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 But some of the largest American Catholic organizations have
millions of dollars invested in energy companies, from hydraulic
fracturing firms to oil sands producers, according to their own
disclosures, through many portfolios intended to fund church
operations and pay clergy salaries.
This discrepancy between the church's leadership and its financial
activities in the United States has prompted at least one
significant review of investments. The Archdiocese of Chicago,
America's third largest by Catholic population, told Reuters it will
reexamine its more than $100 million worth of fossil fuel
investments.
"We are beginning to evaluate the implications of the encyclical
across multiple areas, including investments and also including
areas such as energy usage and building materials," Betsy Bohlen,
chief operating officer for the Archdiocese, said in an email.
The pope's encyclical, a letter sent to all Catholic bishops, has
sharpened a debate well underway in Catholic organizations and other
churches about divestment. But many major American dioceses have
resisted the push.
"You now have this clash between Pope Francis' vision of the world,
and the world that the bishops who run the investments live in,"
said Father Michael Crosby, a Capuchin friar in Milwaukee who
advocates socially responsible investing in the church.
"The bishops are a very conservative group, and I'm not hopeful this
will be resolved anytime soon."
Dioceses covering Boston, Rockville Centre on Long Island,
Baltimore, Toledo, and much of Minnesota have all reported millions
of dollars in holdings in oil and gas stocks in recent years,
according to documents reviewed by Reuters.
The holdings tend to make up between 5 and 10 percent of the
dioceses' overall equities investments, similar to the 7.1 percent
weighting of energy companies on the S&P 500 index, according to the
documents.
The United States Conference of Catholic Bishops' guidelines on
ethical investing warn Catholics and Catholic institutions against
investing in companies related to abortion, contraception,
pornography, tobacco, and war, but do not suggest avoiding energy
stocks.
While several organizations of progressive Catholic nuns and priests
have been actively urging energy companies to make their operations
more socially responsible, that activist approach has not taken hold
at the level of the dioceses.
A spokesman for the USCCB declined to comment when asked if the
organization was considering adjusting its investment guidelines
after the encyclical, deemed the most controversial papal
pronouncement in half a century.
"The Pope's intent was to say to people: there is an urgency on this
issue," said Frank Coleman, who manages Catholic Responsible
Investing for the Christian Brothers Investment Services, which has
resisted calls to divest the fossil fuel share of its $6 billion
under management.
"Divestment is a good way to raise the urgency. But it is not the
be-all to end-all of solutions."
POLICY AND PAPAL VISIT
When Francis makes his first visit to the United States in
September, he is expected to press lawmakers to act on climate
change in a joint session of Congress, a move almost certain to come
under attack from conservative politicians who oppose his
intervention in the debate.
Republican presidential candidate Jeb Bush, a Catholic, said right
before the encyclical's publication that he doesn't "get economic
policy from my bishops or my cardinal or my pope."
The American church remains a deeply conservative organization led
mainly by bishops appointed by Francis' predecessors. The Archbishop
of Chicago, Blase Cupich, is one of Francis' few major appointees so
far in the United States.
Regardless of where dioceses stand on the debate, their fossil fuel
holdings have likely triggered losses in recent years due to sliding
oil prices, adding to financial strain faced by the U.S. Catholic
Church from sex abuse case settlements and declining attendance that
have cost the church billions of dollars, leading to a rash of
Catholic school closures and unfunded clergy pension obligations.
The S&P 500 Energy Index fell nearly 9 percent in 2014, and U.S. oil
prices this month slumped to their lowest levels since mid-March to
around $44 a barrel. [O/R]
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The Archdiocese of Boston held roughly $4.6 million worth of energy
stocks in 2014, representing about 6 percent of its stock market
investments, according to its most recent financial report. The
archdiocese also offered employees a "Catholic Values" retirement
savings fund through Catholic mutual fund firm Ave Maria that
included shares of companies like Anadarko APC.N>, Halliburton, and
Range Resources.
A spokesman for the diocese declined comment.
The Archdiocese of Chicago had "under 8 percent" of its $1.65
billion portfolio in fossil fuels, a spokeswoman said.
The Diocese of Rockville Centre in Long Island, meanwhile, listed
$6.3 million in energy company shares among its investments in 2013,
the year covered in its most recent report, representing about 8
percent of its equities investments. An official declined comment.
Dioceses in Baltimore, Toledo and much of the state of Minnesota
reported significant holdings of oil and gas stocks mainly through
mutual fund portfolios. The Diocese of Toledo said it was
considering how to react to the encyclical, while the others did not
comment. Many other dioceses, including those of New York and Los
Angeles - America's largest - did not provide detailed information
on their holdings and also declined comment.
GEORGETOWN BENDS TO PRESSURE
The tussle over fossil fuel investments has already hit the
endowments of major Catholic universities. Last year, the Marianist
University of Dayton said it would begin divesting its holding in
fossil fuel companies. And in June, Georgetown, a Catholic
university in Washington, D.C., said it would no longer directly
invest in coal companies, handing a partial victory to a student-led
campaign for complete fossil fuel divestment.
U.S. schools that have resisted activist calls for divestment in
fossil fuels have argued that their responsibility to ensure strong
returns to fund their operations trumps any social benefits that
might be gleaned from selling off coal, oil and gas stocks.
One of the environmental advocacy groups pushing all universities to
divest, 350.org, has also specifically asked Francis to tell the
Vatican Bank to drop fossil fuel assets.
"Now that the Pope has made his views clear, it is up to the
different forces within the Vatican and within the Catholic Church –
the conservatives versus the progressives – to figure out the
change," said Yossi Cadan, a senior divestment campaigner at
350.org.
Cadan said, however, that he expected any moves by Catholic dioceses
to divest to happen overseas first, possibly in countries with large
Catholic populations that are more vulnerable to climate change like
the Philippines. "The United States will probably not be the pioneer
here," he said.
Coleman, of Christian Brothers Investment Services, believes there
are benefits to remaining invested.
"Our strategy has been active ownership, to get companies to
understand the impact of their emissions and to reduce them, to look
at their carbon footprint and to invest in other energy
technologies," he said.
But for Amy Domini, who runs Domini Social Investments, LLC, a
mutual fund firm that says it seeks to provide strong returns for
investors who "wish to create positive social and environmental
outcomes", the U.S. Catholic Church has no choice but to reconcile
its investments with the realities of climate change.
"Otherwise the bishops will be saying they follow the pope with
their spirits, but not with their money," she said.
(Additional reporting by Bruce Wallace in Washington; Editing by
Mary Milliken)
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