

All have bank accounts and many have investment portfolios of one type of another. While their funds might vary from thousands to many millions of dollars, the total amount of money within the church as a whole is very substantial.

In my experience, Catholic bodies are also quite tribal. For example, while many other religious bodies in Australia and internationally – including Anglican, Uniting Church, Presbyterian, Quaker and Jewish groups – have divested, Catholic bodies have been slow to take the first step within their own denomination. Each has been waiting for some other Catholic organisation to take the lead.

That is why the recent announcement by four religious orders in Australia is so important, in symbolic terms if nothing else. They have taken the lead where others have been hesitant.

The focus in Australia will now shift to bodies such as Catholic dioceses, Catholic Church Insurance and Catholic Super. All of them operate under investment guidelines that are consistent with the church’s teaching on various matters. So, for example, they would not invest in firms that produce contraceptives.

Given the Pope’s strong position on climate change, the onus is firmly on these organisations to show how they are responding constructively to his teaching. Saying it is “too hard” is not a responsible option.

Any institution as long-lived and as large as the Catholic Church will have accumulated significant assets over the 2,000 years of its existence. This wealth is used to fund activities in welfare, international aid, health care, education and pastoral support around the world. In more recent times it has been used to fund the church’s liabilities in relation to the sexual abuse scandals that have engulfed it.

It is naïve and simplistic to argue that the church should not be wealthy. What is at issue here is where this wealth is invested. While Pope Francis has made no explicit statement on divestment, many in his church are now poised to respond to his environmental message by reassessing their investments in fossil fuels.