HANDOUT 3 Fossil Fuel Divestment Debate
The UUA's Chief Financial Officer and Treasurer, Tim Brennan, and Rev. Fred Small of First Parish, Cambridge, MA, debated fossil fuel divestment in companion essays published in the UU World. Here are excerpts:
The world is hurtling toward climate change disaster, and we must act. The Unitarian Universalist Association's 2006 Statement of Conscience, "Threat of Global Warming/Climate Change," calls us to use "the ownership rights of the denomination's financial resources to positively ad?dress the global warming/climate change crisis."
There is a vigorous debate under way about exactly which tactics investors concerned about climate change should be employing. Author and activist Bill McKibben has called on investors to divest their portfolios of securities in the two hundred publicly traded companies with the largest proven coal, oil, and gas reserves. Other investors, including the UUA and most socially responsible investment (SRI) firms, have taken a different approach—using their leverage as shareowners to pressure the companies to address the crisis.
In advocating for divestment McKibben presents a stark, either/or choice: divest, or side with those who turn their backs. This is both simplistic and unfair to those who have dedicated years of their lives to seeking justice through shareholder advocacy...
The UUA's Committee on Socially Responsible Investing and Investment Committee have been studying the issue and consulting with leaders in the SRI field. They all agree that more needs to be done. Here are some of the steps they are taking:
- Tightening stock selection screens on carbon-intensive industries;
- Researching funds that invest capital in companies providing climate solutions;
- Pressuring companies to disclose lobbying expenditures and to cease supporting organizations such as the climate-science-denying Heartland Institute;
- Making the investor case to policy makers that placing a cost on carbon is pro-business, pro-jobs, and pro-investment; and
- Creating opportunities at General Assembly for learning and discussion.
In the anti-apartheid movement, it was the multiplicity of actions by investors that contributed to a just outcome. And that is what we need now—a rising tide of pressure from many sources pushing government and companies to take the necessary steps towards a sustainable, low-carbon global energy future.
Rev. Fred Small
In the moral struggle against global warming, divestment isn't the only tactic. It may not be the best tactic. But it's a crucial tactic, because right now nothing is working...
The smart money is on the status quo. It always is. But the fossil fuel divestment campaign is telling the smart money to get smarter. It's reminding treasurers and trustees that fiduciary responsibility means attending not just to short-term security, but also to long-term sustainability. It's pointing out that there can be no economy without a livable planet. It's calling upon investors to transition to a fossil-free portfolio within five years.
The campaign is asking the fossil fuel industry to stop exploring for new hydrocarbons, to stop lobbying to preserve their special breaks, and to leave 80 percent of their current reserves in the ground. Given the norms of corporate capitalism, these are audacious, even preposterous demands. Given the climate crisis, they are modest, reasonable, and necessary.
Divestment activists aren't trying to bankrupt Big Oil and Big Coal financially. They're trying to bankrupt them morally—to isolate them as outlaws, just as anti-smoking activists stigmatized Big Tobacco. As 350.org's Jay Carmona explains, "Divestment is targeting the one thing that those companies can't buy, which is their reputation." The idea is to weaken the industry politically to the point where increasing the price of carbon becomes politically feasible...
Some will in good faith and conscience fight global warming through shareholder activism. I wish them every success...
Money is always an instrument of moral choice. We must each choose as wisely as we can. I choose divestment.
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