Defying Pope's calls for climate action, US Catholic bishops cling to
fossil fuels
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[November 29, 2023]
By Richard Valdmanis
(Reuters) - Hundreds of Catholic institutions around the globe have
announced plans to divest their finances of oil, gas and coal to help
fight climate change since Pope Francis published his landmark
encyclical on environmental stewardship in 2015 urging a break with
fossil fuels.
But in the United States, the world's top oil and gas producer and where
about a quarter of the population is Catholic, not a single diocese has
announced it has let go of its fossil fuel assets.
U.S. dioceses hold millions of dollars of stock in fossil fuel companies
through portfolios intended to fund church operations and pay clergy
salaries, according to a Reuters review of financial statements. And at
least a dozen are also leasing land to drillers, according to land
records.
The U.S. Conference of Catholic Bishops (USCCB), an assembly of the
hierarchy of U.S. Catholic Church that sets policy guidance, told
Reuters that its guidance on socially responsible investing was updated
in 2021 to account for the pope's encyclical but confirmed that it does
not require divestment from fossil fuels.
Pope Francis had planned to attend the COP28 conference in Dubai this
week, but canceled on Tuesday due to health concerns. The Vatican said
it was weighing options to ensure a presence at the summit and Vatican
sources said most likely a senior official would read the pope's speech
for him in Dubai, or the pope would use a video link.
"He's making another appeal," said Dan DiLeo, director of the Justice
and Peace Studies Program at Creighton University in Nebraska. "This is
a call and a plea for fidelity."
The ongoing investments in the U.S. reflect a long-running rift between
U.S. Catholic bishops and the pope on how to address global warming.
The pope's Laudato Si encyclical urged immediate action against climate
change, declaring that "highly polluting fossil fuels need to be
progressively replaced without delay." Since then the Vatican has
repeatedly, and explicitly urged Catholic institutions to divest.
APSA, the department that manages the Vatican's portfolio, adheres to
the policy of not investing in fossil fuels and makes "all possible
checks" to ensure funds in which it has shares do not, according to a
senior Vatican finance official.
The Vatican bank, which is separate from APSA, also does not invest in
fossil fuels, a bank official said.
BIG OIL STOCK
Some 354 Catholic institutions across more than 50 countries have
divested of fossil fuels since the 2015 encyclical, including scores of
dioceses in the UK, Ireland and Germany, according to the Laudato Si
Movement, a Catholic environmental advocacy group tracking divestment.
Notably absent are any dioceses in the U.S.
Reuters reviewed the financial reports published by two dozen of the
nation's more than 170 Catholic dioceses, including several of its
largest, and found that few provide details on specific investments.
The Archdiocese of Boston held over $6 million in energy stock in its
Income Opportunity Fund and Collective Investment Partnership at the end
of June, according to its annual reports. None of the reports identified
the underlying companies, and a spokesman for the Archdiocese did not
answer questions about the investments.
The Boston diocese held around $2 million in gas and electric corporate
bonds in another portfolio.
The assets made up a small fraction of the archdiocese's roughly $240
million in total investments.
Dioceses in Chicago, San Francisco and Erie, Pennsylvania, also listed
energy assets, without providing details about the underlying companies.
Financial reports of eight other dioceses examined by Reuters contained
little or no information about which industries were represented in
their investments.
Reuters also examined a database of oil and gas leases in Texas and
found a dozen U.S. dioceses – seven based in Texas and five from out of
state – were involved in deals with drillers.
The Texas dioceses included San Antonio, Austin, and Fort Worth. Erie
and San Francisco dioceses also held leases.
"We engage a third party to review our compliance with the USCCB
guidelines, and these guidelines do not prohibit investments in fossil
fuels," said Peter Marlow, a spokesman for the Archdiocese of San
Francisco, in response to Reuters questions about its investments and
lease deals.
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Hundreds of Catholic institutions around the globe have announced
plans to divest their finances of oil, gas and coal to help fight
climate change since Pope Francis published his landmark encyclical
on environmental stewardship in 2015 urging a break with fossil
fuels. REUTERS/Remo Casilli/File Photo
A spokeswoman for the Diocese of Erie confirmed it had "arrangements
with two companies in Texas that provide minimal dividends, in the
range of $15/year," and was seeking to have them terminated.
"This effort will continue until we are successful," spokeswoman
Anne-Marie Welsh said.
The Archdiocese of Baltimore declined to comment on its investments
but pointed to an open letter from Archbishop William Lori in
October supporting the pope's message of environmentalism and
listing initiatives including the archidiocese's use of solar and a
program to plant 1,000 trees.
Officials at other dioceses did not comment.
"As a Church we need to walk the talk of Laudato Si," said Father
Joshtrom Kureethadam, an official in the Vatican's Integral Human
Development department, which formulates environmental policy. He
called the enormous financial gains by oil companies "immoral
profits."
The American Petroleum Institute, which represents U.S. oil
companies, said the industry was "committed to driving further
innovation to accelerate global climate goals while providing the
energy consumers around the world need."
PRACTICAL GUIDANCE
The USCCB investment guidance calls on dioceses to "consider
divestment from those companies that consistently fail to initiate
policies intended to achieve the Paris Agreement goals."
The Paris Agreement is an international deal struck in 2015 to limit
global warming to 1.5 degrees C above pre-industrial times to avert
the worst consequences of climate change.
"The 2021 update endeavored to provide a practical guidance for
investments based on the teaching of Pope Francis," said Chieko
Noguchi, a spokeswoman for the USCCB.
Noguchi declined to answer follow up questions, including whether
USCCB had identified any companies for divestment, or whether
engaging directly in oil and gas leasing could be reconciled with
the pope's call to shun fossil fuels.
The USCCB's 2021 recommendations were guided by the Christian
Brothers Investment Service (CBIS), a global investment manager
serving Catholic investors and institutions, according to a press
release issued at the time by the USCCB.
The CBIS, which manages nearly $10 billion, has rejected wholesale
fossil fuel divestment, arguing instead for active shareholder
engagement to improve companies from within.
The "Catholic Responsible Investment" funds that it offers to U.S.
dioceses and other clients include major oil and gas companies like
BP, Shell, Saudi Aramco, PetroChina and ONGC India, according to
LSEG data.
"CBIS is leading shareholder engagements with the largest players in
the oil and gas sector to influence the industry towards a
transformation to a low carbon future," the investment service told
Reuters. It added that it had introduced "targeted divestment from a
subset of fossil fuel producers and users" that have the highest
impact on carbon emissions, including those heavily involved in coal
and oil sands.
Sabrina Danielsen, a professor at Creighton University who has
studied the engagement of U.S. bishops on the issue of climate
change, said the U.S. Catholic hierarchy is rejecting the pope's
calls for divestment in part because of its traditionally
conservative leanings.
Fewer than 1% of the more than 12,000 columns by U.S. bishops in
official publications since 2014 mentioned climate change, Danielson
found in a 2021 study, and many of those that did downplayed the
urgency of global warming or described the topic as controversial.
"I think bishops might be very afraid of upsetting politically
conservative Catholics in their dioceses, and especially afraid of
upsetting wealthy conservative donors," she said.
The USCCB did not comment on her research.
(Reporting by Richard Valdmanis; Additional reporting by Philip
Pullella in Vatican City, Riham Alkousaa in Berlin, and John Mair in
Sydney; Editing by Suzanne Goldenberg)
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