Daniel DiLeo, Ph.D.
I invite Nebraska Treasurer John Murante to examine the Catholic Church’s teaching on climate change and attend an upcoming free public event at Creighton University.
Divestment from fossil fuels is a form of “Environmental, Social and Governance” (ESG) investment. According to ESG, investors should heed moral principles and refuse to buy companies that demonstrably harm people and the planet. ESG investors are increasingly divesting from fossil fuel companies in response to the moral dimensions of climate change.
The effects of climate change – including drought, food and water stresses and rising sea levels – are already hurting and killing people, especially the poor who have contributed least to this crisis. Since at least Saint John Paul II’s message for the World Day of Peace in 1990, the Catholic Church has explicitly recognized climate change as a moral issue.
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To avoid a rapid acceleration of climate change, the Nobel Prize-winning Intergovernmental Panel on Climate Change warns that humanity must limit global warming to 1.5 degrees Celsius. To have at least a 50% chance of achieving this goal, researchers from the specialist journal Nature calculate that on a global scale, “nearly 60% of fossil oil and methane gas, and 90% of coal must remain not extracted”.
To protect their profits, fossil fuel companies have a well-documented history of ignoring this science, confusing the public, and lobbying against clean energy policies. Many people find these practices unethical. Many ESG investors are thus calling to divest from fossil fuels and invest in climate-conscious companies.
Murante says these climate-conscious ESG investors are “extremist global elites.” This implies that investors should only care about profit. The Catholic Church disagrees.
Pope Benedict XVI stresses that “every economic decision has a moral consequence” which everyone must take into account. He also observes: “It is not difficult to see that environmental degradation is often due to the absence of far-sighted official policies or the pursuit of short-sighted economic interests. Saint John Paul II calls this narrow pursuit of immediate profit “an ‘idolatry’ of the market”.
To avoid this idolatry, Pope Benedict XVI points out: “When we use natural resources, we must be concerned about their protection and consider the cost involved – environmental and social – as an essential part of the overall expenses incurred”.
The Church therefore calls for an “ecological economy” which integrates ethical concerns into the evaluations of companies to be supported. In particular, the Vatican and the United States Conference of Catholic Bishops support wise divestment from fossil fuels and encourage values-based investments in companies committed to addressing climate change. In other words, the Church calls for the kind of ethical, climate-conscious ESG investing that Murante denigrates and tries to penalize in other states.
So far, Murante has not penalized climate-conscious banks in Nebraska. It’s good for our economy. As the world follows science and moves quickly to clean energy, fossil fuel investments are increasingly risky and likely to lead to devaluation. Prohibiting divested entities from government contracts would, by default, force our state to contract with institutions invested in fossil fuels and exposed to excessive financial risk. It is not in the interest of our state.
Even if he supports penalizing those who practice ethical and climate-conscious investing, Murante’s fiduciary responsibility to Nebraska should prevent him from doing so here.
To explore these topics further, I invite the Treasurer and all readers to a free public lecture on September 20 at Creighton University (7 p.m., Harper Center Room 2046, 602 N. 20th St.). The event, “‘Idolatry’ of the Market,” features Anthony Annett, Ph.D., Economist at Fordham University, Advisor on Climate Change and Sustainable Development at the Earth Institute (Columbia University), Former Editor of speech at the International Monetary Foundation, and former informal Vatican consultant. Annett will describe how a values-based “ecological economy” that considers more than profit is essential to the morality that applies to all who inhabit our common home.
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Daniel R. DiLeo, Ph.D., is a Catholic theologian, associate professor, and director of the Justice and Peace Studies program at Creighton University.